Insurance agents are not fiduciaries in most cases. They have no obligation to place your interests above their own or above those of the insurance companies they represent. The White Coat Investor describes 6 greatest sins of insurance agents trying to disguise selling as advising:
- Underselling Term Life Insurance: “I see doctors who are sold a 5 year term policy at age 30. That’s dumb. Your term ought to be long enough to get you to your likely date of financial independence.”
- Selling Whole Life Insurance: “Whole life insurance (and its cousins universal life, variable life, variable universal life, and index universal life) is one of the most oversold products in the entire financial services industry.”
- Selling Insurance On Children: “There is simply little excuse to sell someone a life insurance policy on their children.”
- Trying To Be A Financial Advisor: “In fact, in order to get sold, the WORST investments pay the HIGHEST commissions. I don’t care how good of a person you are, that’s a tough conflict of interest to fight against every day for your entire career.”
- Selling Long Term Care Insurance to the Wrong Crowd: “Everybody doesn’t need long term care insurance. Stop trying to sell it to everyone.”
- Not Being An Independent Agent: “Why would any one company be the best company for every type of insurance for every person? It doesn’t make any sense. Yet many agents are ‘captive’ and sell insurance from only one company.”