Have you ever thought that you have been sold insurance or even over-sold by an insurance agent? This could happen when you’re buying life, health, or property insurance. This is a common question, concern, and complaint that financial advisors hear all the time.

Buying insurance can be complicated. It forces people to make life decisions on how they want to protect their business or family. Trusting the insurance agent or financial professional to give you the right advice you need to make a final decision is critical. However, not everyone gets the correct advice.

Recently a twenty-six-year-old single female (Amy), came to Coaching Financial Concepts for guidance. She had started her own business as a consultant, had approximately $40,000 in student loans, had not maxed out her IRA contribution, and kept a small amount of money in her savings account.

Amazingly, Amy asked if the $500,000 in whole life insurance she was sold is something that was necessary at this time. She was concerned that she purchased insurance that she didn’t need. After finding out the complete details about her situation, we determined that she was, indeed, oversold insurance.

The insurance agent she originally met with sold her on the fact that this policy would provide her with retirement income. He touted the benefits of the cash value growth and the safety of this policy. The total premium was around $350 per month, and this agent sold her four policies in a short period of time. (This is never a good sign!)

Amy is not married and does not have any children. It is not important for her to leave behind a large amount of money to support a family. She is concerned about her student loans and needs extra money to help market the business.

Does Amy sound like a candidate for $500,000 of whole life insurance? The answer is NO! Unfortunately, Amy was sold life insurance coverage she didn’t need at this time in her life.

Whole life insurance is a good long-term insurance plan if you have extra funds that you won’t really miss. Whole life insurance is never the first option you should consider for retirement planning. It was unnecessary for Amy to purchase this amount of whole life insurance at this time in her life.

The insurance agent should have directed Amy to focus on paying down her student loans since the interest rate is about 8%. He also should have advised her to contribute to an IRA with any available funds. Lastly, if it was important to leave behind money for her family, Amy could have purchased a term life policy for less than $15 per month for $100,000 of coverage, which would be more than enough for her needs.  

Here are some tips to protect yourself from being sold or over-sold:

• Determine what is important to you.
• Ask yourself: “Did the agent get all of the facts and ask pertinent questions?”
• Ask the agent about other available options.
• Comparison shop: Seek out the pricing from different companies or even another agent.
• Ask why this is the recommended financial product and how did he or she determine that this was the solution.
• If the agent uses hard-selling tactics–walk away!
• If you are not comfortable or don’t understand something, don’t buy it.

What happened to Amy happens to thousands of people throughout the U.S. every day. Insurance agents don’t make any money if they don’t sell a policy–especially captive insurance agents who only represent one company.

Too many insurance agents only care about their own pocketbook instead of their clients. If you get the feeling that your insurance agent feels this way, it is perfectly fine to walk away or seek help or advice from someone else.

Finding an insurance agent or financial professional with INTEGRITY is critical. If you want to WIN the financial game, make sure you work with someone who cares more about you than whatever he or she is selling!