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Should I Use A Broker, Agent, Financial Planner Or Other Professional To Help Me Buy Insurance?

Why Use An Independent Insurance Broker?

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Insurance brokers can be helpful in the process of purchasing insurance.

  • Brokers can help identify the coverages you need and in what amount.
  • Brokers are available to answer your questions as they arise.
  • Independent insurance brokers are paid a commission from the insurance company on the policies you purchase. However, brokers are legally bound to work solely in your interest, even though their compensation is from the insurance company.

Homeowners, Automobile and Other Property and Casualty Insurance:

  • A broker should know which companies in your area sell the insurance you need at the lowest sot, or with the best combination of price and service to fit your needs.
  • A broker can help determine the appropriate deductible for you.
  • A broker can give you information on the financial and claims reputation of various companies. If the information is about companies the broker doesn't represent, verify it -- particularly information about companies which sell insurance directly to the public without use of brokers.
  • If there is a property and casualty claim (for example, under your automobile or homeowners insurance policy), a broker can help in the claims process.
    • A broker can let you know when it's in your best interest not to file a claim.
    • A broker, can put the wording of the claim in the best light for insurance purposes as well as avoid saying things that could ultimately be harmful to your interests.
    • A broker can help advise you about what steps you have to take and when to maximize what you receive -- as well as what NOT to do.
    • A broker can push the insurance company to be sure you are treated fairly with reasonable compensation for your loss. Insurance brokers can also advise you when it makes sense to hire your own loss evaluator (known as an "adjustor") to maximize the amount you receive.

Life insurance:

  • A broker should know which companies in your area sell the type of life insurance that would best suit your needs and accept a health condition like yours, at the lowest cost.
  • A broker can approach a life insurance company informally, describing your health condition. He or she can obtain an informal answer whether you would be an acceptable candidate for insurance from the company, what type of policy would be issued, and the approximate premium. Since the answers are informal, you can't bank on them - but  unless there are facts not disclosed to the insurance company, the odds are the policy will be issued as stated.
  • A broker can help advise on the best method of owning the policy if your estate is subject to estate tax.
  • A broker can help make sure your beneficiary designation get the proceeds to the person or people you intend, when you intend it.

Health Insurance, Disability Income Insurance and Long Term Care Insurance:

  • A broker can also help save time by steering you to companies that are willing to work with people with your health history.
  • In the event of a dispute about a payment of a claim, a broker can help you position the facts to make it more likely that the insurance company will pay.
  • If you are interested in purchasing individual health insurance, we have a separate article about Health Insurance brokers.

On the downside, you may run into an unscrupulous broker who puts his or her own financial interest ahead of yours. It's why it's important to choose a broker wisely.

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