Let’s face it…. Insurance can be complicated! If you’re like most individuals who get lost or fall asleep with the mere thought of Insurance, just know you’re not alone. With insurance there is a lot to unpack and digest. This article is in place to not only answer a question or two. But, to also provide you with a few questions to ask when dealing with an Insurance Consultant, Insurance Agent, Insurance Agency, or Insurance Carrier. Let’s dive in!

What is an Insurance Consultant?

Insurance Consultants also known as risk advisors, risk consultants, or insurance advisors are professionals who are licensed within a state to conduct insurance related business duties & services. These licensed professionals can assist individuals, families & businesses identify the types of risks they may be exposed to and help choose appropriate insurance policies to help mitigate those risks & eliminate potential liabilities. At the end of the day, an insurance consultant is a Licensed Insurance Agent.

What does an Insurance Consultant do?

Insurance Consultants specific job duties & services vary by the Company or Companies they represent & what insurance products they offer (industry specifics later in article). A good Insurance Consultant will start off with a risk assessment. This is a deep dive into your lifestyle, assets, debts, & potential liabilities. Once they have a good understanding of your needs, they will then conduct a review of your existing insurance products (if any). What they are trying to accomplish is the gage your financial risk exposure in the event of a loss. Based on this risk exposure Insurance Consultants can tailor custom insurance products to fill the gaps in coverage & strategically decrease or eliminate financial losses due to unforeseen events & perils.

Different Types of Insurance

There are a lot of insurance products & even more insurance carriers. Below is a high-level overview of 5 main types of insurance coverages and how they provide protection from financial losses.  

Auto Insurance

If you own a vehicle or drive not only is it crucial to carry auto insurance but, in most states, it is required to do so! According to data from 2021, a car accident could cost you more than $15,000, even without injuries; it could cost over $2.5 million if a crash is fatal. These costs are not only limited to damage to a vehicle or property. These costs are also associated with medical expenses, loss of wages & productivity, and much more!

Now, to help mitigate these losses and liabilities. Most states require basic Auto Insurance Liability coverage to assist with legal fees, injury, or death & property damage to others when you are legally liable. Some states require that your Auto Insurance includes Personal Injury Protection (PIP) and/or Uninsured Motorist Coverage. These coverages pay insurance claims for medical expenses and pain & suffering related to an incident for you and your passengers, no matter who is at fault. In addition, these specific coverages also provide coverage for hit-and-run accidents and collisions with drivers who do not have Auto Insurance.

An insurance consultant will review your specific driving habits, driving record, & assets that may be at risk in the event of a loss and provided a tailored quote custom to your needs & budget. Make sure when speaking with a consultant that they represent multiple carriers and are knowledgeable to this line of insurance. This way you can shop around and get the best coverage for the best price!

Homeowners Insurance

Purchasing a home is the biggest purchase and most pivotal part in our lives. It’s exciting! You have your castle, and you are the King or Queen. Protecting it comes 2^nd to none… Homeowners Insurance protects you by providing a financial safety net when damage or a covered loss occurs. If you have a mortgage on your home your lending institution or bank may require specific coverages to protect they’re investment as well. More than likely this coverage requirement will be Full Replacement Cost of the dwelling. Now, homeowners’ insurance doesn’t just protect your pocket from property damage. It also protects you from liabilities caused by injuries, theft, and loss of use. Most homeowners’ policies cover the dwelling, personal property, other structures & much more. Some will have deductibles or co-insurance and there are different types of homeowners insurance products offering coverage levels based on your level of risk tolerance & what is required by a lender.

If you own a home and rent it out to others’ a renter landlords’ policy is just as important. In addition, it may be a good idea to require tenets to carry a renter’s policy! The point is to create a shield of protection around your assets to strategically mitigate financial losses due to risks. When speaking with an Insurance Consultant regarding homeowners’ policies. Make sure that they understand any requirements of coverage by your lender. In addition, ask in advance if any inspections will be required by the insurance company, & ask what the financial rating is of the companies they represent.

Health Insurance

You can own all the wealth in the world, but nothing is more valuable than yourself! Health Insurance is the most important insurance product you could ever have. You can replace a car or house. You cannot replace yourself. Health Insurance provides you access to healthcare providers and facilities to better live a healthier, longer life. Like all insurance, Health Insurance is a contract between you and an insurance company (also known as an Insurance Carrier) to pay some or all medical expenses in exchange for a premium (payment). This coverage is crucial to protect you from financial losses as Healthcare, Medical & Pharmaceutical costs are expensive & one of the leading contributors to financial devastation and bankruptcy.

The financial benefit is not the only reason for having Health Insurance. Obviously, you don’t want to pay $200,000 for a 3-day retreat to the Emergency Room. The benefits and features of a health Insurance policy is the greatest benefit! Since the advent of the Affordable Care Act also known as Obamacare, individuals who could not obtain health insurance due to preexisting illnesses or financial difficulty now can. In addition, the law has safeguards that regulate Insurance Companies to better protect you from predatory behavior. Some of which are known as EHB’s (essential health benefits). These are mandated coverages ALL Health Insurance Companies must offer to be Considered a Qualified Major Medical Health Plan. There are a few crucial EHB’s.

1. FREE Preventive Services. This coverage gets everyone to they’re doctor for annual checkups. The key to beating an illness is finding it sooner!
2. No exclusions due to preexisting conditions. One of the biggest issues before the ACA was passed was the millions of Americans being excluded coverage for having an illness. This only made things worse as people were unable to get the care they needed when they needed it!
3. Maximum out of pocket expenses. What this coverage item does is it dictates how much an individual or family can spend in one year for medical expenses.

After the Max out of pocket is reached the insurance companies must cover all covered expenses for the remaining timeframe of the policy. There are more features and benefits including access to pharmaceuticals, set copays, networks, subsides, etc. When speaking with a Health Insurance Consultant always ask if the proposed plan is an ACA Qualified Health Plan, are there any exclusions and how many carriers/companies do you represent? This will ensure you’re getting the best product for the best price! This section is geared toward under 65 health Insurance. If you’re wanting to learn about Medicare Coverage or Medicare Supplement (also known as Medigap) please Click the Like & Follow button on our Facebook page for more info.

Ancillary Insurance

Ancillary Insurance or Supplemental Insurance policies are Dental, Accident, Cancer & Critical Illness Insurance Products. These products are in place to reduce or eliminate out of pocket expenses in conjunction with Health Insurance. As you are more than aware life does not just stop when life throws a curve ball your way. You have the Health Insurance to provide coverage, pay medical expenses and obtain access to Healthcare Providers & Facilities. But, when you’re sick or hurt and unable to work who is going to pay your bills? Family? Friends? Maybe, but that may only last for so long. An ancillary product such as an Accident, Cancer or Critical Illness Policy can. A good Insurance Consultant will package your Health Plan with one or all of the policies.

According to a 2021 Study 16 million people slip and fall each year resulting in an injury, 109 million people are diagnosed with cancer each year and God forbid the worst happens these policies have payouts upwards of $100,000 to help pay your bills while you get back on your feet! These products pay you directly… So, you can use it to pay your mortgage, car insurance, daycare, etc. According to a 2022 study 82% of Americans only have $1,000 in their savings account. At the end of the day these polices are extremely inexpensive with some only costing $9 per month! These polices will save your financial future and will not break the bank while doing so.

Now, I don’t know about you, but I like my teeth and I want to keep them where they are! If you don’t know, Dental Expenses are some of the costliest in the Insurance world. That’s not even including orthodontics or dentures! Dental Insurance is relatively inexpensive. Prices range from $10 – $100 per month. It’s surprising but according to a recent study in 2021 only 50% of the US population has dental insurance and only 28% go annually for cleanings and services! AKA there are a lot of dirty mouths out there… Some carriers have waiting periods for basic & major services and most have free preventive services right from day one. Most Dental Insurance Carriers offer dental as a packaged item when purchasing a health plan. Most have set copays for covered services and national networks. When speaking to a Health Insurance Consultant ask about the pros and cons of ancillary products and how they can benefit you!

Life Insurance

Life Insurance is a delicate subject to discuss with individuals, families, or businesses. At the end of the day, Life Insurance is proper planning and a conversation that needs to be had. The greatest fear is the fear of the unknown! As a father the question of “is my family financially secure if I die tomorrow?”, scares the hell out of me. I am sure it scares every adult with a family. Life Insurance is pivotal to any financial portfolio and complements any investments you may have. In addition, if you strategically pick & plan your life insurance policies, it can eliminate any financial burden on loved ones after your gone. Now, there are many different types of Life Insurance out there and there’s a million uses for each. I am not going to waste your time or mine going into the multiverse of Life Insurance. I am going to discuss the Big 3 Types. Term, Whole, and Universal Life.

• Term LifeInsurance is the purest type of Life Insurance on the market. Term Life Insurance is a temporary life insurance policy. When you purchase a term life policy you are paying a monthly payment for a set number of years. Typically, Term Life Insurance is offered at 10, 20, or 30 years. During those years your monthly payment stays the same. At the price when you first purchased the policy. After the years are up you can pay annually, where your price increases year over year. This is known as an ART Policy. Or you can convert to a Whole Life Policy. Term Life Insurance is the most inexpensive Life Insurance type. This type of policy is for individuals who want coverage during their working years and cannot afford a big premium.
• Whole Lifeinsurance is one of the oldest types of Life Insurance in existence. This policy will last your entire life if your premium is paid. A portion of your monthly premium builds Cash Accumulation and depending on the company you purchase your policy through they may offer dividends as well. The greatest part about Whole Life Insurance is the ability to borrow against the cash value of the policy and continue to accrue dividends and interest on the original amount. In addition, you can set your payment schedule. You can keep payments low and pay your entire life or opt into a short or single pay option to start building cash value sooner. Most Whole Life Polices will pay the death benefit and cash value amount in the event of death. So, depending on how the policy is funded and length of time the policy was in place you could gain more than with other types of Life Insurance. Being that Whole Life Insurance policies are rich with benefits and features; these are more expensive than other Life Insurance Alternatives.
• Universal Life insurance is a hybrid between Term and Whole Life. Most Universal Life Polices are set up on an Annually Renewable Term (ART) with a cash value component and most polices are extremely flexible. Meaning that with most Universal Life Polices you have the flexibility with payment amounts, borrowing, policy length, and some offer guaranteed cash out options. The problem with Universal Life Insurance is the ability to under fund your account through that flexibility. The funding of your Universal Life Policy is crucial! Being that this policy type is set up as an ART Term with a cash accumulation feature, every year your policy renews the cost of your coverage increases as you age. If you get upside down your policy could lapse and your left with nothing. Universal Life is highly advantageous to individuals who like the cash accumulation feature, flexibility in payment amounts and want an option to cash out. As well as having that lifelong coverage!

There are many uses for any of the above Life Insurance Policies. Some of which are estate planning, mortgage protection or income protection. A recent study in 2022 found that only 52% of Americans have Life Insurance in Place. With 70% stating they feel that they may not have enough. With inflation rising and unknown tax brackets in the future. It’s better to have Life Insurance and not need it, than need it and not have it! When speaking with a Life Insurance Consultant be sure to ask questions if you do not understand how, it works and get the benefit schedule to review on your own time with loved ones. Make sure to discuss what your “WHY” is and properly plan and discuss who your beneficiary will be.

Questions to ask your Insurance Consultant

Knowing what to ask is half the battle. Asking the right questions will give you a better understanding of how the product benefits you and if you’re consulting with the right professional. I’ve been in this business for years. I’ve worked and mentored under some of the Best Producers in the industry and competed with fly by night companies who only look at you like a number & who will tell you anything to get you to buy. Luckily, it’s gotten better over the years! Strict compliance and new guidelines help, but ultimately don’t rush into an insurance policy and if it sounds too good to be true it more than likely is. So how do you differentiate the good from bad and find a great Insurance Consultant? Ask questions!

• Ask for the Insurance Consultants License Number or NPN – Asking for an Agents License number or National Producer Number (NPN) will immediately tell you if they are educated, tested, and licensed to be able to help you.
• Ask if they are Captive or Independent Agent – This is not a deal breaker either way. But there are pros and cons to both. More than likely a Captive Agent works for a Carrier/Company or Call Center. They generally only offer one or two products, have plenty of systems in place and support staff to assist when out of the office or busy. Over the years I have seen more and more call center captive agents. Like every call center you never speak to the same person twice and must hit 2 5x before speaking with a person. Independent Agents & Agencies will have more freedom to represent any non-captive company across the different lines of insurance. These agents may own their own business, be individually ran or have a team under them. If they are a great independent agent, you will build a long-term relationship and count on that direct line of contact for all your insurance needs. There are cons with that though. If your agent never returns calls or goes on vacation, you may not be able to reach them. But most good agents are there night and day! At the end of the day, you want a pro! Are they a customer service representative in a call center or a seasoned agent?
• Industry Niche – I’m sure you have heard the saying “Jack of all trades, master of none”. Insurance is no different! Make sure when dealing with an Insurance Consultant that they specialize in the specific type of insurance you’re looking into.
• Who do they represent – This is an important factor when dealing with an Insurance Consultant. Make sure that they offer A-rated companies. You’ve heard the saying “what’s good in life isn’t cheap and what cheap isn’t good”! Well, trust me you do not want to pay for insurance through a company going insolvent or that has a low rating. Make sure they are companies appointed in your specific state or market! In addition, the number of carriers is important as well. When dealing with an Insurance Consultant they should be providing market insight into what is the best option for you based on your needs and budget. If they only represent one or two carriers, they are going to tell you why those companies are the best. When they have NO IDEA what a competitor may offer. Have them shop you around with more than 3 companies!
• Out of pocket expenses and exclusions – At the end of the day you need to know what is covered and what is not & how much you’re on the line for. Ask for the policy details and review before purchasing. Within the policy details there will be non-covered perils (exclusions) and a breakdown on out-of-pocket expenses. Review this with your consultant and take an educated approach in policy selection.  

Contact Landel for your Insurance Needs

An Insurance Consultant is an Insurance Agent. When speaking with an Insurance Consultant make sure they are Licensed in your specific state and represent multiple carriers in your market. Take your time and compare options before purchasing any insurance product. The most important aspect of Insurance is the ability to shift the financial loss from you to the company you’re buying the insurance product from. A great Insurance Consultant will articulate the Insurance products in a way you can understand, educate you on the features and benefits and ultimately help you see why that product makes sense or give you peace of mind knowing your risk exposure is lower than expected. At the end of the day Insurance is complicated and Insurance Consultants can simplify it!