If you have ANY health issues whatsoever and are able to get life insurance through any captive agent, you MUST shop for alternative offers, or you will overpay significantly!
A captive agent is anyone that can only offer you rates from one insurance company, like State Farm, Allstate, Northwestern Mutual, etc.
Most of these companies’ life insurance rates are not competitively priced.
One trick some captive agents use to get you to buy over-priced life insurance from them is to try to frighten you into believing that other insurance companies may go out of business due to their less than perfect financial ratings.
If this happens to you, then ask the agent to tell you the name of one life insurance company that has gone out of business over the past 50 years.
If they can tell you the name of even one life insurance company that has gone out of business, please let me know. I don’t know of any.
We have dealt with hundreds and hundreds of different insurance companies over the past 40+ years. I also regularly read all of the life insurance industry news and publications, and I’ve never even heard of any insurance company that has gone completely out of business or was unable to pay a death claim.
There are many insurance companies that have merged with others throughout the years and have changed names. There are also some companies that no longer sell new life insurance policies, but that still maintain all old policies and continue to pay all death claims.
Financial ratings of life insurance companies are important, especially if you’re going to buy any type of permanent life insurance that could have cash value or may pay dividends.
If you’re shopping for Universal Life, Indexed Universal Life, traditional Whole Life or Variable Life, pay attention to the financial ratings of the life insurance company you intend to buy from.
Even if you are interested in cash value life insurance, a good independent agent or broker that offers lots of different insurance companies will be able to get you better offers than any captive agent.
If you really like your captive agent, you believe they’re working in your best interest, and you don’t mind paying more than you have to, then by all means buy their life insurance.
However, if you want to save money, pay off your mortgage early, buy a new car, or you just hate wasting your hard earned money, find a good independent agent or broker.
There are hundreds of quality insurance companies with great financial ratings to choose from, no matter what type of life insurance coverage you want.
Don’t fall for the scam if any captive insurance agent tries to frighten you into buying from them because of their insurance company’s financial ratings or name brand.