For families with significant assets & their advisors

6 Things Agents Never Tell Clients About Life Insurance

By Dave Chaney, Life Insurance Fiduciary
In the business since 1987

Know who represents you when buying life insurance. Learn how insurers are compared and what to check before you sign.

Read the six things below ↓

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01

Understand who is sitting on your side of the table.

In a traditional life insurance transaction, the agent represents the carrier. That means no one at the table represents the buyer. A buyer needs an advocate whose sole job is to represent them to the marketplace and negotiate the strongest available terms. If the decision to buy is already made, what is needed is representation instead of a sales pitch.

For advisors, this is the quiet risk hiding in most client estates. The policy gets sold, the file gets closed, and no one was negotiating for your client.

02

Review the medical records before any carrier does.

Submit an application blindly and you lose your leverage. For large cases, we conduct preliminary underwriting before anything goes to a carrier. We gather and hold the medical records ourselves. Once a carrier has seen incorrect or unfavorable records, that impression is difficult to reverse. Reviewing the file first lets us catch inaccurate physician notes and resolve issues before they cost the buyer money.

03

Shop the full market before formally applying.

Carriers assess risk differently across height, weight, cholesterol, blood pressure, and tobacco use. Some offer non-smoker rates for smokeless tobacco. Others classify any tobacco use as a smoker. We do not formally apply to a carrier unlikely to offer competitive terms. Presenting a case to multiple carriers creates competition on price. When a buyer applies directly, the carrier owns that information, and an unfavorable outcome can follow them for years.

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04

The rating label matters less than the numbers.

It is easy to get caught up in achieving a specific health tier, but a preferred classification at one carrier can outperform a preferred best at another on cash value accumulation and death benefit. The selection has to be based on actual cost and performance, and the sequence matters. Carrier first, then policy, then product.

05

Match the policy to the actual need.

Permanent coverage fits liquidity planning, estate tax liability, and estate equalization. Term fits temporary needs. Estate tax exemptions move with legislation, but the rate above the line has held at 40 percent for years. For real estate investors and entrepreneurs whose wealth is illiquid, that bill is the reason families are forced to sell assets after a death.

06

Do not assume existing policies are performing as promised.

Policies can end up requiring premiums for longer than projected, or drifting toward lapse at older ages as carriers adjust internal costs. An in-force policy review verifies the coverage is doing what it was sold to do. For advisors, an unnoticed lapse is not just the client's problem. It lands in the estate plan, and sometimes in the AUM conversation.

A note for the advisors reading this

Most of the buyers I meet after the fact had good advisors around them. What they did not have was someone whose only job was the insurance transaction itself. That is the role I play. I work alongside RIAs, CPAs, and family offices as a fiduciary back office for high-value coverage. Your client keeps their team. The team gains someone on the buyer's side of the table.

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Dave Chaney

Dave Chaney

Life Insurance Fiduciary

In the business since 1987. Represents buyers exclusively, working alongside their advisors, with access to more than 30 carriers.

Securities and Investment Advisory services offered through Hornor, Townsend & Kent, LLC (HTK). Registered Investment Advisor, Member FINRA/SIPC. 800-873-7637, www.htk.com. Fiduciary Underwriting Desk is not affiliated with Hornor, Townsend & Kent, LLC.

HTK does not provide legal and tax advice. Always consult a qualified tax advisor regarding your personal tax situation and a qualified legal professional for your personal estate planning situation. 9104853DH_SEP28 This material is provided for informational and educational purposes only and is not intended as individualized investment, insurance, tax, or legal advice. Estate planning concepts discussed are general in nature. Laws vary and are subject to change. Consult qualified tax and legal professionals. Insurance products are subject to underwriting, eligibility requirements, policy limitations, costs, and carrier approval. Guarantees are based upon the claims-paying ability of the issuing insurer. Securities and investment advisory services offered through Hornor, Townsend & Kent, LLC (HTK), Registered Investment Adviser, Member FINRA/SIPC. 800-873-7637, www.htk.com. The Fiduciary Underwriting Desk is not affiliated with HTK. HTK does not provide legal and tax advice. Always consult a qualified tax advisor regarding your personal tax situation and a qualified legal professional for your personal estate planning situation. We are insurance and securities licensed in our resident state of Oklahoma, as well as other states. Please contact us for additional listing of licensed states. This is not an offer or solicitation in any state where not properly licensed or registered.