Licenses must be current
A license to sell insurance is granted by provincial agencies, with proof of competence in the field. Failure to maintain proper life insurance licensing is a common agent-related violation cited by the insurance licensing and discipline authorities. When dealing with an insurance agent, it is essential to establish that his or her license is valid. Insurance licensing is regulated provincially, and a call to your provincial/territorial insurance office can confirm licensing status.
A license is granted when the necessary course of studies is completed, a criminal background check has been successful, and fees are paid. Continuing education is required to maintain a license, except in Nova Scotia, New Brunswick, PEI, and Newfoundland and Labrador. These provinces do not require agents to keep up or refresh their knowledge through ongoing education.
In some provinces, error and omissions (E&O) insurance is a requirement for licensing. However, this is not true across the board. Ask your prospective agent about whether he or she carries E&O, and how much.
An exception for licensing is made for those who sell insurance products through banks. Bank employees sell life insurance in the form of mortgage insurance, travel-medical insurance, disability insurance, and annuities. They offer only the bank’s products, and do not need to meet any of the insurance licensing requirements.
It is essential to compare the bank’s product with similar products sold by a licensed insurance agent before making a commitment to buy. You’ll want to check the difference in price between similar products as well as differences in the structure, features, and benefits of the products themselves.
Courtesy Fun data Canada Inc. © 2014. Susan Yates is president of the Centre for Life Insurance and Financial Education (CLIFE). This article is not intended as personalized advice.