By Susan Yates
You’re going shopping for insurance. But whom do you buy from? The choices are bewildering for clients. There are brokers and agents and underwriters. Some are “captive” employees of a single company, others are independent (sort of). Most have an alphabet of initials and designations after their name. To help clear up some of the fog, and help you help those consumers make the right choices, I’ve prepared this consumer’s buying guide to insurance product providers and their services.
Life insurance products come in three forms: life insurance; accident and sickness insurance (A&S); and investments.
Licenses and designations
There are two types of life insurance licenses. A life insurance license enables its licensees to sell life insurance, A&S insurance, and investments in the forms of segregated funds and annuities. An agent with only an A&S license is restricted to selling only A&S products, including travel-medical and disability insurance. They cannot sell insurance investments.
In order for a life agent to sell mutual funds, he or she must acquire a mutual funds license. A life agent can also acquire a securities license to sell securities, such as stocks and bonds. However, very few do so. On the other hand, those with a securities license often become licensed insurance agents so they can sell segregated funds.
Life and A&S agents must complete the Life License Qualification Program (LLQP). However, they cannot advertise that they have taken the program by putting LLQP after their name. For this reason, many life agents proceed to obtain the Certified Financial Planner (CFP) designation.
The CFP connotes a level of education and professionalism that has been attained through a rigorous course of studies. CFPs are top-notch personal financial advisors, and many CFPs also hold a combination of insurance, mutual funds, and securities sales licenses.