Who should I buy life insurance from – a Chartered life underwriter (CLU), a Chartered financial consultant (ChFC), or a Certified financial planner (CFP)?

Agents holding each of these three professional designations are competent enough to sell life insurance. Therefore, in order to lower the risk of receiving bad advice, buying the wrong policy or being deceived, you should look for an agent who is either a professional Chartered life underwriter, a Chartered financial consultant or a Certified financial planner, or studying for one of these qualifications.

You will feel more secure if your agent holds a CLU, ChFC or CFP designation for two reasons:

1. Chartered life underwriters, chartered financial consultants and chartered financial planners have to abide by a Code of Ethics which postulates that agents have to act in their customer's best interest;
2. An experienced and qualified agent can advise you about the type and amount of policy that best suits your needs, choosing and naming your beneficiaries and picking a financially stable insurance company.

Types of Agents You Can Buy Life Insurance From

Career life insurance agents are often the best choice when it comes to buying life insurance as this is their specialty. They are usually qualified chartered life underwriters (CLU) and have a very high level of expertise. However, beware of agents who try to sell you a permanent life policy when you don't really have long-term need for protection! The commissions on cash-value life insurance are considerably higher than those of term life insurance, which explains why most agents are more likely to recommend the permanent policy types.

Multiple policy agents who sell other types of policies, like auto or homeowners insurance, usually have licenses to sell life insurance but are rarely specialized and experienced enough in selling it. If that is the case, you can always ask your auto and homeowners agent to refer you to a good life insurance agent.

Financial planners usually hold the qualifications of a Certified financial planner (CFP) or Chartered financial consultant (ChFP). This type of agents' expertise is giving financial advice but they can also sell life insurance. Financial planners are most likely to emphasize the investment aspect of cash-value life insurance, thus advising you to purchase permanent life insurance. However, keep in mind that permanent life insurance is not a good investment unless this is the policy type that best suits your needs.

• Whole life vs term life – what is the difference between term and whole life insurance?
• Term vs. permanent life insurance – which should I choose if I am looking for long-term life insurance?
• What are the benefits of whole life insurance?
• How are life insurance costs determined?
• When is it better to buy term life insurance?