Lack of Securities/Investment License – A Disservice for Life Insurance Consumers

Be sure your life insurance agent, broker or advisor is being transparent about their limitations!

When it comes to financial advice, especially regarding life insurance and retirement planning, consumers deserve transparency, competence, and someone who puts their best interests first.

Unfortunately, this is often not what they get. One of the most pressing and overlooked problems in the life insurance industry today is the fact that the majority of life insurance sales professionals – including agents, brokers, and even some “financial advisors” – do not hold active securities or investment licenses, let along proven experience in the area of investment or financial planning.

This absence of credentials and professional experience has serious consequences for consumers. It limits the advisor’s knowledge, restricts the range of solutions they can provide, and leads to biased recommendations motivated by commission – not the client’s financial wellbeing. At LifeInsuranceReview.com (LIR), we hear about these situations far too often. That’s why we’ve built a service rooted in advocacy, objectivity, and expertise to help consumers uncover the truth about their life insurance and truly understand their options.

Why a Lack of Investment Licensing Hurts Consumers

1. No Legal Obligation to Act in Your Best Interest

Unlike Registered Investment Advisors (RIAs) or fiduciaries, most life insurance sales professionals operate under a suitability standard – not a fiduciary standard. This means they are only required to recommend products that are “suitable” for you, not necessarily what’s best for you. There’s no mandate to consider lower-cost alternatives, better-aligned investment options, or your long-term goals. In contrast, licensed fiduciaries must act in your best interest 100% of the time.

2. No Authority or Competency to Offer Investment Advice

Without securities licenses such as the Series 65, 66, or 7, insurance professionals cannot legally offer investment advice. This means they’re not allowed to:

• Discuss or evaluate your 401(k), IRA, or brokerage accounts

• Analyze the role of your investments in your financial plan

• Advise on the suitability of stopping or reducing contributions to investment vehicles

Yet we see time and again: life insurance agents are telling clients to stop funding their 401(k)s, Roth IRAs, or 529 college savings plans – and instead funnel more money into a cash value life insurance policy, which earns them a commission. This is not only bad advice – it's self-serving and dangerous.

3. No Access to Variable Life Insurance Products

Variable life insurance (including Variable Universal Life or VUL) represents some of the most innovative, flexible, and potentially advantageous permanent life insurance options on the market today. Over the past three years, VUL products have seen significant improvements:

• Higher death benefit guarantees

• More flexible investment choices

• Better cost structures

• Enhanced features and riders

But most life insurance sales professionals don’t even have access to these products – because selling them requires an active securities license. That means consumers are being kept in the dark about viable and sometimes better solutions for their financial situation.

The Real-World Consequences for Consumers

At LIR, we routinely work with clients who share deeply concerning stories about how they were sold a cash value policy:

“I was told to stop contributing to my IRA and lessen to the minimal amount of company matching to my 401k and instead prioritizing funding an Indexed Universal Life policy because ‘it’s tax-free growth and you don’t lose money.’”

“The agent told me I was ‘investing’ with the life insurance policy. I didn’t realize they weren’t even allowed to talk about investments.”

“I didn’t know other types of policies even existed – no one told me about VUL or IUL alternatives.”

These example experiences highlight a growing consumer protection issue: commission-based sales are being disguised as financial advice.

How LIR Protects and Empowers Consumers

LIR is not here to sell you a product. We’re here to protect you from bad advice, review what you already have, and educate you on all your available options – without bias and without pressure.

Here’s what makes us different:

✅ We Are Consumer Advocates

We act solely in the interest of the consumer. Our reviews are comprehensive and grounded in financial planning expertise, not sales quotas.

✅ We Are Licensed Professionals

Our team includes licensed fiduciaries, investment advisors, and life insurance experts. We hold securities licenses and understand both the insurance and investment side of your financial life – unlike most insurance agents.

✅ We Help You Understand the Full Picture

When we review your policy, we don’t just look at the illustration. We evaluate how it fits within your retirement, tax, and estate plan. We tell you the truth – whether you were oversold, under-informed, or simply unaware of better alternatives.

✅ We Are Unbiased and Transparent

We don’t get paid to sell you a policy. If your current policy is good, we’ll tell you. If you’ve been misled, we’ll show you where and how. And if there are opportunities to improve or optimize, we explain them in plain English.

Consumers Deserve More Than Sales

The unfortunate truth is that too many life insurance salespeople are making recommendations they’re not qualified to make – and consumers are paying the price. Whether it’s pushing a cash value policy in place of a retirement plan contribution or withholding information about better products due to licensing limitations, these actions harm consumer outcomes.

You deserve more. You deserve transparency, expertise, and someone who works for you – not a commission. At LIR that’s exactly what we provide.

Frequently Asked Questions (FAQs) -Lack of Securities/Investment License - Disservice for Consumers

1. Why is it a problem if my life insurance agent doesn’t have a securities license?

If your agent doesn’t have a securities license, they’re not legally allowed to give you investment advice or help you evaluate retirement plans, brokerage accounts, or variable life insurance products. Yet many still attempt to guide consumers on these topics without proper qualifications, leading to biased or incomplete advice.

2. What are variable life insurance products, and why don’t all agents offer them?

Variable life insurance products (like VULs) offer investment flexibility and have evolved with improved benefits and guarantees in recent years that most cases are better priced than IUL and even Guaranteed Whole Life or Guaranteed UL. However, only professionals with active securities licenses can legally offer and discuss these products. If your agent is not licensed, you may never even hear about them as an option or get them illustrated as well for clear comparison.

3. How does LifeInsuranceReview.com stay unbiased?

LIR does not sell life insurance policies or earn commissions from insurance companies. Our only job is to review your existing policy, educate you on your options, and help you make fully informed decisions. We advocate for you – not for a product or provider.

4. What’s wrong with funding a cash value life insurance policy instead of my 401(k) or Roth IRA?

While cash value life insurance may offer benefits for some, it should not replace essential retirement savings plans unless there’s a very specific, strategic reason. Unfortunately, many agents push this strategy because they earn commissions on policy premiums – not because it’s in your best interest. At LIR, we help you understand the pros and cons based on your goals.

5. What can I expect from a policy review with LifeInsuranceReview.com?

You’ll receive a detailed, plain-language review of your current policy, how it’s performing, and whether there are better alternatives. We also identify risks, fees, and opportunities that may have been overlooked. Most importantly, you’ll walk away with clarity and confidence – knowing you made an informed decision based on expert, unbiased guidance.

Lack of Securities/Investment License - Disservice for Consumers