There are different types of insurance agents?
Yes! There are two main categories of insurance agents out there – captive agents and independent agent…but what the heck is the difference you may be asking!
A captive agent (also known as an exclusive agent) works solely for one insurance company and are obligated to sell their products exclusively. A captive agent may have more in-depth knowledge of products of the company they work for. However, that agent is not able to present options from other insurance companies, which may be more suitable for your needs.
Conversely, an independent agent works with multiple insurance companies that sell a multitude of products. Independent agents can show you many different quotes from multiple life insurance companies and find the product that best suits your needs and budget.
What does this mean and how does it affect your experience as a buyer?
When it comes to purchasing insurance with an independent agent, there are a lot of advantages. The companies that work with independent agents know that the agent is looking at more than one insurance company as an option for their client. Because of this, insurance companies are more competitive. Another benefit with working with an independent agent is that if you apply and receive a final offer and it does not come back as anticipated, independent agents can shop it on the back end with the other insurers and may be able to secure a better offer.
Most insurance companies ask the same questions and look for similar qualities in people they would like to insure. However, depending on their underwriting standards, one insurer may look at potential insureds very differently. With that in mind, if your first offer comes back at a higher rate than anticipated because of a particular issue (health, financial or otherwise), your independent agent may know a better insurer that works well with that particular issue, or other potential issues. Most independent agents are familiar with the insurance companies they work with and how their underwriting guidelines are utilized.