What is an Insurance Agent?
An insurance agent is an individual who specializes in helping people find the right insurance policies for their specific needs. The agent also binds that coverage (essentially, sets up the policy) for them. When they sell a company’s insurance products, they earn a commission from that company.
There are two types of insurance agents: captive agents and independent insurance agents.
Captive insurance agents
These insurance professionals represent a specific insurance provider or carrier. A captive agent may represent Northwestern Mutual or New York Life, for example.
That agent will usually offer their clients products from within their company’s portfolio.
Independent insurance agents
Independent agents do not work for a single insurance provider. Instead, they usually have agreements in place with multiple different companies. They shop the insurance marketplace, comparing options from any providers that they represent, to find products that meet their client’s wants and needs.
An insurance broker is a professional who acts as an intermediary between customers and insurance companies, helping them find the policy that best suits their needs.
The broker’s role is to help their clients identify and put together the best insurance plan suited to their specific needs. Since they are not bound to sell policies only from a certain company, they can look around to find the best policies at the best prices according to the client’s needs.
What insurance agents can do
Both captive and independent agents can streamline the insurance process by finding and securing insurance coverage. That means they can identify policies that meet specific coverage requirements within a certain budget.
Then, once the client chooses a policy, they can bind coverage, meaning they finalize the insurance sale. By the time a consumer finishes working with an agent (assuming they find a policy they like), they should have insurance protection in place.