There is a big difference between a captive and an independent life insurance agent. Knowing the differences between the two can save you time and money.
If you plan to buy life insurance, or if you have a friend or loved one who wants to purchase life insurance, it is important to know the differences between captive life insurance agents and independent life insurance agents.
Captive Life Insurance Agents: An Overview
A captive life insurance agent is, as the term suggests, someone who works for only one life insurance organization. That agent will exclusively market, and try to sell, life insurance policies (and other products and services) from the insurer he or she represents.
The companies with the largest number of captive insurance agents include State Farm, Allstate, Farmers Insurance Group, American Family Insurance.
Some of the bigger life only captive agents consist of Western-Southern Life, Primerica, Northwestern Mutual, New York Life, and Horace Mann Insurance.
While a captive agent may have a thorough understanding of the various life insurance policies his or her company offers, that same agent is unable to present options from other insurers. Other policies may be more comprehensive and affordable for current or prospective clients, but a captive agent cannot sell or promote this fact.
The biggest problem concerning captive life insurance agents is, again, the inherent limitations associated with selling only one company’s products and services. Despite whatever advertising or promotional campaigns, these companies may run about their respective name recognition and prestige, the facts tell a different story.
For the fact is, too many captive insurance agents try to sell policies that are too expensive, too inferior and too difficult (for prospective clients) to purchase because of very rigid underwriting guidelines. If a potential client does not know this information, or if a captive insurance agent does not volunteer this material (that he or she can only present a single company’s policies), that prospective client may not even be eligible to buy life insurance from that carrier.
Even worse, that individual may then be under the false impression that he or she cannot qualify to purchase life insurance, period. Thus, it is essential to be aware of the distinction between captive and independent life insurance agents.
Independent Life Insurance Agent Advantages: A Summary
Independent life insurance agents are responsible for more than half of all life insurance policies sold every year. An independent agent is just that: A professional who does not work for a single life insurance company. He or she sells policies from a diverse selection of life insurers and can find you the best companies to choose from.
Companies like Banner Life, MetLife, Principal, Sagicore, Pacific Life, Transamerica, Assurity, ANICO, and Prudential are (mostly) independent insurers, to cite a few notable examples.
Independent life insurance agents can guide you through the underwriting process, and show you multiple quotes from many life insurance companies. The emphasis here is on choices, plural, based on the needs of various clients.
Also, independent life insurance agent contracts are part of a broad portfolio of contracts that prospective clients can review and compare. An appointment with an independent life insurance agent is a good way to further clarify things because the advantages an independent life insurance agent offers are many, and those benefits deserve your attention and consideration.
Not all Independent Agents are Created Equal
Bear in mind, too, that not all independent life insurance agents are the same. There are degrees of independence, and the agents with the greatest freedom – the ones with access to the greatest number of high-quality insurers – are the ones a potential client should contact.
This distinction between captive life insurance agents and independent life insurance agents is an important one. Knowing this fact is essential, when deciding to purchase life insurance.
One of the greatest benefits of buying life insurance from Local Life Agents is independence. Meaning: We are not captive agents; we do not work for only one life insurance provider, forced to sell products that may not be as affordable or comprehensive as competing policies.
This advantage enables us to search among 40 life insurance carriers, thanks to our exclusive Quote Engine, to find the right policy – for the right applicant – within the right rate class. Our independence translates into your freedom, to compare, shop and save, so you get the life insurance you need for the financial safety you and your loved ones deserve.
Best of all, we are not obligated to even try to sell you anything. Our responsibility is to ensure you get the facts about life insurance, based on your specific profile, age, and medical condition, among other things.
Local Life Agents is independent, by choice, so you have the freedom of choice. Our personalized approach, tailored to your individual goals and circumstances, demystifies this process.
We present the positive features and costs of each policy, according to the qualifications you must meet (to be eligible to purchase life insurance); and we are at your side, ready to answer your questions and explain the underwriting guidelines because we want to help you.
Transparent, accessible and wise – those strengths are at the center of everything we do.
Working with an Independent Agent versus a Captive Agent.
You can spot the difference between these two once you work with an independent agent to shop for life insurance.
A captive agent can only show you quotes from one company, the company he or she represents. Imagine the limitations of that position. When you work with an independent agent, on the other hand, you have the ability to get quotes from more than one company.
That means you get a better price for a life insurance policy. You get more of what you need, by spending less, when you work with an independent agent.
Take a look at the enclosed chart, where we include pricing examples of Local Life Agents versus State Farm, Farmers, All-State.
American Family will not even let you see quotes without talking to an agent. Wow. So we left them out.
Male Non Smoker Best Rate Class age 37
|20 Year Term||$100,000||$250,000||$500,000||$1,000,000|
|Local Life Agents||$10.30||$15.22||$24.85||$43.76|
|All State||NA on site||$40.92||$73.04||$NA on site|
We Take Our Independence a Step Further.
We have the world’s most powerful Quote Engine, built with in-house with our own proprietary technology. We make it easy for customers to shop, and calculate the cost of certain limits and the term lengths of individual policies.
Below is an example of our Quote Engine in action. The results are clear, and there is no other resource of this kind on the Web for shopping for life insurance.
We also have an 8-page Buyer’s Guide that explains how to provide your family with the maximum amount of life insurance at the lowest cost possible.
Check out our Buyer’s Guide here. Below is an excerpt from that material.
How Local life Agents Improves the Experience of Working with an Independent Agent.
We work with you, from start to finish, acting as your guide, ally, and advocate. Remember: Buying life insurance is not easy, since there is so much erroneous and conflicting information online. There are misconceptions aplenty about getting life insurance; that it is simple to purchase and always affordable to own, or a quote is a guarantee of costs and coverage. Not true.
We clarify these issues because we are independent. We do not have any pressure to sell a particular policy or to promote only one insurer because of some generous commission structure.
Most importantly, we ensure that you have an experienced professional who delivers personalized service with a degree of exceptional thoroughness and care.
You should not have to worry about the intricacies of buying life insurance – that is our job, one we take seriously because it is a serious duty.
We offer comprehensive solutions to complex challenges while making convenience – your convenience – our priority.
Our Application Process
The application process is thorough, requiring you to provide information about any medical ailments you may have, as well as material about medications you take and background about your lifestyle, including answers to questions about whether you are a smoker, have a suspended driver’s license (or a past citation for a DUI or DWI), have a history of surgeries (for a chronic condition) and have any criminal convictions, among many other things.
The process can be tedious and different among different life insurance companies.
We streamline the application process by educating you about this exercise before you do anything else.
We also explain what one insurer, with regard to one policy, may want versus what another insurer (with a similar policy) may not even ask to see.
The point is: We bring stability to a situation that can be – and with other agents is – chaotic, stressful and disappointing.
Thanks Brad I’m encouraging my daughter to work with me as an independent agent. She is in college and stopped by NYL booth and wanted to know my thoughts …your article encompasses by thoughts…and it was not coming from me…
I always tell college students that a career in insurance can’t be beaten if you do it right. Residual income, unlimited income opportunity, book value, and freedom to be own boss. It can be a great career choice that many college-age kids never think of.