Captive insurance agents vs. Independent insurance agents

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When you’re looking to purchase insurance you will have many decisions to make. Choosing an agent is one decision that you must consider. Beyond the usual consideration there is one that is often over looked and many times not consider at all. The consideration is should you use a captive insurance agent or an independent insurance agent? You may be asking the questions “what is a captive agent?”, and “what is an independent agent?” But the biggest question is “why should this be a consideration?”

The term “captive agent” refers to the agents working relationship with the company he or she represents, and the same for the “independent agent”. A captive agent has an exclusive relationship with the company he or she represents. The company mandates that the agent only sells the products offered from that company only, for the privilege of working under their name. An independent agent has no exclusive relationship with any company he or she represents. The agent is free to choose the product he or she will sell and the company he or she will sell for.

Before we look at the question of “why should you consider one type agent over another?” let us look at the way agents get paid. All agents have some form of commission pay. New agents generally start out with a combination of paid and commission while the veteran agent is generally a full commission agent. Insurance agents must consider what company will give him or her the best chance to earn a living. Most agents look to work for big name companies because working for a big name company may offer them more opportunity to make a sale and get a commission check.

That said; now let’s look at the biggest question why should you consider what type of agent you use? The reason comes down to two more questions. The first question is about family, and the second question is about trust. The question about family is this, when the agent is presenting you with a product who’s family does he or she have in mind your family or their own family? The question of trust is a personal one for you as the client. When you look into the agent’s eyes do you trust that what is being offered is what is best for your family and not the agent's? The captive agent must sell what the company offers to get paid.

Independent agents generally have a wide variety of products and companies. This variety is good for the client and the agent. The client has a better chance to find a company that can fit exactly what they need, the client can shop for the best price, the best company rating, and the best product without having to go or call company after company. The agent can look for what is the best product for this client and not feel pressure into selling anything that is close to what the client needs just to get paid.

There are many more facts to consider when choosing your agent, however don’t leave this consideration out. It may be the most important one of all.

Allen Stewart
www.taxsavingexperts.com
Insurance, Tax Preparation, and more

• Added on: Feb 9th, 2008
• Country: United States
• Language: English

• Author: Allen Stewart
• Listed in: Finance Investing
• Tags: insurance agents insurance agents