Life Insurance Broker vs Agent

What's the difference between a life insurance broker and a life insurance agent?


And why should I care?


What's a life insurance broker vs agent?  Here's the definition of a broker from Wikipedia:


"Though not an absolute separation; an insurance agent is an insurance company's representative by way of agent-principal legal custom. The agent's primary alliance is with the insurance carrier, not the insurance buyer. In contrast, an insurance broker represents the insured, and relies on common or direct methods of perfecting business transactions with insurance carriers. This can have a significant beneficial impact on insurance negotiations obtained through a broker (vs. those obtained from an agent)". 

Thanks Wikipedia!


Why is the formal definition of the difference between a life insurance agent and a life insurance broker important?


Well, it's the difference between having an insurance professional work for you and your best interests while procuring the appropriate life insurance versus a life agent who represents an insurance company first and who tries to sell you a policy with that company over any other life insurance company, even if it's more expensive for the consumer. 

It's the difference between complete transparency during the term life insurance buying process versus a closed transaction without full disclosure of the inherent conflict of interest.

Please understand that I'm not completely opposed to an agent selling life insurance at all!  Most brokers actually started their careers as agents with large single companies where they received training and were introduced to the industry, which is what I did, in fact.  In return for most of our expenses being paid, especially the main overhead like office space, telephone, printing and computers, etc, these "career agency" companies expect first shot at every piece of possible business, regardless if the company or policy was a good fit or not.  Herein lies the conflict.


Most large old companies, not all, but most, offer decent term life insurance policies that are typically more expensive than other "brokerage" companies. 


This is because of all the high fixed costs that the actuaries need to build into and account for in the life insurance policies they sell.  And that's OK, it's just not conducive to building and presenting the most competitive term insurance policies to consumers.  Again, we all started somewhere and the training that most long-term life insurance brokers received with these career agencies was, for the most part, excellent.

If you're reading this page, then you're probably shopping online for the lowest cost term life insurance policies offered in the US.

You wouldn't find openly available instant term life insurance quotes available on Metlife's web site, for example, or Northwestern Mutual's site either.  Before these companies release a term life quote, they will want you to either meet or speak with an agent for their company.  Here, because we are independent life insurance brokers, we give you instant quotes and we won't call you unless you want us to.  We are hired by you when you decide to purchase life insurance through us.  The insurance company pays us a commission directly and we pay our own overhead expenses.  We are NOT in an agency!  We have almost 40 different contracts and can market your policy to the best company for your risk, especially if you have pre-existing conditons.


So, please take a look around our site.  Get some quotes and play what-if scenarios with your spouse or partner.  You can run as many instant term life insurance quotes as you'd like.  If you have any questions about the results, feel free to email us or call us.  We're very friendly and we'd love to talk with you over the phone.  See how easy it is to take the first step to protecting your family!

Life insurance broker vs agent
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