Having life insurance is one of the most important investments people can make. Life insurance is a contract between a policyholder and an insurance company. The insured individual pays a regular premium in exchange for the promise that the insurance company will provide a lump sum payment to the designated beneficiary upon the insured’s death.
When it comes to choosing life insurance, it is important to understand the differences between a life insurance broker and a life insurance agent. Many people are confused by this distinction, so it is important to have a good understanding of the differences between these two roles.
What Is A Life Insurance Broker?
A life insurance broker is an independent professional who works for the policyholder, not the insurance company. The broker’s responsibility is to shop around for the best life insurance policy that meets the needs of the client. The broker will analyze the different life insurance options, as well as any riders and benefits, to provide their client with the appropriate coverage. The broker will also compare the cost of premiums between different companies and will negotiate, on behalf of their client, for better coverage and lower rates.
What Is A Life Insurance Agent?
A life insurance agent is an agent of the insurance company and works on behalf of the insurance company, not the policyholder. The agent’s responsibility is to educate the client on the insurance policies available and to promote and sell the insurance products. The agent does not shop around for the best policy and he or she does not negotiate for lower premiums.
What Are The Differences
One major difference between a life insurance broker and a life insurance agent is the level of service they provide. A life insurance broker is able to provide their clients with comprehensive advice about the policies and can negotiate on their behalf. A life insurance agent is limited in their ability to provide advice and can only present the policies available from the insurance company.
Another difference is the level of commitment the different roles require. A life insurance broker is typically more committed than an agency because they have to shop around and negotiate on behalf of their client. This requires much more time and effort than a life insurance agent who is simply presenting the policies available. Additionally, a life insurance broker must be licensed and bonded and must adhere to the regulations of the state insurance commission.
In Conclusion
it is important to understand the distinction between a life insurance broker and a life insurance agent. A life insurance broker is an independent professional who works for the policyholder and will analyze different life insurance policies to find the best fit and negotiate the best rates on behalf of their client. A life insurance agent is an agent of the insurance company and works on behalf of the insurance company to sell the insurance policies available.
When making an important purchase like life insurance, it is important to understand the difference between a life insurance broker and a life insurance agent so that you can select the professional who best suits your specific needs.
InsuraBull Life Insurance Agency is proud to be Independent Life Insurance Brokers serving our clients in Massachusetts, New Hampshire, South Carolina and Texas with their life insurance needs.