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Brokers VS Agents: What is the difference?


A broker is an insurance expert that legally represents people or businesses that are looking to buy insurance. In some states, insurance brokers have a fiduciary duty to customers, meaning they are required by law to act only in the best interest of their clients.

A broker will work with their clients to identify and put together the best possible insurance plan for their specific coverage needs. They have no obligation to sell policies from one insurance company or another, meaning that they can shop around to find the best policies at the best prices according to their clients’ needs.

Life insurance brokers. Like independent agents, brokers can sell policies from a variety of insurance companies. But insurance brokers typically represent the buyers, not the insurance companies. Some brokerage firms let you compare quotes from various companies and buy coverage online. Brokers can also be individuals working more personally with clients to find the best coverage options


Life insurance agents. In general, there are two types of agents: captive and independent.

  • Captive agents work with one insurer and sell products offered by that company only. For example, a State Farm life insurance agent sells only State Farm policies.
  • Independent agents can sell policies from multiple companies, but only those with which they have an agreement to sell.

Things to consider when choosing an agent or broker

Which life insurance companies does the agent represent? Make sure the agent or broker sells policies from insurers you want to do business with.


What professional designations does the agent or broker have? Common designations that show a commitment to specialized education in life insurance are CLU, chartered life underwriter, and ChFC, chartered financial consultant.

 Does the agent or broker have experience working with clients like you? For example, if you need life insurance to fund a buy-sell agreement for a business, ask if the agent has worked with other business owners.

 Does the agent or broker pay attention to your needs? An agent should understand your financial situation and tailor recommendations to fit. Avoid anyone who tries to pressure you into decisions or products you don’t need. See our take on ways agents try to upsell you on life insurance.

 Is the life insurance agent or broker licensed in your state? You can check through your state’s insurance department to see if the agent or broker is registered. Click on your state to go to your local insurance department’s website