Everything you should know about Insurance Agent and Pricing – Insurance Consultation – Part 1

You will find two kinds of people who are great at selling like insurance: Brokers and Agents. Well, these terms are often confused to be interchangeable without mentioning the difference between them, which is hard for people to understand. Let us add more confusion to it; there is not much of the difference between both.

The only difference between these commonly used terms is about working for a company or independently.

Captive/ Career Agents:
They are the agents, which are employed for one company. They are bound to sell insurance policies for one insurance company. State Farm Wood Land Park is one of the leading names, which are well known for utilizing captive/ career agents. The only way you are offered any insurance policies through companies like this are via their exclusive agents. Before finalizing for any insurance policy you see online, we recommend to prefer insurance consultation by renowned company to understand well how it works. Researching online and consultation can give you better idea in which direction to move in.

Brokers:
Generally, brokers are considered to be independent. Though the core job is same but any specific company does not bind brokers. They are open to sell any insurance policies from auto insurance to business to long-term disability insurance and many others. As they are not employed to any one company, they can go as diverse as much they want to.

These models have their own pros and cons but for agents, the biggest benefit is about the knowledge of all ins and outs of policies offered by one company. They are aware about all they have at back of their hands. However, on the other side, brokers get you the best price on comparable policies all the way to the related market.

It is to be noted that generally they are confused with each other but you need to pay attention to the distinctions between both the models.

How they get compensated?
They get compensated by two major methods, which are:

• Commission-based

It means that both of these models get paid indirectly. The person availing the insurance policy/ies pays the insurance company directly. However, the company pays the commission to agent or broker for selling their product. The maximum percentage of agents and brokers are working on commission-based. You being a buyer do not have to pay any extra. The plan you are going for has already the price written which will go to them after you sign up for any.

• Fee-only

This kind is rarely available. It means that you being the buyer of any insurance policy are paying directly to them their fee. They commonly charge hourly for insurance consultation no matter if it is for commercial insurance or any other. The fee-only agents/ brokers have claims that for they being independent would not sell any policies for money but offer you the best option, which is actually great.

It is important to know that on this factor of offering you the best option, you should never go for fee-only agents. There are good commission-based agents and brokers, which focus on your needs rather then pushing you for a product which may comes with enormous drawbacks. Do not go for agents if you feel pushed. Go for your ease at every cost.

Furthermore, one of the biggest flaws of fee-based agents and brokers is about increasing your overall budget because the commission cost is already built into your place. It means that you are paying two people on an extra in case of fee-based. You are paying extra for insurance consultation to fee-based which is freely given with commission-based agent or broker.
We stop here so that you are not overwhelmed with so much of information.
Check out our next one for more information regarding insurance policies.