The independent agent or the captive agent – what is best for you?
Whether you’re looking to open your own insurance agency or looking to purchase an insurance policy, it’s important to learn the difference between independent agents and captive agents. Once you’ve assessed who you need to contact for your next policy or what line of work you want to go into, you’re better prepared for the road ahead. Figure out if an independent agent or a captive agent is better for your situation.
Captive agents are contracted to sell policies for a single insurance company, whereas independent agents can sell the policies of many different companies. In both cases, the agents must be licensed in the states in which they do business.
Owning and operating a captive insurance agency means working for one company. You will only have to learn one company’s products, policies, and guidelines to do business, and you won’t have to worry about marketing as the brand will be nationally recognized.
The downside, however, is that you only have one product to sell your customers. Even if they aren’t the best prices or the most suitable product, they are the company you represent, and therefore the product that you must convince the customer to go with. Furthermore, if your parent company stops selling a certain line of insurance, you won’t be able to sell it either. You may be obligated to push certain products that you don’t feel your client needs or wants.
Your main priority for your independent agency will be to build your own book of business and do the right thing by your customers. You are free to make your own hours, rules, and market your agency how and when you want. Best of all, you’re able to provide competitive quotes for your clients through multiple different insurance carriers. This means that if one product isn’t suitable for your client, you’re free to search for another carrier with a more suitable product line for your clients’ needs.
As an independent agent, you will be a small business owner that will need capital to start the business. Money may be tight until you start selling more products, and you must wisely put the money you do earn back into the company for growth.
Join National Life Insurance Solutions and find out how we can help you. From training to carriers to high commission, we ensure that you – and your clients – are never restricted in choice. Contact us today to get started.