Both independent agents and captive agents can help their clients choose the right plan for their needs. Photo from Storyblocks.
The knowledge of a licensed insurance agent can be an amazing resource to anyone trying to stay healthy and save money while doing it (which is, let’s face it, all of us). Whether you’re looking to become an agent and help your community or get help from an agent yourself, it’s a good idea to be aware of the different kinds of insurance agents before jumping in with both feet.
Generally speaking, there are two different types of agents: independent insurance agents and captive insurance agents. Both perform the same job—helping the American public understand the insurance industry, solve complicated financial problems, and advocate for themselves in a corporate health landscape. The difference lies in who those agents work for.
Captive Insurance Agents
Captive agents, as the name implies, are tied to a single insurance company or entity. Because they work exclusively for one company, they may get certain perks as a part of their work contract, such as a steady salary, health and retirement benefits, in-house marketing, connections like client leads and doctor partnerships, as well as smaller necessities like an office space, a computer, a nice room to host scheduled clients in, etc. For clients, having a captive insurance agent as your agent means that they will have a profound knowledge of all of the policies their company offers and a wealth of company resources at their fingertips to help them help you as best as they can.
The downside to being or working with a captive agent is just that—they are captive. They can only offer their clients what their employer wants them to sell. So, for instance, if a diabetic client comes to them in desperate need of a health plan to help them cover the cost of their insulin, but the agent’s company is not offering a plan with that benefit, they are out of luck. The captive agent is subject to the priorities of their host company and can only offer policies under the umbrella of their brand, for good or ill.
Some examples of companies that employ captive agents are State Farm, Allstate, and UnitedHealthcare. You will find that most (if not all) big-name insurance companies have captive agents to help educate consumers and promote their products specifically.
Independent Insurance Agents
On the other hand, independent insurance agents are not employed by a single company. Rather than working for a company, they work with multiple companies, acting as an autonomous intermediary between their clients and their carriers. They are state-licensed, self-employed insurance experts who study the product offerings of all insurance companies and collaborate with clients to narrow down company and plan options until a suitable solution is found. The result is, hopefully, a client with a health insurance plan that is tailor-fit to their unique needs.
The advantage to being and/or working with an independent insurance agent is the broad range of options they make available. Because they are not tied to a brand, they can hunt for the best-fitting options from every company. Borrowing the same example from above, if a diabetic client asked for an agent’s assistance with finding a plan that could lower the cost of their insulin, the independent insurance agent would be able to shop around, compare benefits and prices between carriers, and present their client with options from all different companies. Because they are not contractually obligated to sell from a company catalog, consumers typically feel they can trust independent insurance agents more than their captive counterparts, increasing earning potential through retention. Plus, because independent insurance agents work for themselves, they can set their own hours and do business wherever they please, providing extra convenience and flexibility to the people they serve. So, yes, if you are an independent agent, you can work from home, wear pajamas all day, and still be a healthcare rock star.
There are also cons to being independent. Their lack of back-office support, benefits, and resources can make things like marketing, technology, lead generation, and certifications more difficult and expensive. For instance, a captive agent may get a steady salary for working with their company of choice, but an independent agent only earns money if they close sales. A stable paycheck is not a part of the equation, and they would be expected to foot the full bill for any ads they run, events they host, certifications they want, etc. They also may not have the same depth of knowledge on a carrier’s specific products, and they must facilitate good relationships with clients, companies, and other partners all on their own.
Takeaways
If you would like to connect with an agent to assist with your health insurance situation, asking yourself these questions will help you determine what kind of agent you will need…
- Is there a specific company I want to get my insurance from?
- Do I care about having my insurance come from a big, well-known brand?
- Do I want to compare plans across multiple providers for the best deal, or just look at one company’s offerings?
- Am I at risk for any conditions or have a health condition that could use a custom health insurance plan?
After reflection, you may also find that your specific situation requires a type of insurance outside of the traditional “health” box. You can read more about the different types of medical-related insurance—such as disability and dental—and everything they are designed to protect here.
Finally, if you are someone looking to become an agent, you must evaluate your career priorities and select the approach—independent or captive—that provides you with the lifestyle that works best for you. As you research the career, you may also find that insurance entities such as FMOs offer a mix of captive and independent insurance agent benefits, so if neither of those approaches works for you, accommodations can always be made. If you have a passion for helping people in dire physical and financial straits find care they can afford, you will be an excellent agent no matter if you’re tied to a company or climbing free solo.
Agents
We hope that this information on health insurance brokers is useful to you.
Empower Brokerage is dedicated to helping you make informed decisions about your health and finances. Whether it’s through webinar training, one-on-one calls, seminars, or marketing plans, we want you to be successful!
Give us a call at 888-539-1633 or leave a comment below if you have any questions.
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Born in and raised in Maryland, educated in Utah, and new to Texas, Cristin is a purveyor of stories from all widths and walks of life. With a bachelor’s degree in filmmaking and a staunch passion for literature, she aspires to give digital spaces a uniquely human touch.
