What are the Two Types of Insurance Agents?
There are two types of insurance agents: Independent Agents, who work with multiple companies and earn commissions, and Captive Agents, who represent one company, earning a salary with smaller commissions. Choose based on your preference for flexibility or stability. Square Insurance offers great opportunities for aspiring POSP agents.
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An insurance career can be rewarding in many ways. As an insurance agent, you help people with their insurance needs and earn good pay. To do well, it’s important to pick the right type of insurance agent role.
Whether you’re new to insurance or already working in it, it helps to know about the different types of agents. By understanding the main roles and what each one does, you’ll learn how the industry works and can find the role that’s best for you.
2 Types of Insurance Agents
The insurance industry has many types of agents because it’s a complex field. Each type of agent has a different job title, set of responsibilities, and level in the company. It’s helpful to know about these roles if you’re thinking about a job in insurance or already working in the industry. The two main types of insurance agents are independent agents and captive agents.
Independent Insurance Agents
Independent insurance agents sell policies from different insurance companies. They are self-employed and usually run their businesses. Their job is to find the best policy for each customer’s needs and connect the customer with the right insurance company. Instead of a salary, independent agents earn a commission for each policy they sell. They often work with smaller insurance companies.
Captive Insurance Agents
Captive insurance agents work directly for one insurance company and only sell that company’s policies. They are also called direct writers, exclusive agents, or career agents. Captive agents need to know a lot about the policies they offer to help customers find the best option. They earn a salary from the company and may also get commissions or bonuses, though these are usually smaller than what independent agents make.
Difference Between Independent Insurance Agents and Captive Insurance Agents
|
Aspects |
Independent Insurance Agents |
Captive Insurance Agents |
|
Definition |
Self-employed agents who sell policies from multiple insurance companies |
Agents who work for one specific insurance company |
|
Products Sold |
Policies from various insurance companies |
Only policies from the insurance company they represent |
|
Employment Type |
Self-employed, often own their own business |
Directly employed by the insurance company |
|
Income Structure |
Earns commission for each policy sold |
Earns a salary, may also receive commission or bonuses |
|
Commission Rate |
Typically higher commission rates |
Generally lower commission rates than independent agents |
|
Client Selection |
Finds policies to match customer needs from multiple insurers |
Offers only policies available from their company |
|
Knowledge Requirement |
Knowledge across various insurance products and companies |
In-depth knowledge of policies from a single company |
|
Role Suitability |
Suitable for agents wanting flexibility and variety in products |
Ideal for agents who prefer working within one company’s structure |
Conclusion
As more people want insurance, more companies and jobs are available. With so many options, choosing the right employer for an insurance career can be challenging. At Square Insurance, you can start your career as a POSP insurance agent and join the growing insurance industry.
FAQs
What are the two main types of insurance agents?
There are two types of insurance agents, an independent agent, which normally represents several companies, and a captive agent, representing only one company.
What does an independent insurance agent do?
Typically, an independent agent helps customers find the best insurance by offering policies from different companies. They earn a commission on every sold policy.
What does a captive insurance agent do?
A captive agent works for one insurance company and sells only that company's policies. The agent receives a salary and, in addition, can earn some commission or bonuses.
Which type of insurance agent is better for me to become?
If you want more freedom and work with multiple organizations, then the role of an independent agent is best for you and if you like stability with a single company, it would be good for a captive agent role.
