Life Insurance Agents

A life insurance agent or broker is the person that negotiates, sells, and solicits insurance. A brokerage firm is a financial entity that intermediates the buying and selling between two parties. Brokers have the responsibility or researching the market so they can provide clients with the best life insurance quotes. Some traditional companies have become a source of up-to date quotes and stock prices. The largest insurance brokers in the world are Willis Group Holdings, Marsh & McLennan and Aon.

Sometimes the two terms, broker and agent are separated. An insurance broker represents the insured and is not bound by a contract to companies. The agent can be a firm’s representative with a primary alliance to the carriers. Agents and brokers are the retail side of the insurance, because they assist applicants with the development of risk management strategies and plans. They must find out information about the lifestyle of an individual and teach them about what policies are available for certain types of risks.

Life insurance agents have a commission based on many factors, such as how much they sale and the company’s plan. The commissions can also depend on the insurance plan sold to applicants. The two basic types of policies are cash-value life insurance and term life insurance. A term life insurance expires after a period of 10, 20 or 30 years, while a whole life insurance remains in force until death occurs and also has cash value. Usually, term life insurance is the cheapest option available.

The commission life insurance agents receive is also influenced by the type of insurance, term of whole life. On average they make about 90-105% commission on whole life products and 30-70% for term life insurance. This is the first year commission on the premium. Subsequent year earning are lower, at approximately 4% for term products and 6% for whole life insurance. Some companies offer a one time additional fee when a contract is signed with a new client.

Many people find the aggressive traditional techniques intimidating and prefer to buy an online policy.

Online agencies are revolutionizing the way consumers purchase life insurance through social media and consumer outreach programs. Policies can be rapidly received and stored digitally, thus easing the stress of buying coverage.

An online life insurance agent charges a relatively small commission, because the trades are performed via computerized systems and a representative does not assist the process. Because this method is becoming very popular, traditional brokerage firms offer many discounts so they can keep up with the competitive market.