Why Buy from a Broker?

You may not know this but the individuals who provide insurance services fall into two basic categories: 

(1) “Captive Agent” OR (2)“Broker”

 Why should that matter? Because a captive agent is a person who has an exclusive contract with a single insurance provider. They can sell only what that company offers. Most of the really big auto and home insurance companies fall into this category as well as many of the well-advertised life insurance providers.

That could mean a lot to your wallet. Why? A captive agent represents the insurance company not you! Their job is to find customers for the company. It is NOT their job to find you the the lowest price. They may get a quota from their boss to sell “X” quantity of policies that month. They must make that quota consistently or they’re out of a job.

  • What if your life insurance needs are not met by the products their company offers? You will probably never know. Chances are, you will be offered something else and be none the wiser.
  • What if their product costs 50% more or even twice as much as the same kind of policy from a competitor? They may not know or can’t tell you. They have to make their quota. 

I’m not saying that all or even most captive agents are bad. I’m saying they are bound by contract to present their company’s products as the only solution to your needs. That makes their advice suspect.

Confessions of a Former "Captive Agent"

Many years ago, I was a “captive agent” (with Farmers Insurance Group). I could have given you a great auto policy and excellent homeowner’s insurance BUT the only life insurance I could have offered you just plain stunk. And, if I offered you anything else, I’d lose my contract (and thus my job)!

However, a broker represents YOU to find the best deal. Brokers (should) apply their expertise and knowledge of your personal needs to get you the best rate by shopping a multitude of insurance companies. Needless to say, now I am a broker. I suppose that makes me prejudice in favor of brokers. But not really. It’s just common sense. I became a broker because I felt it was morally wrong to be a captive agent. I just couldn’t stand it when my conscience told me to do one thing but my contract said to do something else.

Now, just to be fair, I must tell you the obvious – not all brokers are angels. There are creeps in every profession. Life Insurance sales has more than its share. Some are no better than used car salesman or politicians or _______ (fill in the blank). I know. I see these guys and gals at professional conventions.  And I fix their mistakes in the portfolios of their former clients who come to me for help. (See my clients’ original testimonials.) 

I believe that an informed consumer, working with an honest broker, is the absolute best guarantee of purchasing the right policy at the lowest price. (For my free book about how to avoid tricks, scams and gimmicks when buying life insurance, click here.)

If you choose well, your insurance broker will be an honest, caring professional who will put your needs ahead of their desire for a commission.

Enthusiastic But Clueless

There is another type of captive agent to watch out for.  You may know one of these people at work or in your family. They are usually recruited to sell life insurance by a friend, relative or co-worker into a multi-level marketing (MLM) opportunity like selling vitamins, beauty products or kitchen gadgets.  They get commissions on their own sales plus from the sales of everyone they recruit below them. All are promised easy, big money at pep-talk meetings.  World Fin****** Group and Prim***** are examples of MLM insurance services. These captive agents sell with enthusiasm and conviction because they are clueless about how their product compares with the competition.

A sales manager gives these agents very narrow, slanted training then sends them out to sell to every family member, friend and co-worker (then they earn a commission on every sale.) They are recruited to sell life insurance from every walk of life EXCEPT insurance (because an experienced professional would know better.) It’s a recipe for disaster for their clients.

Years ago I had an amusing lunch meeting with a new Prim**** agent who sought me out for the sole purpose of proving to me his company’s life insurance services were better than mine as a broker.  He was absolutely sure Prim**** was the only company doing right by the customer (because that’s what his trainer told him.)  As pre-arranged, we traded proposals for a fictitious 40-year old’s purchase of a $500,000 term policy. His best versus my best. It was no contest.  His rate was almost three times higher than mine as a broker. Same product. Two A-rated companies. 3x the price!

He was stunned silent, utterly shocked that his training had been proven false. Not long after he left the insurance business then went on to sell home-delivery pet food. And he called me to replace his overpriced life insurance. (It’s a true story.) 

Experience & Expertise

It’s a little known fact that, of all agents licensed to sell life insurance in a given year, 95% will have left the industry within five years. That’s a huge failure rate. Myself, I’ve helping clients with insurance for 31 years as of February 2021. That’s a lot of experience and expertise!

Who did you buy your last policy from? Are you sure you got the best insurance at the lowest possible price?

Unlike a captive agent, as a broker my responsibility is to you as my client. It is my job is to find you the best insurance (from a multitude of companies!) that fits your needs on the budget you have right now. That’s a huge difference. A broker is (or should be) an independent advisor who guards and protects your best interest.

My first commitment is to help you become an informed consumer. My years of experience has shown me that you’ll be happiest with your purchase if you understand your options and choose what to buy. For that reason this website offers you numerous consumer-education articles and I provide more via my monthly newsletter and the book I wrote about on how to avoid tricks, scams, gimmicks and rip offs when buying  life insurance. (Get it FREE BY MAIL!)

Sure, I’m giving away my knowledge for free. In fact, I run the risk that you could learn about insurance then buy from someone else. But why would you? When you are shopping for insurance you want to work with someone you can trust to look out for you. That’s why I give you the opportunity to check me out first.

You can get a good idea of how I do business by reading what my clients say about me. Click this link to read their words in their own handwriting.