What is a life insurance broker?

Life insurance brokers can help you compare quotes, submit an application, and feel confident that you’re setting up the best possible insurance coverage available.

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Tory CrowleyAssociate Editor & Licensed Life Insurance AgentTory Crowley is an associate life insurance and annuities editor and a licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.

Edited by

Antonio Ruiz-CamachoAntonio Ruiz-CamachoAssociate Content DirectorAntonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.
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Reviewed by

Ian Bloom, CFP®, RLP®Ian Bloom, CFP®, RLP®Certified Financial PlannerIan Bloom, CFP®, RLP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, he was a financial advisor at MetLife and MassMutual.

Updated|2 min read

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What does a life insurance broker do?

An insurance broker’s job is to sell life insurance policies. Brokers are paid by the insurance company but work for you. It’s their job to listen to your financial needs, shop around to find the insurer that will be best for you, help you apply for coverage, and set up your policy. 

While you’re not required to work with a broker to get life insurance, it’s usually in your best interest. Working with an independent broker also offers you more choices than a captive agent can. If you have any questions or concerns about your life insurance needs or options, your broker can help you. 

How to buy life insurance through a life insurance broker

If you opt to work with an independent insurance broker like Policygenius, they’ll guide you through all the required steps to get life insurance, from beginning to end.

1. Calculate your coverage needs Insurance is designed to replace any financial loss that will occur to your loved ones if you die. To determine how much that would be, total up all of your debt, your expected income until you retire, and any anticipated expenses you’ll have during that time. Another simple rule of thumb is to get coverage equal to 10 to 15 times your annual income — but an insurance broker can help you calculate exactly how much coverage is right for you. Alternatively, you can use our life insurance coverage calculator to get a sense of how much life insurance you need.

2. Get quotes Every insurer will assess your risk using its own guidelines, and some may be able to give you a better price than others for the coverage you need. An independent broker can help you compare life insurance quotes and determine which insurance company will be able to offer you the best rate. 

3. Apply Once you determine which insurer is the best fit for you, your broker will help you fill out your application. The application is made up of basic personal information, and some questions about your health and financial history. 

4. Take a medical exam Insurers will want to verify your health status with a medical exam. Taking a medical exam is a lot like getting an annual physical. An examiner will measure your height and weight and take a blood and urine sample to confirm your health status. When possible, many insurers will waive this requirement and use a prescription history check and your medical records to verify your health instead. In either case, an insurance broker can help you schedule your in-person health examination or help you find a no-exam option.

5. Wait for approval After you submit your application paperwork and take your medical exam, the insurer needs to review your file. This process — called underwriting — usually takes four to six weeks, but can be faster, especially if you have few health issues. During this time, the underwriter working on your case will verify the information you provided. They may also reach out to you and your broker with clarifying questions or additional information regarding your medical history. Your broker will help manage these communications and, in some cases, will advocate on your behalf if the insurer has concerns about your health. 

6. Sign & pay Once the insurer sends you the paperwork for your policy, you’ll typically have 45 days to decide if you want to accept the insurance and have your coverage begin. Your broker will answer any remaining questions you have about your insurance policy and make sure you understand the terms. If you choose to accept the offer, your broker will prepare all the paperwork, help set up your first premium, and ensure that your coverage begins. As long as you keep paying the premiums, your policy will remain active. And if you have questions about your policy or need to make changes to it — for example, updating your beneficiaries — your broker can help you with that. 

Ready to shop for life insurance?

What’s the difference between a life insurance broker & an agent?

While brokers and agents both require state licensure, they’re different in the services they can offer you. A broker works independently and can shop on your behalf for policies from any insurer. An agent is usually captive to one company and can only sell you insurance products from the company that employs them. 

Advantages & disadvantages of a life insurance broker

While working with an insurance broker is best for most people, there are pros and cons associated with using a broker for life insurance. If you do use a broker, make sure you have high confidence in their experience and integrity. 

Pros

  • Working with a broker makes applying for insurance much easier than if you applied on your own. 

  • Your broker can shop around for you to ensure that you apply with the insurer who’ll be able to offer you the best rate.

  • Brokers have relationships with insurers and can advocate on your behalf if the insurer offers you a rate you don’t feel is fair. 

  • There’s no extra cost to using a broker. The insurer pays the broker, but they won’t charge you less if you apply on your own without a broker. 

Cons

  • Some brokers may charge you extra fees in addition to their commission. (If you’re unsure, you can ask your broker about this before you agree to work with them.) Policygenius doesn’t charge any additional fees and only receives compensation as a commission from the insurer. 

  • Some brokers are more skilled and experienced than others.

  • It can be hard to find a broker you trust. Policygenius works with 12 insurers to compare quotes and get you the best rate. It also maintains high customer service ratings and currently has a score of 4.6 out of 5 on TrustPilot. 

How do life insurance brokers make money?

The insurance broker is paid a commission from the insurer. When you set up insurance, you’ll make regular payments to the insurance company to keep the policy active. A portion of your payments will be used to compensate your broker. 

You’ll pay the same amount in premiums whether you use a broker or not. For the broker, it’s in their best interest that you keep your policy active and you keep paying the premiums, so they’ll continue to get paid. But this feature also works in your interest because the broker is incentivized to get you a policy that you’re happy with and will keep, not one that’s overpriced or offers more insurance than you need. 

Should you use a broker to buy life insurance?

Most people can benefit from working with a broker. Independent life insurance brokers can offer significant help to you when shopping for and purchasing life insurance — at no additional cost to you. Unlike a captive agent, brokers can compare quotes from multiple carriers to find you the best rate. 

Brokers will help you apply for coverage, advocate on your behalf, and ensure your policy becomes active. For most people, working with a broker like Policygenius is in your best interest. 

Policygenius is an independent broker that works with over 12 insurers. This flexibility allows you to compare rates and find the best policy for you.

More about how life insurance works

Author

Tory Crowley is an associate life insurance and annuities editor and a licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.

Editor

Antonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Expert reviewer

Ian Bloom, CFP®, RLP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, he was a financial advisor at MetLife and MassMutual.

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