Cost & Coverage
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If you’re looking to start the process of buying life insurance, an agent or broker can help you understand your options
Agents earn commission on the policies they sell, but that commission doesn’t come at any extra cost to the consumer
You may still want to do your own research before meeting with an agent to make sure you’re not sold a policy that offers more coverage than you need
When you buy life insurance, you may find it useful to enlist a life insurance agent to help you. Agents work with life insurance companies to help potential customers navigate the process of buying a life insurance policy. While you can shop around for life insurance on your own, using a professional who knows the ins and outs of life insurance, such as an agent, can save you time and money.
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A life insurance agent is a licensed professional who sells insurance policies to consumers on behalf of one or more insurance carriers. To get a license in their state, an agent needs to take an accredited course and pass a test.
If you’re looking to start the process of buying life insurance, an agent can help you understand your options. It’s the agent’s job to try to sell you a policy, but he or she should also have a good grasp of what kinds of policies are available and which would be a good fit for your financial situation and your lifestyle. That includes making sure you’re not buying more coverage than you need.
Agents should know a company’s policies inside and out and should be able to answer any questions you have about buying life insurance coverage, like:
In addition to buying the right type of life insurance, you’ll want to find an insurer that offers you the best rate. Insurers will charge you a higher premium if your medical history indicates that you pose a higher risk, and an agent could help you figure out which insurer penalizes certain health conditions more than others.
Depending on your health needs, some life insurance companies may be better for you to work with than others. Check out Policygenius’ explainer on the best life insurance companies to get a sense of what’s out there before meeting with an agent.
Life insurance brokers are similar to life insurance agents. Agents and brokers both work with insurance companies to help shoppers find the right policy, but agents are often more limited in the number of carriers they work with while brokers aren’t beholden to any single carrier.
An agent that works directly for one insurance company is called a captive agent. Captive agents can only offer you their parent company’s policies.
Brokers and noncaptive agents (also known as independent agents) work with a large number of insurance companies and can help you compare policies from each. They may also sell additional insurance products, like disability insurance, homeowners insurance, and auto insurance.
If you're looking for details about a specific insurance company's products, one of their agents may be the best person to talk to. However, if you're trying to comparison shop across multiple insurers, you may want to contact a broker who can help you evaluate policies from several different carriers.
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In most cases, life insurance agents won’t charge you anything if you work with them to buy life insurance. So how do they get paid?
Most agents earn a percentage of the premiums on life insurance policies they sell—which is called a commission—rather than a set salary. That commission, however, doesn’t come at any extra cost to you because it’s already built into the premium.
Insurance prices are regulated by each state’s department of insurance. Each insurance company develops rate tables and then files those rate tables with the state’s insurance department. Because these rates are set beforehand, an agent can’t offer you one company’s policy at a different rate than you’d get by simply going to the company itself.
Some agents may charge you a fee for their service instead of earning a commission, but these fee-only agents are rare.
Buying insurance on your own can be confusing. Even just researching your options is often a challenge: Different resources might have conflicting or inaccurate information, especially as federal and state insurance laws change.
It’s an agent’s job to help you navigate all the nuances of life insurance and guide you through the process of buying a policy. While you can apply for life insurance entirely on your own, sometimes that means a lot of waiting for a response from a carrier before you know where you stand in the application process. But an agent can update you as move through the funnel.
It’s also useful to for someone to have all your information on file in case your application gets declined, which could happen if you fail to disclose medical conditions or your lifestyle is too risky to be covered. If you make improvements to your health and lifestyle, the agent can automatically submit your application again when you’re ready. Agents who can offer you multiple types of insurance, such as disability insurance, may even be able to reuse your information across applications if you need more coverage.
A good life insurance agent will know which policies best suit your individual situation and steer you toward the best option. But relying solely an agent’s expertise also means you’re at a disadvantage if they mislead you about how much or what type of coverage you need.
A life insurance agent is essentially a salesperson. If you don’t buy a policy, he or she doesn’t get paid. And because of the way commission works, the more expensive a policy you buy, the more the agent gets paid. You could be roped into a life insurance policy that offers way more coverage than you need, with premiums much higher than you’d pay for more accurate coverage. Before working with an agent, it’s a good idea to make sure they’re licensed in your state, and to read any reviews they might have.
Come armed with that info when you’re ready to meet an agent, and you won’t need to accept the first offer. Or simplify the process even more and use Policygenius to sort through available life insurance options and apply online.
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Yes, we have to include some legalese down here. Read it larger on our legal page. Policygenius Inc. (“Policygenius”) is a licensed independent insurance broker. Policygenius does not underwrite any insurance policy described on this website. The information provided on this site has been developed by Policygenius for general informational and educational purposes. We do our best efforts to ensure that this information is up-to-date and accurate. Any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application. Savings are estimated by comparing the highest and lowest price for a shopper in a given health class. For example: for a 30-year old non-smoker male in South Carolina with excellent health and a preferred plus health class, comparing quotes for a $500,000, 20-year term life policy, the price difference between the lowest and highest quotes is 60%. For that same shopper in New York, the price difference is 40%. Rates are subject to change and are valid as of 2/17/17.
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