What does a life insurance agent do?

Life insurance agents and brokers work with insurance companies to help customers buy life insurance. Agents work on the insurer’s behalf, while brokers work for the consumer.

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Katherine MurbachEditor & Licensed Life Insurance AgentKatherine Murbach is an editor and a former licensed life insurance agent at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.&Tory CrowleyAssociate Editor & Licensed Life Insurance AgentTory Crowley is an associate editor and a former 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.

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Antonio Ruiz-CamachoAntonio Ruiz-CamachoAssociate Content DirectorAntonio helps lead our life insurance and disability insurance 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.

Updated|3 min read

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A life insurance agent works to sell insurance life insurance policies to consumers. Life insurance agents can either work independently or for an insurance company. Buying life insurance through an agent or broker can help you get the right policy at the best price.

Key takeaways

  • A life insurance agent sells life insurance policies to consumers.

  • Agents work on behalf of the insurance company, while brokers work on behalf of the consumer.

  • A life insurance agent can be captive or non-captive — meaning they either work with one insurer or multiple insurers.

  • Each state’s department of insurance sets commission rates, so while agents and brokers earn money on the policies they sell, there’s no extra cost to the consumer.

  • You can shop around for a life insurance policy on your own, but using a professional can save you time and money.

What is a life insurance agent?

A life insurance agent is a licensed professional who sells insurance policies to clients on behalf of one or more insurance companies.

To get a license in their state, an agent must take an accredited course, pass a life insurance agent exam, and complete continuing education requirements every few years for licensing renewal.

How can an agent help you buy life insurance?

An agent can help you understand your options — from what type of life insurance policy is best for you to who you should name as a beneficiary. It’s the agent’s job to sell you a policy, but they should also be working in your best interest.

The agent should know what kinds of policies are available and which would be the best fit for you based on your financial situation and lifestyle.

Agents should be familiar with a life insurance company’s policies and be able to answer any questions you have about buying life insurance coverage, such as:

An independent agent can also help you figure out which insurer can likely offer you the best rate. Some insurers are more flexible with premiums when it comes to certain health conditions or lifestyle choices. Depending on your personal profile, you could pay less with one insurer than another.

Learn more about the best life insurance companies

Life insurance brokers vs. agents

Life insurance brokers are similar to life insurance agents. Both brokers and agents serve as intermediaries between the insurance companies and customers. Both must be licensed to sell insurance.

  • An agent who works directly for one insurance company is called a captive agent. Captive agents are more likely to recommend a policy offered by their parent company.

  • Brokers (also referred to as non-captive agents or independent agents) develop relationships with a large number of insurance companies and can help you compare policies from each.

  • Independent agents can easily submit your information to another insurance company in case your application gets declined or you receive a final rate that’s higher than expected. If you make improvements to your health and lifestyle, an independent agent can ensure you’re applying with the company that’s most likely to offer you the lowest premiums. 

Although they both work with insurers to help shoppers find the right policy, agents are often more limited in the number of companies they work with while brokers aren’t beholden to any single insurer.

“Though agents may be able to offer products from companies other than the one they work for, they are usually incentivized to sell policies only from the insurer that employs them,” says Jake Herskovits, life insurance carrier relations specialist at Policygenius.

Without the incentive from any single insurance company, an independent broker is often better suited to provide objective advice that puts your best interests first.

Why shop for life insurance with Policygenius

Policygenius is an independent broker where you can compare quotes and shop life insurance policies from the top insurers in the country. At Policygenius, our agents are non-captive and work for you, not the insurance companies, so you can trust their advocacy. Our experts are licensed in all 50 states and can walk you through the entire life insurance buying process while offering transparent, unbiased advice.

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How do life insurance agents make money?

Most agents earn a percentage of the premiums on life insurance policies they sell — a commission — rather than a set salary. That commission, however, doesn’t come at an 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.

These pre-set commission rates are another reason why comparing quotes is so important when shopping for life insurance to secure the lowest price.

Some agents may charge clients a fee for their labor instead of earning a commission, but these fee-only agents are rare.

Pros & cons of using an agent to buy life insurance

Buying insurance on your own can be confusing and researching your options is often a challenge, so it’s often helpful to work with an agent in some capacity — whether they’re a captive agent for one company or an independent agent for a broker.

Pros

  • They handle the communication. Sometimes insurance companies can request additional information or documentation as the application process goes on. An agent can update you as your application advances with the insurer and handle the communication so you don’t have to.

  • They can educate you on your policy choices. If you’re not certain how much coverage you need or which type of life insurance is best for you, an agent can help you understand your options before you buy.

Cons

  • They sell insurance based on commission. Some agents work solely on commission. If you don’t buy a policy, they don’t get paid. And because of the way commission works, the more expensive a policy you buy, the more the agent gets paid. If you’re not working with an agent you trust, you could end up buying a more expensive policy than you need.

Do you need a life insurance agent?

You can buy some life insurance policies fully online, but it’s usually best to speak with a licensed agent of some kind before buying a policy, especially if you have questions about how much coverage you need or which type of policy is best for you and your family. 

  • If you’re looking for information about a specific insurer’s product, one of its agents may be the best person to talk to.

  • If you want to comparison shop across multiple insurers, you’re better off contacting an independent broker like Policygenius who can help look at policies from several different companies.

Frequently asked questions

What’s the difference between a captive agent and a non-captive agent?

Captive agents work for one specific insurance company, while non-captive agents – also called independent agents – and independent brokers don’t represent any single company.

How does a life insurance agent make money?

Most agents earn a percentage of the premiums on life insurance policies they sell. Each state’s life insurance department regulates rates, so commissions are already included in the price you pay, regardless of which agent or company you use.

Do you have to use an agent or broker to buy life insurance?

No, you can apply for insurance on your own directly through insurance companies. But working with a licensed broker or agent is in your best interest. They can help you compare rates, explore options, and handle the back and forth while your application is underwritten.

How much does it cost to become a licensed life insurance agent?

The total cost varies by state and includes fees for required courses, exams, and licensing. Costs commonly run $40 to $100 for each course, exam attempt, or license application, but may be higher in your location.

Authors

Katherine Murbach is an editor and a former licensed life insurance agent at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

Tory Crowley is an associate editor and a former 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 helps lead our life insurance and disability insurance 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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