Where to buy life insurance

You can buy life insurance from an agent, broker, direct from an insurer, or an entity like your employer or credit union. Find out which is best for you.

Amanda Shih author photo

Amanda Shih

Published August 28, 2020


  • Where you buy life insurance comes down to what you prioritize in your shopping experience

  • Brokers serve the buyer to sell insurance from several companies, while agents work for a specific company or companies

  • Buying directly from an insurer can limit your options and ability to compare quotes

  • Be wary of professionals who may recommend costlier policies than you need

When you buy life insurance, you have a lot of decisions to make. One of the first things you’ll choose is where to buy your policy. There are several places to buy life insurance: you can purchase a plan from an affiliated agent, an online broker, directly from the insurance company, through your financial adviser, or even from an organization with which you’re affiliated, like your employer or credit union.

Regardless of where you buy a policy, the price charged by your insurer will be the same. This can be confusing because your quotes could differ depending on where you buy your policy. But once your application goes through underwriting at the insurance company, your premium will be the same no matter where you submitted your application.

Life insurance premiums are registered with the state and highly regulated: There are no discount codes or holiday deals. Your premiums are based on how the insurance company rates your particular health profile, and the same underwriters review your application no matter where that application initially comes from.

But even though the prices are the same, the experience of purchasing life insurance does differ depending on how you purchase it. Some avenues offer more impartial advice than others, while some might involve more opportunities for personal connection or expediency. Read on to find out which is right for you.


Life insurance agents vs. brokers

Most people purchase life insurance from an insurance agent or broker. According to LIMRA, an association of insurance and financial services companies, 89% of the life insurance market is sold by agents or brokers.

Sometimes “agent” and “broker” are used interchangeably, but it’s important to distinguish them. Independent brokers like Policygenius are not affiliated with any insurance company and sell policies from multiple companies. They work on behalf of the customer to prepare applications. Affiliated agents, on the other hand, are appointed by one or more insurers to sell their products. They work on behalf of the insurance companies.

Buying life insurance from an independent broker

Independent brokers aren’t beholden to any single insurer, and they are in a unique position to know which companies offer the best pricing to people with your health history and specific needs. Working with an independent broker allows you to compare quotes from multiple insurers and choose the best policy for you.

Reasons to buy from an independent broker

They can offer unbiased advice

Brokers work with several insurance companies and have submitted many life insurance applications, so they can make the most accurate prediction for how each insurance company is likely to treat and rate your application. Every insurer has its own guidelines for every medical condition, financial situation, and family health history. Quoting tools can’t accommodate every medication or condition, but a good broker will know how each insurer is likely to view your specific profile and be able to recommend the best life insurer for you.

They can shop your application around

Some agents and brokers can go beyond that, however. At Policygenius, if your application comes back from underwriting with a higher premium than you were quoted, or even if it was declined, we can shop your application around to another provider to try to get you a lower monthly or annual premium.

They can keep you updated during the process

Underwriting can take four to eight weeks or more depending on scheduling for your medical exam, whether the underwriters request your medical records, and how responsive your doctors are in submitting those records. A broker can follow your application and keep you up to date on its progress so you don’t feel left in the dark.

Cons of buying life insurance from an independent broker

Not all brokers are created equal

Some insurance brokers are more knowledgeable than others, so you can’t just pick a random broker and call it a day. Do some research on your broker and look for customer reviews before committing. If you don’t feel like you’re getting the answers and support you need from one broker, you can move on to another or try a different shopping method. You don’t pay the broker for their time, and you should work with someone whose recommendations you can trust.

It might take a bit longer

If you have a particularly complicated medical history or present several risk factors for a life insurer to consider, it might take longer for a broker to find the best company for you. The broker will need to research and get feedback from multiple companies and scenarios to get you the most accurate suggestions. If you’re in a rush, this might be a negative, but it can save you money and headaches in the long run.


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Buying life insurance from an affiliated agent

Affiliated agents, also called captive agents, are who most people imagine when they think of a life insurance salesperson. Affiliated agents generally work alone or in small offices and they sell policies from select insurance companies.

Pros of buying life insurance through an affiliated agent

You may know your agent already

Many people choose to work with affiliated agents that they know from their community, or maybe even personally. Life insurance applications require you to share a lot of information — your finances, medical history, risky habits, and driving record are all a factor — and you may feel more comfortable sharing those details with someone you know and can meet in person.

They know the products they sell very well

Because affiliated agents only work with specific insurance companies, they know those companies' offerings very well. They can explain the types of life insurance that each company sells and which riders you can add to your policy to support your goals. They’ll also be able to give you the best estimate for how long the application process will take and what personal information will have the greatest impact on your premiums with their insurers.

Cons of buying insurance through an affiliated agent

They work on behalf of the insurance company

Because captive agents work on behalf of an insurer, they can only get you a policy with a company they work for, even if you might get a better policy for less elsewhere. For example, if you have a family history of cancer but the company that employs the affiliated agent isn’t particularly forgiving of family cancer history, you could end up paying much more for life insurance than if you worked with an independent broker.

They’re often paid on commission

Most life insurance agents are paid on commission, meaning they have an incentive to sell you more expensive policies or more coverage than you need. For example, term life insurance is the right product for most people, and whole life costs five to 15 times more. But because captive agents are paid on commission, one might be incentivized to sell you a whole life policy even if you don’t need it.

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Buying life insurance directly from the insurer

While many insurance companies only sell their policies through agents or brokers, some allow you to apply to their plans directly. It may seem like a smart idea to go straight to the source, but applying through the provider can leave you with limited options.

Pros of buying life insurance directly from the insurer

The insurers are experts in their plans

No one is more familiar with the particulars of an insurance company’s plans than the insurer itself, and if you’re familiar with the company already, you may feel confident in their product’s quality and reliability. If you have specific questions about the plan for which you’re applying, a representative from the company will be able to get you accurate answers quickly.

Cons of buying life insurance directly from the insurer

You may not get the best prices

Even if you choose an insurer based on careful research, it’s possible that the company won’t be able to offer you the lowest premiums based on your specific health history. If you only look at life insurance quotes from one company, there’s a chance that you could miss out on a better deal from a company that isn’t so strict about your health conditions, family history, or lifestyle. An independent life insurance agent can not only help you shop around, they can determine the best company for your unique health history, hobbies, and background.

You won’t get independent advice

Insurance companies and their employees have an interest in selling more and bigger policies to contribute to the success of their company. You may not receive impartial advice from a company representative, and their suggestions could lead you toward costlier coverage options that may not be what you need.

You may have to start over

If you apply directly with the insurance company and your application is declined or your final premiums are higher than the amount you were quoted, you’re out of luck. You’d have to start the whole process over with a new insurer or explore other ways to shop for a policy to find a better deal.

Buying life insurance from a financial adviser

Some financial advisers are also licensed to sell insurance products, but they are rarely insurance experts.

Pros of buying life insurance through a financial adviser

They know your personal situation

If you have a financial adviser, they will be very familiar with your financial situation and goals. A financial adviser can offer a plan of action tailored to your life insurance needs and your long-term financial goals.

Cons of buying life insurance through a financial advisor

They might not be insurance experts

Your financial adviser might have a general understanding of life insurance, but since they don’t spend all day, every day selling insurance policies, they won’t know the intricacies of the industry. They may be able to give you basic advice, but it’s unlikely they’ll be able to point you toward the best insurers for a specific health condition, for example.

They are likely paid on commission

While you may pay your financial adviser for each meeting or service they provide to you, it’s likely they’ve partnered with specific insurers to sell their policies. Commission-based advisers make more money the more coverage they sell you, which means your financial adviser could be incentivized to make recommendations that are better for their financial interests than for yours.

Other ways to purchase life insurance

There are other ways to purchase life insurance, which may only be available to you if you’re affiliated with a specific organization. Unless your organization offers multiple provider options — a rarity — the same advantages and disadvantages of buying directly from the insurance company apply.

Through your employer

Many employers offer group life insurance to employees. If your employer subsidizes some or all of your premiums for a group policy, it doesn’t hurt to opt in. But if you know you need life insurance, it’s better to purchase your own policy since group policies usually come with lower coverage amounts than private policies and you likely can’t take group coverage with you if you leave your job.

Some companies allow you to convert a group policy to a whole life policy, but that could make it prohibitively expensive. Some employers also offer voluntary supplemental life insurance, which allows you to add coverage to your existing group policy. However, supplemental policies come with some restrictions on coverage amounts and portability as well.

Through an organization

Some organizations have affiliations with certain insurance companies. Costco, for example, sells policies from Protective. AARP sells policies from New York Life. The risk is that the one insurer your organization has partnered with may not be the most affordable insurer for you.

Through a credit union

If you’re a credit union member you may receive life insurance offers from your credit union. You’ll only see premiums from one company in these situations as well, again putting you at risk of paying more for your policy than you would if you had an opportunity to do comparison shopping.

When deciding where to buy your life insurance, think about what parts of the experience you want to prioritize. If it’s most important to you to buy from someone who knows the ins and outs of your financial situation, buying through your financial adviser might make sense. If expediency is your top priority, you might like to work directly with the insurer or an affiliated agent. To ensure you get the best pricing available and work with someone knowledgeable about multiple insurers and their policies, an independent broker will likely offer you the most thorough shopping process and most affordable final premiums.

Insurance Expert

Amanda Shih

Insurance Expert

Amanda Shih is an insurance editor at Policygenius in New York City. Previously, she worked in nonfiction book publishing and freelance content marketing. Amanda has a B.A. in literature and communication from New York University.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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