Captive vs. Independent… What is the difference?

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Posted on 25th March 2014 by Rita in Life Insurance |Retirement and Estate Planning

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captive agent vs independent agent

Many of us consult with an insurance representative for our insurance needs, and for good reason. Insurance representatives (agents) help us understand the complex world of insurance and help us get the best deal and/or the correct insurance coverage for our needs.

Which one should you speak with about your insurance and financial needs? There are big differences between these two types insurance representatives. Choosing the right agent for yourself is an important decision. Lets look at the differences between these two types of agents.

Captive Agent: Is an insurance representative who works exclusively for one insurance company (carrier). They offer only that one companies products, services, and coverages. Captive agents have an in-depth knowledge of insurance products for the insurance company they are employed by and are may be able to offer optimized product packages that save you time and money. Unfortunately, this also means the agent is limited to one company’s insurance products, guidelines and pricing structure. Therefore, they may not be able to assist a client who does not need or qualify for that company’s products.

More often than not a captive agent is paid by the insurance company either by salary or a combination of salary and commissions. The Insurance Company may provide the captive agent with office space and offer employee benefits. The employing insurance company may require their captive agents to meet sales quotas on a lousy product or be told what products they can sell to meet a product quota.

There are many well known and respected insurance carriers who employ captive agents. A few examples are: Allstate, State Farm, Nation Wide and Farmers.

Independent Agent/Broker: This type of insurance representative offers a wide variety of products from many different companies. Which in turn may give you more choices and savings because multiple options can be reviewed to find the right coverage and rates to fit your needs. An independent insurance representative is not employed by the insurance provider(s) (carriers). In most cases they are paid a commission on the policy/product sold to their clients.

Independent agents/brokers are generally viewed as representing you, the client, not an individual insurance carrier. Independent agents are free to look for what is the best product for their client, without restrictions from a captive company telling them what they can or cannot sell.

On the flip side of this – not all independent agents will be your “One Stop Shopping” for insurance needs. In some cases a captive agent will have better pricing and coverage depending on the risk involved in your situation and insurance needs. They may NOT be able to bundle your life, auto, home, boat and business insurance into one. Note: this is not always the case and some independent agents can do all this for you.

Some Independent insurance representatives specialize and cater to only one type of risk or line of business. For example Final Expense insurance is their specialty but they may shy away from other lines of insurance such as health, auto or commercial.

What should you do? As you can see there are pro’s and con’s to both types of insurance representatives. Not all Independent insurance representatives will offer all lines of insurance to their clients. Everyone’s insurance needs are unique. There is no right or wrong answer to who is the best insurance representative to go with simply because everyone’s needs are not the same.

When shopping for your insurance needs, you should get quotes and information from both captive and independent agents to see what kind of pricing, terms and service you will be receiving.

Generally speaking a well rounded independent agent will have more choices for you to choose from. But that may not work for your insurance needs if you are looking for one specific type of coverage. You may need to seek out the insurance agent who specializes in the coverage you are looking for. Do your homework before you make a decision.

Have a question? Feel free to contact me. (contact info. below)


ABOUT NORTH COAST LIFE INSURANCE
Established in 1965 in Spokane, WA. North Coast Life Insurance Company (NCL) is focused on providing solutions for you and those you love most. Receive genuine personal service and guidance on all your insurance needs.
Note: This blog is designed for general information purposes only. All information presented on this site should not be interpreted as legal advice and the author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information. For legal and tax advice contact your attorney or tax adviser.
Rita Sollie, Direct Insurance Representative with North Coast Life Insurance Company (NCL). Providing solutions for your financial needs. INSTANT Term-Life Quote: www.insureyourfamily.com
Prefer to speak with a local financial representative? Call or email your request and you will be connected with a representative in your area.
Contact info: Phone: 800.541.5858   Email: rita.sollie@nclife.com or Live Chat below.

Tips on How to Keep Those New Years Resolutions

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Posted on 26th December 2012 by Rita in Retirement and Estate Planning |TERM Life Insurance

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new years resolutions

With a New Year upon us… Many of us feel it’s the perfect time to reflect on the changes we need or want. The most popular category in the New Year’s resolution realm is fitness and a close second is getting finances in control. There or many apps now to help you with your new found Inspiration for self, family or community improvement.  These apps are Great, but really I believe the main action you need to do first.  Is to resolve to make a (more…)

What does Longer Life Expectancy Mean for You?

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Posted on 28th September 2012 by Rita in Annuities |Retirement and Estate Planning

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Technological and medical breakthroughs seem to be continually moving at a rapid pace today, when compared to 10 years ago. With all this new development, people are living healthier and longer. I recently saw a headline: “HIV -patients’ life expectancy rises” and read the article “How Long Do You Want to Live?” via: The New York Times – Sunday Review. Which re-enforces we are not only living longer but, also living longer and better with disease.

Many of us can expect to live to a ripe old age, what does this all mean for you personally in terms of retirement? Planning for this time of our lives has become increasingly important. The nest egg you may have stashed away for retirement years can fall short if it was not designed to last somewhere between (more…)

Do You Need a Beneficiary Review?

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Posted on 18th July 2012 by Rita in Retirement and Estate Planning

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Who will receive your assets at the time of your death? We’re talking life insurance, annuities, retirement plan accounts and other assets. Did you know that contracts left to deceased individuals or ex-spouses is one of the most common beneficiary mistakes made? Another important note is beneficiary designations trump a will.

Reviewing the beneficiaries on your contracts is your assurance that many of your assets will be (more…)

Is your Retirement Savings Hidden?

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Posted on 16th April 2012 by Rita in Annuities

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hide your money is it best?

Hidden away life savings… Where is your Retirement Money? Would you answer: Mattress, cookie jar, in a coffee can buried in the back yard… or would you say it’s in Investments, 401k and/or annuities.

No doubt there are many different possibilities an individual can utilize for saving money. Learning all your options before choosing an investment plan, usually is the smartest way to go about this task.

I wanted to share a story about an 80-year-old man who kept his life savings (more…)