Life insurance agents may compare quotes from different companies to get the best price for their clients, but it depends on who the agent is and where they work. They are also not always allowed to shop for the best price for every type of life insurance product. They are usually bound to only sell permanent life insurance that is underwritten by the life insurance agency that they work for. An independent agent has much more flexibility than a career agent at a major brokerage. Every agent must be licensed in the state that they are doing business and registered with the life insurance company that they are selling.
The agent who is most likely to shop for the best deal is the independent agent shopping for a term life policy. Here are a few typical types of life insurance agents and financial advisers who may sell life insurance with a description of when they are likely to compare quotes from multiple companies.
Types Of Agents
Career Agent At Major Firm
The most common type of life insurance agent that people deal with is the career agent for a major brokerage. This is the type of agent or financial adviser who works for a major life insurance company such as Metlife, New York Life, Northwestern Mutual, Genworth, or Prudential. These advisers may have the ability to compare prices on term life insurance from other companies, but they are discouraged from doing this by making less commission. Major brokerages require agents to sell a certain amount of life insurance every year, and if they sell more policies from their own company they may get paid higher rates as they attain certain levels. There is usually a lot of internal pressure to sell policies from their own company. They may not be allowed to sell whole life insurance from another company at all.
As mentioned above, the agent must be registered (appointed) with each life insurance company in order to sell that companies’ policy. This is a bit of a process and they may not want to take time to seek appointment and do the appointment paperwork for a lot of other companies.
If the agent is offering to compare term life insurance quotes for the client, they may find a good deal. They probably will not compare quotes from a lot of companies though, only the select few that they are already appointed with. Major life insurance companies do not allow agents from other brokerages to sell their whole life insurance products.
The independent life insurance agent is not a career agent for any specific company and has a bit more freedom in which company they sell from. They still need to get appointed with each individual company, and can not necessarily obtain the rights to sell all products from every company. These agents may be willing to offer a limited comparison for clients, but at the end of the day, they still are incentivized to sell the product which will yield them the highest commission rate.
There also is the issue of the quality of independent life insurance agents. If they are not attached to a major company, it can be difficult to assess the level of service that they will give their clients. Clients also must be careful to choose an agent who is knowledgeable and an expert in their field. We recommend to our clients that they look for signs of expertise such as a CLU designation.
Wealth Managers Who Also Sell Life Insurance As Part Of A Comprehensive Financial Solution
The third group of life insurance salesmen is the wealth manager or financial advisor. These advisors usually deal with a premium clientele who also have investments managed by them, but they are more likely to have advanced degrees and certifications. This type of agent usually does comprehensive financial planning as a part of their due diligence on their clients. During the process of designing a financial plan, they will usually identify a need for life insurance. They will either sell the life insurance themselves or split the commission with another agent who specializes in writing life insurance cases to who they will refer the client.
Because of the trust that most clients confer in wealth managers, they can usually exercise enormous latitude with regard to price. This means that the advisor will not normally compare quotes at all, but will present their own company’s products. This does not necessarily mean that the client is getting a bad product, but it may also mean that they are paying more than they need to. Wealth managers are excellent at accurately identifying the life insurance needs of clients, but they usually have little time or interest in finding the cheapest solution for the client.
Quote Comparison at Life Ant
At Life Ant, our agents are not paid by commission. This aligns our interests directly with our clients in finding the least expensive life insurance from the highest-rated companies. We do this by comparing quotes from many different life insurance companies.
It may be worth it to compare quotes with us even if you are working with an agent already. By comparing quotes you can get an idea of the general market prices for however much life insurance you are seeking. We want our clients to be informed, and we are not worried about sharing prices with them. To compare quotes for yourself, enter your zip code above.