What is a life insurance broker?

You’ve likely heard of a life insurance broker, but what exactly do they do? Basically, a broker streamlines the life insurance buying process by working with multiple insurance carriers to shop around and compare all of your options for coverage. A broker can also offer tips for buying life insurance and provide personalized guidance to help you find an affordable policy that’s right for your needs. However, there are certain pros, cons, and considerations to remember when deciding whether or not working with a life insurance broker is right for you. Read on to learn about life insurance brokers and their role in helping people find life insurance.

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Life Insurance Broker vs. Agent vs. Advisor

There are three main types of professionals who can help you when shopping for life insurance: a life insurance broker, a life insurance agent, and a life insurance advisor. While there are similarities between these roles, they differ in their objectives, affiliation, and how they’re compensated.

A life insurance agent represents one insurance company by selling the company’s products and services to consumers for a commission, while a broker represents the consumer, looking at multiple companies and coverage options to help them find the right policy for their needs and budget. An advisor can be either independent or affiliated with a company, and their aim is to help clients incorporate life insurance into a broader financial plan.

	Broker	Agent	Advisor
Role	To find the right policy for a client by comparing different plans and carriers	To sell policies on behalf of a company	To help clients integrate life insurance into their financial planning
Affiliation	Works independently and is not tied to a specific insurance company	Typically works for a specific life insurance company	Can be either independent or company-affiliated
Compensation	Typically earns commission from the life insurance companies they sell from	Earns commission from their life insurance company for the policies they sell	May charge fees for their service or may earn a commission for selling specific insurance products

Who needs a life insurance broker?

Whether or not working with a life insurance broker is right for you will depend on your unique circumstances. Some people prefer the support of a broker, while some prefer to navigate the process on their own. If you’re considering partnering with a broker to shop for life insurance, consider the following questions:

Is this your first time buying life insurance?
Do you have questions about the different types of policies and how they work?
Are you unsure about how much coverage you need or how long you’ll need coverage for?

If you answered “yes” to any of these questions, working with a broker may be beneficial. They can offer additional support by getting to know you, learning about your coverage needs, and answering your questions along the way.

What to Look For When Selecting a Life Insurance Broker

If you’re not sure what to look for when choosing a life insurance broker, consider the following factors:

Reputation: Seek a broker with extensive experience in the insurance industry, and check for positive client testimonials and high industry ratings.
Accreditation: Ensure the broker is licensed to operate in your state. Look for additional qualifications or certifications in financial planning or insurance.
Product Range: Look for access to a wide variety of insurance products from multiple providers.
Understanding of Your Needs: The broker should take time to get to know you and your coverage needs in order to find you the right policy.
Financial Stability: Ensure the broker works with reputable insurance companies with strong financial ratings.

Benefits of Working With a Life Insurance Broker

There are many decisions you’ll need to make when shopping for life insurance. First, you’ll need to decide whether to work with an insurance agent or a broker. There are many benefits that come from working with a life insurance broker, including:

Brokers are Independent: Since brokers aren’t tied to one specific insurance company, they typically won’t try to push you toward one carrier. Instead, they’ll take into consideration all of your options for coverage and help decide which is right for you.
Save Time and Money: Instead of finding quotes from multiple life insurance companies by yourself, a broker can quickly compare coverage and rates from multiple insurance companies.
Brokers are Your Advocate: Throughout the buying process and even after the policy goes into effect, a life insurance broker can serve as your advocate and resource. They can help you through the application process and answer any questions you may have, even after your policy is finalized.

Shopping Online vs. Traditional Broker

Buying life insurance online or through a traditional broker offers distinctly different experiences. Online purchasing provides convenience, allowing you to compare policies from multiple providers at your own pace, often with instant quotes and 24/7 accessibility. However, it’s difficult to get a completely accurate quote when shopping exclusively online, and the process can be confusing for people who are unfamiliar with the complexity of life insurance products.

In contrast, buying through a traditional broker offers personalized guidance and expert advice tailored to your specific needs. Brokers can explain insurance terminology, answer your questions in-depth, and potentially negotiate better rates or coverage options. They also provide ongoing support for policy management and claims.

The choice between online and traditional life insurance buying methods ultimately depends on your comfort level with insurance products, the complexity of your needs, and how much personalized assistance you desire in the decision-making process. Some companies, like SelectQuote, offer a hybrid shopping experience where you can go online to initiate the quote process and then receive follow-up support directly from a licensed insurance agent.

Is SelectQuote a life insurance brokerage?

SelectQuote is the oldest and largest independent direct-to-consumer term life insurance agency in the United States. In 1985, we developed an unbiased and pressure-free way to buy life insurance, and now we help consumers shop for not only life insurance but also home and auto insurance and Medicare insurance. With nearly 40 years of experience in the industry, we’ve helped millions of people find insurance coverage that meets their needs while staying within their budgets, and our proprietary technology helps us search policies from dozens of carriers in just minutes. And because SelectQuote works for you, not the insurance companies, you can feel confident that our agents have your best interests in mind.

Are life insurance brokers worth it?

Life insurance brokers can be worth it for many people, especially those who need expert guidance in choosing a policy, want to compare multiple policies from different providers, or have unique or complicated insurance needs.

Are there any disadvantages to using an insurance broker?

While brokers offer many benefits, they also have potential disadvantages, including limited carrier options, higher premiums due to commissions, and potential bias from the broker toward certain carriers or plans.

Can you buy life insurance without a broker?

Yes, you can buy life insurance without a broker. You can purchase a policy directly from insurance companies, through online comparison and purchasing platforms, through financial advisors or banks, or via workplace group life insurance plans.

Who pays an insurance broker?

This will vary by insurance broker. Most commonly, brokers are paid via commission from the insurance companies they represent. However, some brokers charge fees directly to clients, and some use a mix of commissions and fees. It's important to ask your broker about their compensation structure for transparency.

Shop Life Insurance Easily With the Help of SelectQuote

There are many decisions to make when shopping for life insurance, but SelectQuote can help you navigate them with ease. In just minutes, we can shop highly rated life insurance companies on your behalf, making the process quick, convenient, and hassle-free.