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Health Insurance Agents vs Brokers

A health insurance agent or broker can be a great help when you are shopping for health insurance. There are a couple of things to know about agents verses brokers that will help you find the professional who is going to best meet your needs. Technically, all of these professionals are licensed health insurance agents. To simplify the terminology, see the definitions below.

Agent

A health insurance agent is a salesperson licensed by the state and represents one or more health insurance companies. They offer insurance plans to consumers for whom they are appointed. An agent cannot charge you a fee for assisting you with your individual or family plan.  An agent can be a captive agent or an independent agent. Each one has unique qualities that can benefit different situations.

Captive Agent

A captive agent represents only one carrier. This means that they work exclusively for one insurance company. Some insurance companies only use captive agents to sell their products. They are paid either a salary with commissions or commissions only. They may be employees or independent contractors of the insurance company. A captive agent represents the insurance company and not the applicant. If you have decided to go with a specific insurance company, then then a captive agent’s in-depth knowledge of that company’s products would be valuable.

Independent Agent

Independent agents offer more than one insurance carrier. Insurance companies pay commissions to independent agents for products they sell. Agents are not employees of the insurance carrier and represent the applicant and not the insurance company. They provide a wider range of insurance products from various companies giving you more options to find the best plan for your budget. 

Broker

A broker has a broker’s license and commonly an agent’s license also. Brokers are independent insurance agents who offer multiple insurance carriers’ products and are paid by commissions. They are not employees of the insurance carrier, but represent their clients. They often have their own employees that are insurance agents who help increase their business. Brokers typically offer other types of insurance such as auto, home or life insurance. This can be an added benefit. Brokers also provide services for employers looking for group insurance, and in this capacity may be allowed to charge a fee for their services.