What is the Difference Between a Captive and an Independent Insurance Agent?

Published on June 21, 2021

Seniors are a vital part of the insurance market for captive and independent insurance agents.

Seniors are an essential part of the target market for captive and independent insurance agents. Many seniors are looking to purchase or renew their auto insurance, protect their retirement plans, and much more; their insurance options should not decrease because of their age. If you are an insurance agent, you play an essential role in providing seniors with the insurance protection they need.

Whether you are a new agent looking to break into the industry or an experienced agent seeking to branch out, selling to senior citizens can be a fulfilling part of your insurance career at any stage. Helping a senior find the right insurance policies to meet their needs is possible no matter where you live and work.

Insurance agents often specialize in selling specific insurance policies, such as life insurance or auto insurance. There is also another distinction that can be made, which is the difference between captive and independent insurance agents. Both play vital roles in offering the right insurance options to senior citizens.

Captive Insurance Agents

Captive insurance agents are insurance agents that work for a specific company. Captive insurance agents sell insurance policies that are from the company they work for. These insurance agents may work in their company’s office location in their area. When potential customers call an insurance company to get more information about a policy, that company may contract with captive insurance agents to answer customer questions.
Captive agents can be given support by the insurance company that employs them through training, administrative support, and other benefits.

Independent Insurance Agents

Independent insurance agents do not work with a specific insurance company. This kind of insurance agent can sell their clients policies from different insurance companies. As independent contractors, independent insurance agents may work with multiple insurance companies to sell various insurance policies or lines of insurance. Independent insurance agents often work non-exclusively, leaving them able to offer clients a wide range of coverage options.

Independent agents lack some of the support that captive agents receive from their employers. They may not be able to sell policies from insurance companies that rely on captive agents. However, they have flexibility based on their business model and are highly trained experts on insurance policies.

Captive vs. Independent Insurance Agents

In addition to the differences in how captive and independent insurance agents operate to sell insurance policies, there are also differences in how they are compensated. Exclusive or captive, insurance agents may make lower commission rates than independent insurance agents; however, their overhead costs are often absorbed by their employer, and they are paid a salary on top of their commissions.

Independent insurance agents often receive a higher portion of their commission but often operate like a small business. They are responsible for their overhead costs and costs associated with being an independent operator.

Being an independent insurance agent has the potential for high payoffs, but the stability of a career as a captive insurance agent is what attracts many people to those jobs. Some independent insurance agents form agencies with other independent agents to absorb some of the operating costs together.

Insurance for Senior Citizens

Both independent and captive insurance agents have a role to play in selling insurance policies to senior citizens. Seniors are a valuable audience for insurance agents, and both independent and captive insurance agents can benefit these clients. Some seniors may rely on name recognition to purchase insurance from an insurance company they trust, while others appreciate an agent who can walk them through multiple policy options.

A hybrid business model – because a custom solution fits better

American Senior Benefits operates a hybrid business model — combining the best aspects of independent and career insurance agencies — so affiliated agents are provided with the very best training, product portfolio and company support.

They never need to provide customers with a “one size fits all” solution. It’s a model that has created a culture of teamwork, innovation and a shared drive for success, all centered around the client’s needs and satisfaction.

Contact Us

To learn more about the opportunity to serve the senior market, contact the experts at American Senior Benefits. Our experts will be happy to answer any questions you have about this unique and fulfilling opportunity.

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