Should You Choose a Captive or Independent Life Insurance Agent?
When you purchase life insurance, the most important thing to understand is that life insurance companies differ in such aspects as underwriting requirements, product offerings, premium rates and financial strength. Choosing the right agent for your particular situation is very important. If you are planning on using a dedicated agent, you will have a choice of using a captive agent or an independent agent.
A captive agent is one who works exclusively for one company. They usually have access to only the proprietary offerings of that particular company. An independent agent contracts with multiple insurance companies and has the ability to offer each company’s products. So which type of agent should you choose?
Benefits to Working With an Independent Agent
Underwriting Factors – There are many factors to consider when purchasing life insurance coverage. The first is your overall health rating which is determined by the insurer during the underwriting process. Some companies are more liberal than others when considering things like height/weight ratios, cholesterol levels, blood pressure levels and other health factors. For instance some companies may allow preferred best ratings with normal cholesterol or blood pressure levels that are being treated with medication while others will not. Insurers will also vary on how they will treat current or past ailments such as diabetes, asthma, cancers, anxiety and depression. With all of these different underwriting factors to consider, why would you limit yourself to working with an agent who represents only one company? A good independent agent will shop your policy to make sure that you will get the best policy based on your particular health situation.
Policy Features – Another factor to note is that not all life insurance policies have the same features. Some policies may have built in benefits that others only offer for additional premium. Some policies will have riders such as the Long Term Care Benefit Rider that other companies do not offer. This might be important to someone that wants a product that can provide more than just life insurance protection. As policies differ in features, companies will also differ in products offered. A good independent agent will be able to match the best policy product and features with your goals from a variety of insurers.
Cost Differences – Sometimes the main driver in a decision to buy life insurance is cost. You want to be able to get the coverage you need at a price you can afford, right? After all, you will most likely be paying premiums for 20 years or more. If there is a difference of $300 per year between two polices that offer the same benefits, it would add up to $6,000 in additional cost over 20 years! That being said, shopping the policy for the best value in terms of price, after taking the aforementioned factors into consideration, could lead to substantial savings over a period of 20 years or more.
Benefits of Using A Captive Agent – That is not to say that it never makes sense to work with a captive agent. You may be happy with the service that you are receiving form your agent who already services your other coverages such as homeowner’s and auto coverage. You might feel more comfortable keeping all of your coverage ”under one roof” so to speak. If you do prefer to use this strategy, make sure that the life insurance product your agent offers has everything you need to meet your coverage objectives. In other words, don’t commit for the sake of convenience.
Conclusion – Using an independent agent for your life insurance coverage will give you an opportunity to explore multiple options whether you are considering a term policy or permanent coverage. Simply give the agent as much information as you can about your health situation and your life insurance goals and let them go to work. A good independent agent will be able to give you several viable options to choose from based on policy features, underwriting standards and cost to meet your objectives.
About Us
Archstone Insurance Services, LLC is an independent agency that shops over 40 of the top life insurance carriers to provide huge savings on life insurance coverage for our clients. We are happy to answer any questions you might have about any of the insurance products we offer, your planning needs or your existing coverage. Feel free to call us directly at (888) 687-9444 or email us at info@archstoneagency.com. You can also visit our website atwww.archstoneinsurance.com.
