What is a life insurance agent?

Life insurance can be a confusing topic. You may have questions about what type of life insurance to buy, how much coverage you need, or what you might expect to pay. Or, you may be wondering if you need a policy at all.

An experienced life insurance agent can answer all these questions and more. But what is a life insurance agent, exactly? This article can help you understand:

• What a life insurance agent does

• Whether or not you need a life insurance agent

• How an agent’s guidance can help you

• What kind of questions they can help answer for you

• How to go about finding a good agent

What life insurance agents do

just decide to sell life insurance: they must be licensed by their state insurance commission. The licensing process varies somewhat by state but typically involves several weeks of study, passing a detailed licensing exam, and a background check, which may include fingerprinting.

Generally speaking, agents work with people to match them to appropriate coverage for their needs and budgets. When you work with a life insurance agent, that might entail any or all of the following:

• Working with you to understand your financial situation, your needs, and your budget

• Explaining the differences between whole life and term life insurance

• Helping you compare policies, rates and coverage

• Walking you through the actual application process and any necessary paperwork

• Assisting with policy changes, renewals, claims and so on over time

These agents generally represent one or more specific insurance companies, and exclusively sell policies from those particular companies. Many are "captive agents," meaning they represent only one life insurance company and can only sell products from that specific company. Some may specifically focus on life insurance, but others also sell additional types of insurance, such as business or automotive insurance coverage. With additional licensing, they may also offer other financial products, such as annuities, bonds, or securities.

Because licensing for insurance sales is on a state-level basis, most agents work only in one or two states, even if they primarily interact with clients remotely and online.

How are life insurance agents paid?

Many agents are paid primarily based on commissions. When they sell a policy, they earn a percentage of its premium. Often, they receive the highest commission for the first year of the policy, then a smaller commission on an ongoing basis.

This commission is paid by the insurance company, to the agent. Generally, there is no upfront cost to the consumer to consult with a life insurance agent. However, sometimes the monthly premiums offered by agents could be higher than what you might get directly from an insurance company.

In some cases, you can save money by getting a life insurance quote online directly from an insurer. However, keep in mind that the benefit of using an agent is that they can help answer questions and find the best policy for you. If you’re unsure of your needs, it is often worth the extra potential expense of working with an agent.

The difference between an agent and an insurance broker

Both agents and brokers sell insurance policies. The main difference is that insurance agents are generally affiliated with one company (or sometimes a few), and they represent those companies in selling policies. Life insurance brokers, on the other hand, are independent and can help you shop with a wide variety of life insurance companies.

If you already have an idea of what insurance company you want to use, finding an insurance agent that represents that company could work well. If you want the most options possible, insurance brokers may have access to a wider variety of policies.

Do I need a life insurance agent?

You can generally buy life insurance on your own, without an agent. However, it’s often helpful to have an agent to help walk you through the process and explain your options — particularly if you’re not very familiar with insurance products.

Life insurance agents can help you navigate the process, pick out the right plan for your needs, and answer any questions you may have. So, while you don't technically need an agent, having one can certainly be helpful.

Life insurance can be complex. Agents, in particular, are highly experienced with all the details of the policies they sell. In fact, since most agents work for a specific insurance company, they are often highly knowledgeable about that particular company's plans.

Remember, one of the main services life insurance agents offer is providing their knowledge and answering questions. Yes, they can prepare quotes and evaluate different options — but many clients get the most value from sitting down with an agent at an in-person visit to have all their questions answered.

On the other hand, if you are knowledgeable about life insurance and already have an idea of how much coverage you want (and what type), you don’t necessarily need to work with an agent. You can buy life insurance online directly from an insurance company.

How to find an agent

You want to choose a reliable, trustworthy insurance agent that has your interests in mind. Here are a few ways to go about finding the right agent for you:

Referrals from friends and family

Speak with your friends, family and coworkers about your interest in life insurance. Find out if anybody has worked with an agent directly, and if they had a good experience. Be sure to mention your friend's name if you do work with their agent — the agent will likely appreciate the referral.

Existing insurance agents

You may already have an insurance agent — for instance, for your automotive insurance policy. In some cases, these agents can also sell life insurance products from the company they represent. If you already have a relationship with an agent, this can be an easy option — and in some cases can save you money via a multi-policy discount.

Online resources and reviews

A number of online sources can help you locate experienced professionals in your area who can help you navigate life insurance. If you're set on finding a local agent, you can also search "life insurance agent" on a map app from your smartphone, then read customer reviews of some of the top options to find a reputable agent.

State-level insurance commissioner resources

As we’ve noted, agents who sell insurance are generally required to be licensed in the state(s) they operate in. Many states maintain an online directory of licensed agents, along with contact information for each. For example, Washington State has an online directory where you can search by agent name, run by the Office of the Insurance Commissioner.

Guardian can help

Want to talk things over with a licensed life insurance agent? Guardian can connect you with a financial professional who will listen to your needs, discuss the types of life insurance policies available, and help you make the right decision for your situation and budget.