Do You Really Need Insurance Agent?
Shopping for insurance quotes and buying insurance online is so simple, you might wonder why you would ever need an insurance agent. After all, when you shop for insurance online, you can compare lots of policies quickly in your PJs at 2 a.m. We’re all for that, but insurance agents do a lot more than sell policies and if you ever have a complicated claim or a question about your coverage you need answered fast, you’ll be happy you established a relationship with an agent early in the game.
Insurance Agent Types: Captive vs. Independent Agent
Insurance agents, who are also called producers within the industry, fall into two basic categories. They’re either captive agents who work for one company and can only sell that insurer’s products; or they’re independent agents who sell products from a variety of different insurance companies, and can help you compare different policy features and benefits. The insurance products they sell fall into two basic categories: life and health; and property and casualty.
What Does Insurance Agent Do?
Regardless of their status, all insurance agents involved in the solicitation, selling or negotiation of insurance must be licensed by the state where they sell insurance. The licensing process varies from state to state, but generally requires the prospective agent to complete some insurance-related coursework covering insurance fundamentals and the state-specific insurance laws, and then pass a state exam. If an agent sells both life and health insurance and property and casualty insurance, he or she will need a separate license for each category. Most state insurance commissions also mandate continuing education every two years to keep agents up to date. The coursework focuses on insurance law, consumer protection, ethics and technical aspects affecting various types of policies.
Some insurance agents are also qualified to sell comprehensive financial planning services such as mutual funds, annuities and retirement vehicles. This requires additional study, examinations, licensing and certification.
In addition to soliciting business, insurance agents are expected to prepare reports, maintain accurate records and, of course, help you settle your insurance claims. They can help you save money by showing how to bundle policies and take advantage of available discounts. And they provide you with unlimited professional advice and services for free, because they’re paid by your policy’s insurance carrier.
As licensed professionals, insurance agents must meet their state insurance commission’s standards and face suspension or loss or license, fines and even imprisonment for failure to adhere to legal and ethical