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Insurance Broker vs Agent: How They Differ and Which Is Best

March 13, 2023
Our goal is to educate and advise on life insurance options, so you can feel confident in making the right choice, whether that’s through Quotacy or somewhere else. To ensure we provide accurate and trustworthy information, our writers follow strict editorial standards.

Both insurance brokers and agents help individuals buy insurance. Either one can be an excellent choice. What’s best for you depends on your individual circumstances.

Brokers have relationships with many carriers, which means they can offer various options. They function independently, though. In fact, they have a duty to act on their client’s behalf, not the insurance company’s.

An agent works for one or more carriers. As a paid representative, it’s in their best interest, as well as their job description, to act in the carrier’s best interest.

In this post, you’ll learn the differences between an insurance broker vs agent and how to decide which is best for you.

What Is an Insurance Broker?

The technical definition of an insurance broker is an individual or entity who aids in negotiating insurance contracts for a party other than itself while not being a licensed agent for the insurance company in which the policy is placed.

In other words, a broker helps someone buy insurance but is not employed by the insurance company itself.

Who Does an Insurance Broker Represent?

When buying insurance, there are three main parties: the insurance company, the agent or broker, and the insured.

An insurance broker represents the insured, the person applying for insurance. So, if controversies occur between the insured (or the insured’s beneficiary) and the insurance company, the broker has a duty to the insured, not the insurance company.

Insurance Broker vs Insurance Company

An insurance company (a.k.a. an insurance carrier or insurer) creates insurance products and, in exchange for a fee, agrees to pay if an event named in the contract occurs.

An insurance broker is a licensed professional who helps individuals buy insurance. The broker is not obligated to any specific insurance companies and, therefore, can shop around to find the best option for their client’s needs.

What Is an Insurance Agent?

The technical definition of an agent is any individual or entity appointed by an insurance company to solicit applications on its behalf.

In other words, an agent represents one or several insurance companies and acts as a middleman helping someone buy insurance.

Who Does an Insurance Agent Represent?

When buying insurance, there are three main parties: the insurance company, the agent or broker, and the insured.

An insurance agent is a representative of the insurance company. So, if controversies occur between the insured (or the insured’s beneficiary) and the insurance company, the insurance agent has a duty to the insurance company.

Captive Agent vs Independent Agents

There are two different types of insurance agents: independent and captive.

  • Independent agents represent multiple insurance companies. They can offer a range of policies. They also have the authority to quote and issue policies for the companies they represent.
  • Captive agents work for one insurance company. They have fewer options, but they do have in-depth product and company knowledge.


See what you’d pay for life insurance

Comparison shop prices on custom coverage amounts from the nation’s top carriers with Quotacy.

Insurance Agent vs Broker: How Do They Compare?

Both brokers and agents are required to be licensed and have the appropriate training to help you obtain insurance. And while we’ve brushed on how they differ while explaining each one, let’s go over the key differences between insurance agents and brokers.

Who They Serve

Brokers and agents are held to a high standard and have a code of ethics to follow. They promise to act with integrity, dignity, and truthfulness and put their clients’ interests above their own. However, when it comes to fiduciary duty, brokers have a duty to their clients, while agents have a duty to the insurance company.

Agents present insurance options and explain them but leave the decision to clients.

Brokers educate clients, provide counsel on which policy will serve them best, and advocate to carriers on their behalf.

Ability to Shop & Compare Plans

Life insurance can be complicated. Agents and brokers can help simplify things and save you time. The options you have and how the process goes depend on whether you choose an agent or broker.

Captive Agent

  • Offer products from one carrier
  • Have comprehensive knowledge
  • Can issue coverage on behalf of the insurer

Independent Agent

  • More policies from multiple carriers available
  • Can accept payment and issue coverage


  • Help you compare policies from multiple insurance companies
  • Give unbiased advice to help you determine the best option
  • Not obligated to sell one policy over another

How They Make Money

Both agents and brokers sell insurance for a living. But how they make their money differs.

Captive Agent 

  • Salaried and employed full-time by the insurance company
  • May earn performance-based bonuses

Independent Agent 

  • Earns higher commissions than their captive counterparts
  • Responsible for all business expenses


  • Receives a commission from their client’s chosen carrier
  • Commissions are less than agents’
  • Some brokers charge clients a fee

You can ask for a compensation disclosure statement from your agent or broker.

Differences Between Insurance Agents and Brokers
  • Represents the insurance company
  • Fewer options
  • Authorized to bind coverage
  • Earn higher commission than brokers and may earn a salary and/or bonuses
  • Represents the client
  • Many different options
  • Not authorized to bind coverage
  • Earns a commission from the various insurers and may charge a broker fee to the client
h Note: Quotacy is an independent broker. As a company, we earn commissions from the insurance companies we work with. The agents we employ are not paid commissions. They earn a stable income and offer unbiased advice when helping you choose a life insurance policy. We do not charge any broker fees.

Which Is Right for You?

Agents and brokers are responsible for providing excellent service and offering products that meet their clients’ needs. Both understand how consequential life insurance coverage can be in protecting your loved ones.

What are your risk factors?

By risk factors, we’re referring to your health and aspects of your life that may increase your risk in the eyes of the life insurance company. Common examples include:

  • Diabetes
  • High blood pressure
  • Anxiety medication
  • DUI history
  • Dangerous hobbies

Few people know that insurance companies underwrite risk factors differently, which can significantly impact your price. The ability to compare different policies and shop around can save you money. Therefore, working with a broker is better if you have risk factors. The broker can review your application and circumstances to get you your best rate.

What are your insurance needs?

Working with an agent is better if you have specialized insurance needs or prefer to work with one carrier. They will have in-depth knowledge about the insurance company’s offerings and can start and complete the entire insurance purchase.

Choosing an Insurance Agent vs Broker
  • In-depth knowledge about company's products
  • Can bind coverage
  • Advice may be biased in their favor
  • Knows about a variety of carrier offerings
  • Can offer options from several different insurance carriers
  • Provides unbiased advice

Get a Life Insurance Quote Through an Online Broker Like Quotacy

Quotacy is an online life insurance broker. We do not charge any broker fees. We work with over 25 of the nation’s top life insurance companies and can help you find a policy that fits your needs and budget.

You can get instant term life insurance quotes online without giving any contact information away. When you’re ready to apply, completing the online application only takes a few minutes.

A dedicated agent, who does not work on commissions, will be assigned to you. They will review your application to ensure your chosen carrier is the best.

Want to know more about us? Learn what sets us apart: Why Choose Quotacy?

Watch the Broker vs Agent Video


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