Who to work for (differences): Captive vs. non-captive life insurance companies


Whether you need home, auto or business insurance, you normally deal with an agent who can help you find coverage that meets your needs. Agents are frequently used to sell life insurance. When it comes to distribution models, captive and non-captive agents are the two main categories.

There is no right or wrong strategy because each model has advantages and certain difficulties. Understanding both models will help you decide which one is right for you. We’ll outline the main distinctions in this article and help you select the right life insurance agent for your needs.

Difference Between Captive and Non-Captive Life Insurance Agents

So how do non-captive and captive insurance agents differ from each other? Captive insurance agents, in essence, are employed by a single insurance provider and are limited to selling that provider’s policies. Non-captive agents, on the other hand, have agreements with many insurers through which they can offer products.

Captive Life Agents

An agent who generally works for only one life insurance company is called a captive agent. Products and services are only available from the represented carrier. Because captive agents receive a commission for each won transaction, customer satisfaction is critical to their business. Some advantages of captive agents are:

  • Limited product alternatives limit customer options.
  • Failure to match a client with the optimal standards or underwriting program for that client’s particular risk profile
  • Whether they’re outdated or not, you’re stuck using carrier-provided systems.
  • It is difficult to serve customers who have policies from several different companies.
  • Customers’ opinions of the carrier could taint their opinion of you.
  • May limit expansion potential
  • You lose your renewal income if you leave to become self-employed.

Non-captive life insurance agents

A representative of the goods and services of various carriers is a non-captive agent. The most common way to access carriers is through an insurance marketing organization (IMO), which aggregates agent production to meet minimum contract requirements, increase commission payouts, or negotiate support agreements specials. Access to carriers can also be obtained directly through a contract with a company. Here are some advantages of non-captive agents:

  • The carriers and commodities you choose to represent are up to you.
  • Access to any commonly offered product that a customer might need or want
  • Ability to relate carrier specialties or processes to customer underwriting risk profile
  • Ability to take advantage of underwriting competition to improve client outcomes
  • Possibility of receiving higher commissions
  • The ability to access new markets
  • The choice to select the systems and practices best suited to your requests
  • For better or for worse, you are responsible.

Which one to choose ?

In general, there is not a single best insurance agent. Whether you decide to work with a captive or independent agents is up to you.

The fundamental benefit of working with a captive life insurance agent is that since they only represent one insurer, they have a deep understanding of that insurer’s technology and policies. However, since the insurance company often charges additional fees, being a captive agent may be more expensive or come at the cost of low commissions.

Working with a non-captive life insurance agent will give you more options and a wider price range. However, non-captive agents are familiar with the different carriers, while captives are limited to just one. Also, non-captive agents usually charge less because no company supports them.


1. Should I select a captive agent or a non-captive agent for my insurance needs?

You may select a non-captive company instead of a captive agent for a few key reasons. The first is the price; hiring a free agent will cost less than hiring a captive agent. Second, independent or non-captive brokers have more plans to choose from, giving you more options and a wider price range.

2. What types of insurance are sold by captive and non-captive agents?

Independent or captive agents can sell any insurance. Others prefer to specialize in certain areas, such as life insurance and home insurance, while others want to sell all products offered by an insurer.

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