Comparing Insurance Agents to Insurance Brokers
Insurance plans, from health to auto, are most often sold to the public by insurance agents or insurance brokers. Both positions may have similar requirements and daily responsibilities. The main distinction between the two is that brokers explore plans from different insurance institutions and typically get paid by their clients for finding the insurance plan/s on their behalf, while agents may sell the plans of a single insurance company or work for various firms and these insurance companies give them a commission for every plan they sold.
|Job Title||Education Requirements||Median Salary||Job Growth (2016-2026)*|
|Insurance Agent||High School Diploma; State License||$49,710 (2017)*||10%|
|Insurance Brokers||High School Diploma; State License; may need to be authorized by the Financial Industry Regulatory Authority||$59,981 (2018)**||10% (for all insurance sales agents)|
Source: *U.S. Bureau of Labor Statistics, **PayScale.com
Responsibilities of Insurance Agents vs. Insurance Brokers
Insurance agents and insurance brokers, as their titles suggest, do have quite similar responsibilities. They are both in the business of finding insurance plans that best meet the needs of the people they work with. Both network, market themselves, and build a database of clients. The primary difference is in who they work for. While agents may work directly for a specific insurance company or various firms, brokers represent clients when finding insurance plans and usually get paid through the fees they charge their customers.
Insurance agents are sales people that reach out to potential clients in an effort to match them with the insurance plans that will suit them best. They may do this by advertising or cold calling to new clients, getting referrals, or by offering additional services to those they have already worked with. The types of insurance plans they may sell include health, auto, life, and property. Insurance agents generally work in an office setting, either directly for an insurance company, or for a brokerage firm. Insurance agents need to obtain a high school diploma and the proper license from the state in which they work.
Job responsibilities of an insurance agent include:
- Maintain a database of current clients
- Match clients' needs and financial situation to the plans that fit them best
- Grow business through online and in-person marketing
- Keep clients content by handling paperwork, record keeping, and renewals
Insurance brokers either work for themselves or for large brokerage firms, as they compare and contrast plans from different insurance companies to fit their clients' needs. Brokers also handle various kinds of insurance, such as health and auto, and may work with clients directly in-person, or remotely, over the phone or online. The ultimate goal of the broker is to find the plan/s which will best suit their customers, so they work for their clients and not for the insurance company selling the plan. Brokers inform their clients of the fees they charge and/or may receive for each insurance plan they find and sell. Brokers may work from home or in an office, and must pass local licensing courses. In some cases, brokers may need to be authorized by the Financial Industry Regulatory Authority.
Job responsibilities of an insurance broker include:
- Clearly explain to clients the nuance of complicated insurance plans
- Bundle differing plans to pass along discounts
- Maintain open communication with clients
- Obtain inspection reports, photos, and other necessary paperwork
The insurance industry offers a plethora of jobs options for those that are interested in the field. A good entry into the world of medical insurance is the position of insurance coder. If you'd like to work more directly with insurance companies, as agents and brokers do, you may want to explore becoming an insurance underwriter.