Insurance Update

Insurance agents and brokers are licensed insurance professionals who sell insurance products to consumers and businesses. Some insurance agents and brokers may also serve in a consulting capacity by helping clients develop and maintain a financial plan.

Agents and brokers often specialize in areas that include life and health insurance, property and casualty insurance and commercial products for businesses.

Benefits

Insurance agents and brokers assist consumers in the purchase of insurance products that include life, health and auto insurance. They also educate consumers about the sometimes complex nature of insurance policies and coverages. Agents and brokers serve in a consulting role to help consumers assess their insurance needs as their lives change.

Significance

A significant difference between insurance agents and brokers is that agents usually represent one company while brokers are licensed with a variety of carriers.

In essence, it could be said that the agent works for the insurance company while the broker works for the client. Because they represent several insurance companies, brokers are typically able to provide more options regarding price and coverages. However, since they deal with a variety of companies they may not be as well versed on individual products as an agent.

Education And Training

Most brokers and agents have at least some college training, many in a business or financial field, according to StateUniversity.com. All states require that brokers and agents become licensed, and each state has its own insurance department to oversee the licensing process. Different requirements need to be met to obtain a broker’s and agent’s license.

Considerations

For those considering becoming an insurance agent or broker, good people and communication skills are necessary. Agents and brokers earn the bulk of their income from commissions and bonuses, so they must feel comfortable working without a guaranteed income from a salary. Agents and brokers may have to work evenings and weekends to meet with clients when they are available.

Potential

Insurance brokers with one to four years of experience average from $35,018 to $52,147 in annual income, while those with 20 or more years of experience earn from $62,045 to $142,431, according to PayScale.com. Insurance agents earn from $25,245 and $39,149 in years one through four, and from $34,537 to $73,683 after 20 years.

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