Insurance Advisor vs. Agent vs. Broker: Understanding the Differences

Insurance Advisor vs. Agent vs. Broker

Insurance agents and Insurance brokers both have the same motive and that’s to protect you and your loved ones in times of need. In spite of having the same motive, there is a huge difference in how they carry out their functions. It is vital to understand the difference to decide what’s the best fit for you- an agent or a broker/advisor. 

An Insurance Agent mainly does the job of promoting and selling a company’s policy to you, but a broker helps you choose what works best for you as per your needs. So, the broker is more of a guide and the advisor is more of a salesperson. Insurance brokers are also known as Insurance advisors. 

  1. Representation

    An Insurance Agent works for a company and thus represents it. However, an Insurance Broker/Advisor is chosen by you, the buyer, so they will always represent you and not any of the company policies they present to you. 

  2. Working Style

    An Insurance agent works for the company, while a broker works independently. The broker/advisor happens to be their own boss. 

  3. Functions

    The biggest differentiation is in their function. The Insurance Agent will only present to you the policies of the company they represent and help you make a choice from those policies; thus, their function is not as broad and wide as that of the broker/advisor. The policies offered by different companies are something that the broker studies regularly. The broker/advisor, after an in-depth study, then presents their knowledge and analysis to their clients. 

  4. Knowledge

    An Insurance Agent will always have limited knowledge as compared to a broker/advisor. The advisor is expected to be competent and well-versed in all policies offered by the company he/she/they work for. However, a broker’s/advisor’s job is to help you, the client, to choose the policy that works best for you across various companies. 

  5. Training

    An Insurance Agent has to compulsorily attend several workshops and training sessions hosted by the company they work for. However, in the case of a broker/advisor, all the knowledge they possess comes from training themselves by reading or watching videos. 

  6. Income

    An Insurance Agent has a more stable and fixed income as they are employed by a company. The income of a broker/advisor is more dynamic and changes from time to time depending on the commissions he receives from his clients. 

  7. Disclosure

    An Insurance Agent is not answerable to their customer regarding their commission rates, which stay strictly confidential between the company and the insurance agent. However, a broker/advisor has to present his commission rates so that clients can pay them accordingly. 

  8. Bias

    The Insurance Agent will always have a bias towards the company they work for; while that’s not the case with a broker/advisor, their primary motive is to find something that fulfils your needs. 

  9. Types 

    A broker/advisor is usually retail or wholesale. A retail broker directly speaks to clients and deals in all types of insurance, while a wholesale broker provides insurance policies to insurance advisors or retail brokers.

    An Insurance agent can either be captive or independent, with a captive meaning working only for one company, while an independent agent could work for several companies. 

From the above points, you must have understood how distinguishable their operations are. An Insurance Agent is useful when you are already aware of the company you wish to purchase an insurance policy from, however, if you want to shop around and don’t have much time in hand, a broker comes in handy. Brokers will show you different policies and rates going on in the market currently.

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