How do life insurance agents get paid, and does using one cost me more?
Answered by 4 licensed agents
Agents are paid by the insurance company. You need to use an agent to purchase insurance. You want to work with an insurance broker. A broker will represent many different companies and be able to find a policy that fits best for you.
Life insurance agents typically earn commissions paid by the insurance carrier out of your premiums, rather than charging you a separate fee directly. Because these commissions are built into the insurer's standard pricing, buying through an agent generally doesn't cost you more than buying the same policy on your own, and a good agent can actually help you avoid overpaying by comparing options across multiple carriers.
Life insurance agents are paid via commissions built directly into the policy's premium, meaning using an agent does not cost you any extra money. Insurance rates are heavily regulated and filed with state insurance departments. The price of a specific policy is legally required to be exactly the same whether you buy it through an agent, a broker, or directly from the insurance company's website.
Life insurance agents are paid from the insurance company and not directly from the client. In most cases it does not cost you more to use an agent instead of buying direct. All premiums must be approved by the state insurance commissioners so you would be paying the same if you use an agent. An agent can actually save you money because most will do a fact finder and find out what type of insurance is right for you as well as how much coverage to purchase. They can also be your ally if you have some health issues and be able to work with the underwriter to get you the best premium.
