Captive Agent Vs Independent Agent, Which Is The Right Path For Your Career?

As you embark on a new job in your life as an agent, there might be some questions regarding whether you should be independent or captive. These two kinds of agents differ in how they get clients. Independent agents generally generate their own leads, and work harder than captive agents. Captive agents are trained and given leads/clients to work with. It may seem tempting to become a captive agent because they are given the tools needed, but they make less commission than an independent agent.

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There is a difference between a captive agent and an independent agent. Do you want to generate your own leads, or work for a company that provides leads?

Captive Agents

As a captive agent, you sell the company’s insurance products, and are limited to one specific insurance carrier- the one that pays you. Leads are given to you, and unlike an independent agent, you do not have to take a risk of spending your own money to generate these leads. Your company will provide you with leads, so you get to benefit from their marketing department without searching for clients on your own.

You will either make a set salary, or work on salary plus commission as a captive agent.

The Pros:

  • Captive agents are provided with financial support to help get their business on the rise. 
  • You are provided with resources, and guided towards clients and referrals, product training, marketing and advertising tools.
  • You have a more reliable source of income pad from the company you work for.
  • More knowledge on the products you are selling.

    group of men and women in an office space.
    Captive agents are provided with resources and guided towards clients and referrals, product training, marketing and advertising tools.

The Cons

  • You are limited to the products you sell, whichever the company provides you to sell. 
  • You will have to meet a certain sales quota.
  • If your company stops selling certain lines or increases rates, then you can lose clients.

Independent Agents

Independent agents have no limitations as to what they can sell, and which companies they can work with. They can cross sell from other carriers, mixing and matching to create a custom plan for clients. This is an advantage over captive agents. Essentially, you are your own boss, and do not have to share your leads or sales with a company, which means more money in your wallet. However, the caveat is that you have to generate your own leads.  

dice that says "profit," "loss," and "risk"
Independent agents must start their own business with some risk and loss. But overall, they make a great profit working for themselves.

In order to get leads, you will have to invest your own money, which is always a risk. You will have to be motivated in order to be successful. You can work for an independent agency, or on your own, and will only be paid on commission.

Pros:

  • You make a higher percentage of commission than a captive agent.
  • More freedom than working under a company.
  • Ability to cross-sell insurance, and being independent from all carriers.

Cons:

  • You will pay for your own expenses to start your own business.
  • Only commission based, so there is no guarantee of an income.
  • No support, resources, or guidance from a company or other agents.
  • Build your own customer base/list.
  • Profits from sales are generally put back into the business for the first year—to help offset startup costs and lead generation.

Which Is Right For You?

When you take on the role of an insurance agent, there are different factors to consider on whether you should be an independent or captive agent. Do you feel like you are motivated enough to build your own business and create your own client base? Or do you want to work for a company that offers the resources you need and offers a salary? These are important questions that you need to think about before diving into the field. 

You can become your own boss and build a network, or you can work for someone and become a part of a network. Either way, there is success in both of these kinds of agents, it just depends on how much work you want to put in.

Lead Types

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