What is the Difference between an Insurance Agent and a Producer?

April 15, 2022

A profession as an insurance agent and producer may offer great growth potential. Embarking in a career in insurance is also a great way to make a career change or get started in finance. The purpose of this article is to explain how insurance agents and producers operate in the insurance industry.

How do Insurance Agents Differ from Producers?
Both insurance producers and agents are contracted with an insurance company to sell its products to clients. There is no difference between an insurance producer and an agent. When selling insurance for a company or multiple carriers, both terms are used interchangeably.¹ The term "insurance agent" is the term heard most often, but "insurance producer" is often the official title associated with licensing. Their responsibilities remain the same. The difference lies in the types of insurance agents.
 

"Embarking in a career in insurance is also a great way to make a career change or get started in finance."

What is a Captive Agent?
Captive agents represent a single insurance provider. However, it is more likely you will hear the term “local agents” in everyday language. Captive agents are paid a combination of payments, commissions, and benefits by a single company.² Because captive agents work exclusively for a single company, they can only provide quotes on coverage from their company and are unable to provide quotes from other companies. Nevertheless, captive agents typically know precisely what their insurance coverage can and cannot provide, so they can help ensure it’s the right coverage for your needs.³
 
What is an Independent insurance Agent?
An independent insurance agent sells coverage from several different insurance companies. Independent insurance agents act as middlemen between insurance buyers and sellers in order to facilitate transactions.⁴  Independent insurance agents receive commissions for the policies that they sell.
 
What is an Online insurance Agent?
From a video visit with your doctor to ordering groceries in a mobile application, everything seems to be available online these days.⁵ Insurance can be purchased the same way; in fact, many insurance companies offer services online and through mobile applications. It is no longer necessary for many customers to speak to an agent in person. Becoming an insurance Agent/Producer
To become an insurance agent or producer, you may need to study, complete state-mandated course hours, and pass one or more licensing exams, depending on the types of insurance you want to sell or states that you want to sell in. Some states require pre-licensing education courses that are designed to help you pass the licensing exam. A license enables you to offer various forms of insurance and plans in various states. This profession may allow you to find the opportunity to grow your income, freedom, and flexibility.
 
Source:

1. kaplanfinancial.com, What Is an Insurance Producer?, accessed April 2022
2. investopedia.com, Captive Agent, accessed April 2022
3. thebalance.com, What Is a Captive Insurance Agent?, accessed April 2022
4. investopedia.com ,  Independent Agent, accessed May 2022
5. investopedia.com, Best Digital Insurance Providers, accessed May 2022