Types of Life Insurance Companies

Not all insurance companies are created equally. In fact, not all of them even operate the same way. In general, there are two types of life insurance companies: stock held companies and mutual companies.

Stock Held Life Insurance Company

If a company has gone public, it is a stock held company. The profits generated by these go back to their stockholders, not policy-holders. These companies are traded on a stock exchange, so anyone with the money can become a part owner.

Mutual Life Insurance Company

Mutual companies are different because they do not have obligations to stockholders. Instead, these companies are owned by those who purchase products from the company. Rather than profit going to shareholders, it often falls to the consumer. You are much more likely to see captive agents at mutual companies, only offering their companies’ products.

Types of Life Insurance Agents

In addition to knowing what type of company is representing you, it’s important to know the limitations of your insurance agent. Although life insurance agents are all here to give their customer the best product, some have more options than others. This is because some insurance agents are considered captive agents, while others are independent agents.

Captive agents

Captive agents are employed directly by the company whose product they are selling. Although not always true, they more often than not must only sell their company’s insurance.  You’ll find many captive insurance agents will partner with independent insurance agents when their products aren’t a fit.

Independent agents

Independent insurance agents like those here at PolicyZip, aren’t limited to the offerings of just one company. In fact, these agents can often look at policies from dozens of potential carriers to compare rates and plans for their customer. This is where you’ll hear the term “shop your rate” as an independent agent can shop the different companies for you. While captive agents may be able to present several options in the form of different, an independent agent can multiply those options, including additional carriers and finding you the best plan.

Understanding the type of insurance agent that is representing you can be crucial to finding you the best plan. For some, captive agents prove advantageous, but always be aware that you could be missing out on a lower rate.

Knowing both the type of insurance agent and the type of company is vital to understanding your policy offerings. Still not sure which company is right for you? Talk with an agent here at PolicyZip or discover the Top Life Insurance Companies: 2018.