Should I Be A Captive or Non Captive Agent

When you enter into the Insurance sales field you have to ask yourself this question at some time in your career; should I be a captive or non- captive agent?

A captive agent is one who works for one company and agrees to only sell their products. A non captive agent can represent more than one company and offer a variety of products. There are agents who have experienced success using both methods. You have to decide for yourself which direction you want to take your business in.

A captive agent will sign on with a company, go through their training and become proficient in selling their products. Many times captive companies focus on a particular niche in the marketplace although they may have a menu of products customers can choose from. Some of these companies even offer their agents a beginning salary or guarantee to get them going in the Insurance field.

There are advantages to the captive agent. You get to focus on and become very proficient with how your company works. You tend to work with the same support staff, underwriters and agents. You have a manager you report to. Many times you even have regular hours to go into the office each week.

Disadvantages include; you have to focus only on your company’s products. If your company doesn’t offer universal life products, you can’t sell them. It’s very hard as a captive agent to deal with every client you come across because you are limited in your product offerings. It’s like being in the restaurant business; nobody goes to Kentucky Fried Chicken for tacos. Managers can sometimes forget that you are not really employees but independent contractors and make requirements of you that only a W-2 employee has to follow. Finally, your commissions may be less in a captive contract.

There are advantages to being a non captive agent. You get to create your own menu of products you want to offer to your clients. You can get larger shares of the commissions because you are not a real expense to the insurance company. They can afford to give you more because you only make money when you send them business. You can determine which clients in the marketplace you want to focus on and contract with those companies to offer their products. You don’t have expected office hours.

Disadvantages include; you don’t have a manager to support you in your business. Many times you will feel you are on your own and you would be right. You may not have the proper contracts in place to service your clients or you may have the wrong contracts (products you don’t sell anyway).

It will all depend on how you want to structure your business. Either option of captive or non captive can work.

Find out what fits best for you.