What’s the best way to purchase insurance these days?
If you go back in time to, let’s say, thirty or twenty years ago, you’d be hard-pressed to find insurance that’s not sold through an agent. But now, you can buy insurance direct by phone, mail, email, or online.
Looking at the popularity of online shopping in this day and age, everyone’s putting a premium on convenience. So it would appear that getting insurance straight from the company is the way to go.
Not quite.
The life insurance market has been cornered by insurance agents. In 2019, 53 percent of life insurance were sold by independents while 36 percent were from affiliated agents, for a combined 89 percent!
So what gives?
Let’s look at the pros and cons of buying insurance through an agent vs buying direct.
Why Buy Insurance Direct?
Foregoing an insurance agent and buying directly from the company can be a fast and easy way to get coverage. You can shop for online insurance with a few button pushes and do it anywhere and at any time.
Most insurance companies have online quoting capabilities. This means that you can get a quote and immediately click on the ‘purchase’ button if you’re inclined to. You only have to download your insurance ID card and policy booklet, and you’re all set.
It’s also possible to pay less for coverage. By buying direct, the company saves money by not having to pay a commission to an agent and that could mean paying a lower monthly premium.
Cons of Purchasing Directly From Providers
The main drawback of not using a personal insurance agent is that you’re on your own. How your insurance policy turns out rests solely on your shoulders.
If you need help during the quoting process, you have to rely on call center reps that are never the same person each time you call. It’s easy to end up with a policy that provides either too much or too little coverage.
Buying From an Insurance Agent Benefits
There are two types of insurance agents. The first one is independent agents who can shop for policies from different companies.
The other type is affiliated or captive agents who only sell insurance from one company. For example, if you talk to Tate Teveldal State Farm insurance agent, he’ll sell you insurance from State Farm.
Regardless of what type of agent you’re talking to, you have someone to guide you throughout the whole process.
If there are things you don’t understand, such as terms and conditions, there’s someone dependable to answer your questions. If you happen to work with a local agent, which is common, their knowledge of the area will be invaluable. They’ll make sure that you’re purchasing the right amount of coverage for your needs and the needs of your location.
Cons of Buying Through an Agent
One of the drawbacks of buying through an agent is availability. A mismatch of schedules can cause delays with the purchase.
You’re also limited to the insurance companies that the agent represents. You have to find another agent if you want a quote from a different company.
Agent or No Agent?
Whether to buy insurance direct or through an agent depends on your level of confidence. Buying directly is both a time and money saver if you’re confident in your insurance needs. But if the insurance process stresses you out, using an agent is probably the better route.
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