If a Broker is Better than an Agent Why isn't my Agent a Broker?

Good question.  Let me answer that and in doing so I'll also explain the image above.  Your agent isn't a broker because at first they don't know any better and later it's too late.  Most people who enter the insurance industry do so by being hired by a large firm and they're hired as an "agent."  Agents, in most cases, are bound to sell only the products of the company they work for.  AND, if they can sell products of other companies they usually receive a lower commission or are otherwise provided with disincentives to sell other companies.

Once they figure out how the system works though it's too late.  Meaning when an agent/broker sells an insurance product they get paid not only up front, but each and every time you (the consumer) pays your premium.  But, if the agent leaves the insurance company to become a broker they usually give up all of the clients they've accumulated making it difficult to make the jump.  It's akin to starting over and nobody enjoys that.  Of course while they're at the insurance company their manager is candy coating everything because each time they sell a policy the manager gets paid as well, so it's in the best interest of the manager that the agent sell policies for the company they work for.

Ok, so the company has great ratings, has been around for 150 years, etc.. etc.. so why not just do business with them because the agent is knowledgable, likeable, etc.. In comes the chart above which was provided by one of the biggest, oldest insurance companies in North America. You can see that for this particular Term Life Insurance product it's ONLY competitive if you're 45-55 years old and in "great" health.  But, if you're 25-40 years old or 55-65 years old or not in "great" health which company do you think your agent is STILL going to show you?  The one that they get paid less on and doesn't provide their office space OR are they going to show you the same company?  Your broker SHOULD start at zero and search the market for you because as you can see NO company tries to be competitive for all ages and health categories.