Independent Life Insurance Brokers Wage War on Life & Health Insurance Providers Reign

Over a century, life and health insurance companies held their brokers and agents in golden chains. These insurance companies kept independent life insurance brokers in a bind, enslaving them in giant Jell-O molds. Independent brokers were limited in their prospecting, selling skills, client choice, and income.

Finally, independent life insurance brokers have chosen to challenge the insurance companies. They want independence and run their sales like their business, not like the company. Talented insurance agents quickly realize that their insurance provider requires them and they must offer more to keep the producer. A life or health insurance broker who is observant will have access to over 600 insurance companies that can help him/her find the right combination.

Agents must overcome many obstacles posed by insurance companies. Agent manpower is often lost in the process. An increasing number of agents are seeing the brighter side to their future if they take control of their own destiny. These independent agents are heroes to others who haven’t yet mastered selling skills or the self-determination required to join them. Below are some facts about how the selling industry has changed.

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You would be tempted to believe that insurance is a lucrative field if you were to read major insurance company advertisements. You quickly become an encyclopedia by learning all the information available, as well as constantly changing disclosures and sales regulations. Two reasons insurance companies are so dominant. They write over 60% of premiums internally, while appointed agents and independent broker bring in the rest. An agent who is younger convinces his client that he should invest his $4,000 savings in an annuity. The annuity sales are paid $200 and 5% respectively to the agent. Instead, if the broker had written a $50.00 monthly policy of life insurance, the provider would have received approximately $400.00.

A broker will write the coverage that’s profitable for both the company and him before a policy is ever written. A producer’s half-life can be lost by not listening to their training of health and life insurance providers.

Since 2000, the major shift in power has been from company-appointed agents to independent brokers in life insurance. These distribution percentages were revealed for the individual life market share. 48% were appointed by Career Company agents. 48% were also written by independent life insurance agents. The balance was mainly taken by stockbrokers.

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Insurance companies tried to drive most agents out of business, particularly independent ones that commanded higher commissions. The profits would be 100% for the home office. They believed they could win with internet advertising, phone telemarketing and direct mail bypassing agents. The whip fell after millions and millions of dollars were spent trying to sell insurance without large numbers of agents. They were beaten with a stern reminder that insurance is a product that fills emotion needs and must be sold by humans. The robot-cut out-the-middleman approach was a disastrous failure.


Providers of life and health insurance companies learned the hard way that they could get business by using television, internet and direct mail advertising to try to get customers to buy. Although they did save a few commissions, their overhead was dominated by less healthy applicants, less claims communication and fewer loyal clients. When their company wants to sell insurance without them, career agents get mad. Agents who sell life insurance are not housed so they get higher commissions.

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It was clearer. Or, you could lose market share if you cater heavier to independent agents. The big shift has been in place since 2007. Sideline marketing efforts were not creating new marketing trends. Career insurance companies also saw fewer sales from their agents. The combined life insurance sales of captive, exclusive and multi-line agents dropped from 48% to 35% in 1999. The independent agents who were more skilled and better paid, now writing close to 58%, have been a great success. Further reducing career agent sales, banks and stockbrokers still hold 8% of the market.

This is what you would see if there were no insurance agents to help you sell your policies. The percentage of home offices that write life, health, retirement, group and medical policies is less than 30%. There is a second step to this ladder. At higher commissions, the first step was taken by captive career life insurers who offered similar products to independent brokers. Independent insurance companies that specialize in niches of smaller products quickly overtook this. Why not pay everyone equally? Let the career agency train them and then let the producer take control and teach how to sell.

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Life and health insurance companies would be better off if they could swap the words “greed” with “need”. It’s a known fact that only 2/3 of Americans have enough life insurance. Companies tend to put the focus on the rich, and most companies do this by bending their agents’ necks. Liberty National is a company you may not be aware of that deserves recognition. They are the largest whole-life insurance client base, with over 600 companies offering life and health insurance.

They are not known as big life insurers. Nor are they bombarded with television ads offering term life insurance quotes. They are aware that excessive television advertising for insurance is unethical, and they don’t want to be able to bypass their agents. A super-large insurance company was caught trying to lure customers with low rates and enable phone purchases. It is now in financial trouble. This well-known company is costing taxpayers and the American government billions in bailout provisions.


Almost all states have at least 300 active life, health and annuity insurers. Here are some thoughts. Are you happy with what you earn? Are agents who work for major brands really able to sell more insurance? Can you make a career change? Are you looking for term insurance sales that pay 50%, 70% or 90% commissions? What are your goals for a career as a professional? Are you able to run your own business or do you find the advice you receive far too valuable?

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This is what your insurance provider can do. What can you do for your insurance provider? It should also be about what you can do to help your clients and yourself.