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- Who looks out for your interest best?
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A captive agent
or an independent agent? (graphics clicking)
In this educational episode, I'm going to address
the question that I get asked quite often.
What is the difference (graphics swishing)
between a captive agent
and an independent agent?
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And which one is better? (graphics popping and fuzzing)
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So, stay tuned,
I'm going to explain the difference, and which one
in my opinion, I think is generally better for you.
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So, I'm Doug Andrew, and I've been a financial strategist
and retirement planning specialist now
for nearly five decades, helping thousands of clients
optimize assets, minimize taxes,
and empower their authentic wealth.
One of my favorite financial instruments
to accomplish those goals (graphics clicking)
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is a maximum funded, indexed
universal life insurance contract.
So, I've had
an insurance license since 1974.
Now, I have always been an independent agent,
but let me explain the difference
between a captive agent and an independent agent,
and then I'll address what might be best for you to explore
if you're looking for an insurance agent
to provide some services for you.
So, it depends upon what it is that you're needing
'cause we're talking about insurance,
could generally be life insurance,
but it could be property and casualty.
That would be your auto insurance,
your homeowner's insurance, or what have you.
So, a captive agent is named that
because they are captive usually with one
insurance carrier or company.
So, some typical captive companies
might be State Farm or Farmers,
Allstate, these are a lot of the PNC companies,
but they also offer life insurance.
You will usually see companies
like Northwestern Mutual that will have just captive agents.
You have to sell their products.
You can't sell for other insurance companies.
Now, you will have some insurance companies
that have a captive division, that if you are contracted
with them under the captive contract,
you can only sell their products, but they also
might have a brokerage division where you can be appointed
to that insurance carrier
if you're sort of an independent agent.
So, one that comes to my mind is Mass Mutual.
Mass Mutual for a long time, as I'm aware,
has a captive division where you are captive
with that company, you only sell Mass Mutual products
unless you're authorized to sell a particular product.
If a client wants a product that Mass Mutual doesn't offer,
then they can shop around,
but they have to be approved by maybe the head company.
I have had contracts with Mass Mutual,
but as an independent agent.
And so sometimes, you have insurance companies
that will have a captive division
and an independent brokerage division.
And so, when we talk about a broker, it simply means
that an independent agent is a broker
that can then be brokered to write insurance
with several different insurance companies.
So, the question I get asked next is, well,
which one is better?
Well, it it depends.
I think there are some captive agents that still
look out for their client's best interest,
but they are restricted many times,
and only being able (graphics clicking)
to show products (graphics ding)
that their company offers or represents.
And so, I remember,
from 2003 to 2007,
I actually trained
over 3,000 financial advisors, CPAs, and tax attorneys,
and among these 3,000, that paid me 6,000
in tuition to come to a three-day training.
Some of them were captive agents.
I remember some with like State Farm.
And State Farm actually offered a universal life product,
but it did not hold a candle to the ones
that I recommended to my clients.
And so, State Farm actually authorized
many of their captive agents to be able to sell
indexed universal life, which they did not offer,
and that performed better with other carriers,
but they had to approve which carriers did that.
So, a lot of times, an independent agent has the freedom
to be able to have several contracts.
Now, as an independent agent myself,
I've been contracted with as many as 30 to 40
different companies in a given year.
Usually, I don't need that many.
Generally, I would place
most clients with products
in as many as as six different main companies,
because I found that usually I only needed about
six different carriers that had enough products
that would fit the needs of 99.9% of the clients that I had.
But I had contracts with some of these other carriers
in case I had somebody with a unique health issue.
And I knew that some insurance companies
would accept those kinds of risks.
But most of the time, I didn't really need
to show a client 30 or 40 different alternatives,
that just confuses the client.
I would show them maybe one or two,
but I would do the research.
And so, as an independent agent,
that allowed me the ability to research
five, six, seven different insurance company products.
And many of these insurance companies offer two
and three, or four different universal life products.
But I began to learn very quickly which ones fit
which scenarios, and which age groups,
and which health status
type of profiles of clients.
And so, I would immediately know, okay,
this client that I just met with is this age,
age 55 to age 65.
And this is their goal, and they want to accomplish this,
and they want these features.
They want as much liquidity as possible.
They've had a few heart episodes in the past,
but now they're good.
And so, my brain would automatically know,
well, I need to go to these two carriers
and show them options with these
products of these two carriers 'cause I knew
they would perform the best.
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So, my opinion (graphics ding)
is generally speaking, an independent agent
has more freedom to shop and look out
for the client's best interest instead of being restricted
just to the products of one company.
I'm not saying that some of these captive companies
don't have good products,
but sometimes, one size fits all advice
is not the best way to go.
So hopefully, this has helped you understand,
and this is why
the many different licensed agents that I train,
and I continue to mentor,
most of them are independent agents.
Or, they at least have three, four,
or five different companies, products at their fingertips.
So if you would like to learn more
about why it's important to have that kind of versatility,
the options, and see the differences
in how they may perform, it's more important
to their structure correctly and funded properly.
But you can learn more about this,
and I would recommend that you read and study my 11th book,
it's called "The LASER Fund."
Now, this retails on Amazon for 20 bucks.
You're welcome to purchase it there,
but I'm willing to gift you this free.
But I require a little bit of skin in the game,
so this is actually two books in one,
it's 300 pages total,
but 200 pages is on this white covered side.
And this is for the left brain learners.
This has all the charts and graphs,
and explanations of max funded, indexed universal life,
and how it works.
If you're more of a right brain learner,
you learn by stories and examples,
you flip it over to this side,
this is about a hundred pages, as 62 actual client
stories of how a properly structured IUL.
And if it's properly structured,
it is what I call a LASER fund.
LASER is an acronym that stands
for Liquid Assets Safely Earning Returns.
It's very critical that if you want it to perform well
as a living benefit, it's structured correctly.
This book will teach you how to do that.
If you wanna use your whole brain,
you can read both of these books,
but you simply go to LASER fund, L-A-S-E-R .com,
or click on the link below,
and you contribute a nominal amount
towards the shipping and handling.
And I'll cover the rest of that cost,
and I'll pay for the book,
I'll fire out a hard copy to you.
And then, when you're in there claiming your free copy,
if you also like to listen and learn, or watch and learn,
there's options there for audio and video.
There's even an 18-hour masterclass
if you really wanna go on a deep dive.
We teach educational webinars
on a regular basis, they're free.
You can even schedule an appointment when you go in there
with an IUL specialist that I oversee
and make sure as I mentor them, that it's done correctly.
But this is not about me.
This is about you and your brighter future.
And most of the agents that I train are not captive,
they're independent, but there are some captive agents,
we teach them how to at least tweak their products
to work best for you.
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