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As a quick overview, here is the main difference between a life insurance broker, a life insurance agent and a life insurance advisor:
A life insurance broker is not an employee of a particular life insurance company or provider. A life insurance broker helps customers find a life insurance policy that suits their needs and conduct regular follow ups, if that person purchases a policy, they make commission on that sale. That's not to say that they are a completely unbiased source of truth for life insurance advice or have your best interests at heart when recommending insurance options.
They may partner with a handful of life insurance companies to push you in their direction, rather than looking at the whole pool of the best life insurance providers in Canada.
Not quite sure how much life insurance coverage you need to protect your family financially?
Start here: with a life insurance calculator that pulls together all of your financial obligations to give you a coverage recommendation.
A life insurance agent is someone that works for a life insurance company, like a bank, and is often licensed to sell exactly that. They can be licensed to sell multiple different kinds of insurance at once, like whole life insurance, term life insurance, critical illness insurance, home insurance, mortgage insurance, etc. But they sell insurance products from just one company only – their employer. If they are not licensed, they are only able to provide customer support, answer questions and admin help, but they can't sell policies.
Generally speaking, a life insurance agent gets a salary paid by the life insurance company, often along with commission or performance bonuses.
A life insurance advisor is responsible for giving customers advice on their coverage needs, create a customized policy options based on clients' financial situations and helping them save money on their life insurance quotes where they can. A life insurance advisor can either work for a brokerage or for a single life insurance provider.
For example, our team is entirely made up of life insurance advisors ready and poised to help you get the most coverage for the least cost. They'll even tell you if life insurance isn't worth it for you right now!
In order to sell life insurance in Canada, you must be licensed by the provincial governing body of your place of employment. For example, if you are based in Ontario, you'd need a license from Registered Insurance Brokers of Ontario or if you are based in Alberta, you'd need licensing from Alberta Insurance Council (AIC) or if you are based in British Columbia, you'd need licensing from The Insurance Council of BC (Insurance Council).
On top of this, most insurance professionals are also required to do some sort of post-secondary schooling and on-the-job training. These requirements have been pulled from the Government of Canada website under Labour market information for your convenience.
The bottom line? Whether you buy life insurance from a broker, an agent or an advisor, you can be sure that they have passed an appropriate amount of school, along with a provincial license.
You can find a life insurance broker near you through a few different sources! Chiefly, there are two main ways in which people research life insurance brokers in their area:
Broadly, regardless of how you find a life insurance professional near you, we recommend looking up customer reviews for whichever life insurance company or brokerage you're thinking of contacting.
If you're looking for genuine and honest life insurance advice from industry experts, we've got you covered. PolicyMe life insurance advisors are ready to give you the kind of advice we'd give even our closest friends.
Learn more:
You do not need to go through an advisor (or an agent or a broker) to buy life insurance in Canada! In fact, we've made it delightfully simple to apply for coverage – 100% online.
You can get your estimated life insurance quote in a few clicks, apply in around 20 minutes and some eligible applicants even get instantly approved for their policy. If you need pointers, no biggie; you can contact our life insurance experts Monday to Friday. If not, see you on the internet!
Life insurance agent commission rates in Canada can vary quite a bit depending on the insurance company and the specific policy being sold. Generally, agents earn a commission based on a percentage of the premium paid by the policyholder.
These commission rates can something range from around 40% to 90% of the first year's premium, with lower percentages for subsequent years. It's important to note that these commissions are typically paid by the insurance company and not directly by the policyholder.
The income of a life insurance agent will differ greatly on factors like experience, sales performance and the types of insurance products they sell.
On average, a life insurance agent earns around $65,000 to $85,000 per year in Canada as a base salary. However, it's important to note that this figure can fluctuate significantly.
Some agents may earn less when starting out, while others who are more experienced and successful can earn six-figure incomes. And on top of this, life insurance agents may receive extra compensation through commissions and bonuses based on their sales performance.
A life insurance brokerage is a company or organization that assists individuals in navigating the entire process of finding and buying life insurance policies, such as term life insurance, whole life insurance, critical illness insurance, and more. Acting as intermediaries between insurance buyers and providers, brokerages work with multiple insurance companies, allowing them to offer a range of options and personalized advice. They simplify the complex world of insurance by providing guidance tailored to individual needs and budgets.
The goal of a brokerage is to make the entire process of buying insurance straightforward and convenient, ensuring that individuals can find the right policy to protect their loved ones.
The main disadvantage of working with an insurance broker is that you may end up paying more for your coverage. This can happen in two key ways: either through the commission that is paid to the life insurance broker or by the broker overselling you on life insurance. What do we mean by overselling you? Perhaps you were sold on a permanent life insurance solution (like universal and whole life) because the premiums are much higher than they'd be with a term life insurance policy.
They are also less incentivized to find you discounts, for example, helping you save money through a joint life insurance policy.
