What Is Independent Agent? Definition

Why it matters

Independent agents can compare carriers for a family and pick a fit for health, age, and budget. They set up contracts with each carrier, directly or through an IMO. Contract levels, lead costs, and chargeback terms differ by carrier. Independence also means paying business costs, taxes, and licensing yourself. Families benefit from more choice, but the agent still has to be licensed and appointed with each carrier.

Source: irs.gov

Where we use this term

Related terms

Captive Agent: A captive agent sells the products of one insurance company, or a small group of related companies, under an exclusive agreement. The company usually controls the agent's products and rules.
Agent vs Broker: An agent usually represents an insurance company, while a broker usually represents the buyer. In practice, many licensed producers act as both, and state law defines the terms.
1099 Independent Contractor: A 1099 independent contractor is a worker who is paid for services without taxes withheld and who receives Form 1099-NEC rather than a W-2. The worker runs their own business.
Independent Marketing Organization (IMO): An IMO, or independent marketing organization, is a company that recruits independent agents and gives them access to carrier contracts, training, leads, and support. It is not an insurance carrier.
Contract Level: A contract level is the percentage tier of a carrier's commission schedule that an agent is paid. A higher level means a larger share of the premium as commission.

All 241 terms

Why it matters

Where we use this term

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