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Captive Agent

Sounds like we’re talking about a kidnapped spy, right?

Nope, sorry. We’re actually going to talk about captive insurance agents. They’re not nearly as interesting as operatives in espionage thrillers, but it is important to know who they are—especially when you’re looking for someone to help you with your insurance options.

Whether you’re already working with an insurance agent, considering your options, or actively shopping, there are some easy ways to identify a captive agent.

Let’s walk through what you need to know.

What Is a Captive Agent?

A captive agent, aka an exclusive insurance agent, works for a single insurance company. Captive agents can only sell the products of the insurance company they work for.

How Does a Captive Agent Work?

Because captive agents only work for one company, they often have in-depth knowledge of their company’s products. Captive agents should be experts on the different policies, discounts and coverage add-ons for the carrier they work for.

Captive agents get a commission for every sale they make, but their commission rate tends to be lower than an independent agent because they’re also paid a salary. They get financial help from their company for advertising and hiring costs too (if their business is growing and they need to hire more help).

Captive Agent Pros and Cons

The biggest benefit of working with a captive agent is their in-depth expertise about their company’s products and policies. They’re typically very familiar with the different coverage options and claims submission process.

Captive insurance agents often don’t have to spend time finding clients, or spend money on advertising, marketing and other overhead costs because it’s all handled by the company they work for. That can mean they have more time to spend with customers.

One of the downsides is that captive agents often have sales quotas to fill. That pressure can lead to pushier sales tactics because they’re trying hard to please their boss. And that can leave the door open for your true needs to take a backseat.

The other downside, and probably the biggest, is that captive agents can only sell you a policy from their company. That means there’s a limit to the pricing flexibility and coverage options they can offer.

Independent Agents vs. Captive Agents

Let’s get straight to the point. You’ll get better service and more options when you work with an independent agent instead of a captive agent. Here’s why.


While it’s true that captive agents are trained to be familiar with their company’s product(s), independent agents are knowledgeable about multiple products from multiple companies. And the more options they can choose from, the better the odds that an independent agent can find the right insurance product for you.

Captive agents, on the other hand, might push you to buy a generic product you don’t need just to fulfill their company’s sales quota. And they literally can’t compare options from other companies, so they can’t give you a complete picture of your options.


Most insurance agents consider becoming an independent agent as a career goal. Who can blame them? Independent agents enjoy more flexible hours, more learning opportunities and greater success. Sounds pretty appealing, right?

This means that independent agents usually start out as a captive agent until they learn the ropes and feel experienced enough to go out on their own. Translation: Independent insurance agents know more than captive agents because they’ve been in the business longer. And when you’re dealing with anything as important as insurance—you want experience on your side!

Customer Service

Listen, you can find both captive agents and independent agents who super-serve their clients. But captive agents clearly have one hand tied behind their backs because they can only talk to you about one company’s products. Plus, independent agents who’ve been in the business for a while are successful for a reason—they know the insurance industry and they know how to find exactly what their clients need.

 Do you have the right insurance coverage? You could be saving hundreds! Connect with an insurance pro today!

That’s why we choose to work with independent agents over captive agents through our Endorsed Local Provider (ELP) program. We handpick our insurance ELPs so you can work with a trustworthy, knowledgeable insurance industry professional in your area. They’re seasoned insurance pros who have the flexibility to find the right policy for you.

Connect with an ELP today!

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Ramsey Solutions

About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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