Insurance Agent VS. Insurance Consultant

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Super Genius
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Had someone ask me this today, I didn't really know how to answer. Maybe someone on here that is more experienced then me does know the answer.
 
Your state may make this a difference.

An agent represents one or more insurance companies and they are paid by those companies.

Insurance consultant/analyst is one who is paid by the customer to analyze current coverage, etc.

Just follow the money.

Like you said every state is different, but does a "consultant" actually sell anything, or are you just paying someone to tell you what to do and they refer you to an agent.

Do you have to be licensed to do it? just seems like an interesting business
 
Had someone ask me this today, I didn't really know how to answer. Maybe someone on here that is more experienced then me does know the answer.

It's all about who can utilize legal grammar the best.

No, it's all about who can comply with any particular state's statutory licensing requirement.

An insurance agent (aka producer or broker) sells policies for which he is paid a commission (or salary if an employee producer). He is required to be licensed by the state insurance department as an agent, producer, or broker. This is common to all states.

An insurance consultant may have different definitions and licensing requirements depending on the state.

Massachusetts, for example, statutorily defines "Insurance Advisor" as follows:

"Whoever, not being an officer or a regular salaried employee of any company and acting for such company, or not being duly licensed as an insurance broker or not being duly licensed as an insurance agent and acting for any company of which he is such an agent, or not being a duly authorized attorney-at-law or a certified public accountant acting within the course or scope of his profession or business, for a fee received or to be received, offers to examine, or examines or aids in examining any policy of insurance or any annuity or pure endowment contract for the purpose of giving, or gives or offers to give, any advice, counsel, recommendation or information in respect to the terms, conditions, benefits, coverage or premium of any such policy or contract, or in respect to the expediency or advisability of altering, changing, exchanging, converting, replacing, surrendering, continuing, renewing or rejecting any such policy or contract, or of accepting or procuring any such policy or contract from any company, or whoever, in or on advertisements, cards, signs, circulars or letterheads, or elsewhere, or in any other way or manner by which public announcements are made, uses the title ''insurance adviser'', ''insurance specialist'', ''insurance counselor'', ''insurance analyst'', ''policyholders' adviser'', ''policyholders' counselor'', or any other similar title, or any title, word or combination of words indicating that he gives, or is engaged in the business of giving, advice, counsel, recommendation or information to holders of policies of insurance or annuity or pure endowment contracts, shall be deemed an insurance adviser."

And requires a separate license and a licensing exam.

Section 177A

A quick googling reveals that many states do have similar licensing requirements and a person who purports to be a consultant while he is really just selling policies could be in big trouble. Seems like a conflict of interests to me.
 
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No, it's all about who can comply with any particular state's statutory licensing requirement.

An insurance agent (aka producer or broker) sells policies for which he is paid a commission (or salary if an employee producer). He is required to be licensed by the state insurance department as an agent, producer, or broker. This is common to all states.

An insurance consultant may have different definitions and licensing requirements depending on the state.

Massachusetts, for example, statutorily defines "Insurance Advisor" as follows:

"Whoever, not being an officer or a regular salaried employee of any company and acting for such company, or not being duly licensed as an insurance broker or not being duly licensed as an insurance agent and acting for any company of which he is such an agent, or not being a duly authorized attorney-at-law or a certified public accountant acting within the course or scope of his profession or business, for a fee received or to be received, offers to examine, or examines or aids in examining any policy of insurance or any annuity or pure endowment contract for the purpose of giving, or gives or offers to give, any advice, counsel, recommendation or information in respect to the terms, conditions, benefits, coverage or premium of any such policy or contract, or in respect to the expediency or advisability of altering, changing, exchanging, converting, replacing, surrendering, continuing, renewing or rejecting any such policy or contract, or of accepting or procuring any such policy or contract from any company, or whoever, in or on advertisements, cards, signs, circulars or letterheads, or elsewhere, or in any other way or manner by which public announcements are made, uses the title ''insurance adviser'', ''insurance specialist'', ''insurance counselor'', ''insurance analyst'', ''policyholders' adviser'', ''policyholders' counselor'', or any other similar title, or any title, word or combination of words indicating that he gives, or is engaged in the business of giving, advice, counsel, recommendation or information to holders of policies of insurance or annuity or pure endowment contracts, shall be deemed an insurance adviser."

And requires a separate license and a licensing exam.

Section 177A

A quick googling reveals that many states do have similar licensing requirements and a person who purports to be a consultant while he is really just selling policies could be in big trouble. Seems like a conflict of interests to me.

It does when I was first asked it, I thought that the potential client just talked with an Agent who doesn't want to called that to avoid a "salesy" job title, so they just told them they were a consultant.

I did google it, it is a separate license in MA called Advisor vs. agent which is a "Producer" When I called the Div. of Insurance months ago to ask them a Licensing question, they told me anybody who even discusses and type of insurance and wants to CHARGE for there knowledge MUST be licensed.

I have to check with an attorney but it is probably some sort of conflict of interest that you need a waiver for. Kinda like when Real Estate agents also are licensed to sell Home Owners insurance, or Mortgage protection. Seems like a conflict of interest but I have been told a single waiver signed by client and erase all that. But I don't know I am not an attorney.
 
A quick googling reveals that many states do have similar licensing requirements and a person who purports to be a consultant while he is really just selling policies could be in big trouble. Seems like a conflict of interests to me.

I don't understand why they wouldn't just get a producers license so you could actually just sell the policy and probably make more.
 

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