Life Insurance Broker, Agent, Advisor: What's The Difference? (Canada-Specific Guide!)

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What's the difference between a life insurance broker vs. agent vs. advisor?

Here are the differences between a life insurance broker, a life insurance agent and a life insurance advisor at a glance:

  • Life insurance broker: works on behalf of their customer with a group of life insurance companies
  • Life insurance agent: represents one particular life insurance company
  • Life insurance advisor: works on behalf of their customer, can work at either a brokerage or one life insurance provider

What is a life insurance broker?

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, 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.

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.

And, as they are commissioned, they may oversell you on coverage so that they get a bigger sale out of you. But this is not a blanket statement, there are certainly life insurance brokers out there that can give you neutral, even-handed advice on life insurance!

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.

What is a life insurance agent?

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 life insurance, critical illness insurance, home 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.

What is a life insurance advisor?

A life insurance advisor is responsible for giving customers advice on their coverage needs, create a customized policy offering based on clients' financial situations and helping them save money on their life insurance 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!

How do you sell life insurance in Canada?

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).

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.

How do I find a life insurance broker near me?

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:

  1. Word-of-mouth; asking friends and family!
  2. Google or Bing (followed by a healthy amount of research).

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 not commissioned and would give you the kind of advice we'd give even our closest friends.

Learn more:

Do you need an advisor for life insurance in Canada?

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! 

Bottom line: brokers, agents and advisors can help. But do your own research, too!

  • Get clear if the insurance professional you’re working with is an agent, broker or advisor
  • Ask for advice from a few different insurance experts to double-check your recommendations
  • Make sure to look at customer reviews for the different potential providers on your list!

FAQ: Life insurance broker vs life insurance agent vs life insurance advisor

What are the life insurance agent commission rates in Canada?

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.

How much does a life insurance agent make?

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.

What is a life insurance brokerage? 

A life insurance brokerage is a company or organization that helps individuals navigate the process of finding and buying life insurance policies. 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 process straightforward and convenient, ensuring that individuals can find the right policy to protect their loved ones.

What are the disadvantages of using an insurance broker?

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.

Laura McKay

COO & Co-Founder
About the Author

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