DEFINITION of 'Captive Agent'

An insurance agent who only works for one insurance company. A captive agent is paid by that one company either with a combination of salary and commissions or with just commissions. He or she may be a full-time employee or an independent contractor, and may be provided with office space and benefits by the employer. Captive agents have in-depth knowledge of their particular company's insurance products, but cannot help a client who does not need or does not qualify for that company's products. The parent company may push its captive agents to sell certain policies or meet certain sales quotas.




BREAKING DOWN 'Captive Agent'

The opposite of a captive agent is an independent agent. An independent agent does not work for any particular insurance company and is often paid by commission only. Independent agents can sell policies from an array of companies. This arrangement can be better for clients because the agent can seek out the best policy for that client's needs. However, an independent agent may not have specialized knowledge about a particular company's products. An independent agent arrangement can be better for agents because it offers a more diversified source of income, but it can also be riskier because the agent may need to provide his or her own startup capital, pay for business expenses and arrange benefits.



RELATED TERMS
  1. Independent Agent

    An insurance agent that sells insurance policies provided by ...
  2. American Agency System

    A method of selling insurance policies in which independent insurance ...
  3. Agency Plant

    The amount of presence that an insurance company has in a market.
  4. Real Estate Agent

    A person with a state/provincial license to represent a buyer ...
  5. Agent

    Any person who has been legally empowered to act on behalf of ...
  6. Paying Agent

    An agent who accepts payments from the issuer of a security and ...
Related Articles
  1. Financial Advisor

    How to Find the Best Life Insurance Agent

    Choosing a life insurance agent is the first and most important step in obtaining coverage. Buyers should pay attention to five key factors.
  2. Insurance

    How to Become a Life Insurance Agent

    The pros and cons of becoming a life insurance agent, a field that can be hard to crack—but that can pay off big when you do.
  3. Investing

    Do You Need A Real Estate Agent?

    There's no guarantee that realtors will act in your best interest, but it may be worth hiring one anyway.
  4. Investing

    How Do Real Estate Agents Get Paid?

    Here's how real estate commissions on home sales really work. And, yes, they're negotiable.
  5. Insurance

    What Your Life Insurance Agent Makes – On You

    Being paid by commission gives life insurance agents an incentive to sell bigger policies and specialized financial products. Remember that before you buy.
  6. Investing

    How To Find The Best Real Estate Agent

    Most people don't have the time, expertise or motivation to go it alone and finding a good real estate agent becomes essential to enjoying a smooth real estate transaction.
  7. Insurance

    Becoming An Insurance Agent

    Few careers match the opportunity for as quick and large a paycheck as does being a life insurance agent.
  8. Investing

    Top 5 Signs Of A Bad Real Estate Agent

    The signs of a bad agent go beyond whether your home sells quickly.
  9. Insurance

    Career Advice: Stockbroker Vs. Insurance Agent

    Compare and contrast careers as a stockbroker and insurance agent. Understand the skills and attributes required for success in each career.
RELATED FAQS
  1. Do real estate agents get paid hourly or by salary?

    Learn about real estate commissions and how real estate agents, including listing agents, buyer's agents and real estate ... Read Answer >>
  2. How can I tell when a real estate agent might be lying to me?

    Find out what real estate agents are likely to lie about, the reasons for the lies and how to protect yourself from unscrupulous ... Read Answer >>
  3. Do real estate agents work on weekends?

    Learn how working weekends and evenings is one way real estate agents increase their chances of making a sale to a potential ... Read Answer >>
  4. How do real estate agents get listings?

    Learn about how real estate agents get listings in top real estate markets, as well as in smaller areas, through utilizing ... Read Answer >>
  5. How do real estate agents market themselves?

    Find an agent by checking popular real estate circulars featuring desirable neighborhoods and call the agent to ask questions ... Read Answer >>
  6. What is the role of agency theory in corporate governance?

    Understand how businesses use agency theory in corporate governance. Learn how moral hazard problems may be addressed using ... Read Answer >>
Hot Definitions
  1. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  2. Pro Forma

    A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results ...
  3. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  4. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  5. Portable Alpha

    A strategy in which portfolio managers separate alpha from beta by investing in securities that differ from the market index ...
  6. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
Trading Center