Mortgage Broker vs. Insurance Agent: What Are the Differences?

Mortgage brokers and insurance agents are both financial professionals who help people secure loans and insurance policies, respectively. Though they share some similarities, there are several key differences between these two job titles. In this article, we discuss the similarities and differences between mortgage brokers and insurance agents, and we provide helpful tips for choosing the right financial professional for your needs.

What is a Mortgage Broker?

Mortgage brokers work with banks and other financial institutions to secure loans for their clients. They help their clients by shopping around for the best interest rates and loan terms. Mortgage brokers also provide guidance to their clients on credit repair, budgeting and other financial matters. They must be licensed by the state in which they work.

What is an Insurance Agent?

Insurance agents typically work for insurance companies or as independent contractors. They sell and service insurance policies to individuals, families and businesses. As insurance experts, they advise their clients on the type and amount of coverage they need to protect themselves from financial losses. Insurance agents typically specialize in one or more types of insurance, such as life, health, property or casualty. They use their knowledge of the insurance market to find the best policies for their clients at the most competitive prices. Insurance agents must be licensed by the state in which they work.

Mortgage Broker vs. Insurance Agent

Here are the main differences between a mortgage broker and an insurance agent.

Job Duties

Although both mortgage brokers and insurance agents share some duties, they also have unique responsibilities. For example, a mortgage broker may meet with clients to discuss their financial situations and help them find the right type of loan. They then work with lenders to ensure that the client’s application is complete and submit it for approval.

Insurance agents typically meet with clients to discuss coverage options and help them choose the right plan. They may also assist in filing paperwork and processing claims. Depending on the type of insurance the client purchases, the agent may be responsible for educating them on how to use their coverage effectively.

Job Requirements

Mortgage brokers typically need at least a high school diploma, although some employers prefer candidates to have a bachelor’s degree. Mortgage brokers must also be licensed by the state in which they work. To obtain a license, mortgage brokers must complete 20 hours of pre-license education and pass an exam. Some states also require mortgage brokers to take continuing education courses to renew their licenses.

Insurance agents typically need at least a high school diploma as well. However, many insurance companies prefer candidates to have a college degree, especially if they want to sell life insurance. Insurance agents must also be licensed by the state in which they work. To obtain a license, insurance agents must complete pre-license education and pass an exam. Some states also require insurance agents to take continuing education courses to renew their licenses.

Work Environment

Mortgage brokers work in a variety of environments, depending on the type of mortgage they’re selling. For example, if you’re working with a broker to purchase a home, they may visit homes and properties with you to help you find the right one for your needs. They also spend time at their office or another location where they can meet with clients and discuss mortgage options.

Insurance agents typically work in an insurance agency, but they may travel to meet with clients as well. Depending on the type of insurance they’re selling, they may need to go to locations like construction sites or hospitals to assess risk factors.

Skills

Mortgage brokers and insurance agents are both sales professionals who work with clients to assess their needs and find products that fit those needs. They both need excellent people skills to build relationships with clients and earn their trust. They also need to be good listeners to understand what clients are looking for.

Mortgage brokers need to have a strong understanding of the mortgage industry and the products available to potential borrowers. They also need to be able to crunch numbers and use financial analysis to determine which products would be the best fit for each client. Insurance agents need to have a strong understanding of the insurance industry and the products available to potential policyholders. They also need to be able to assess risk and recommend coverage levels that will protect their clients’ assets.

Salary

Mortgage brokers can earn an average salary of $110,854 per year, while insurance agents can earn an average salary of $62,436 per year. Both of these salaries can vary depending on the type of insurance or mortgage you sell, the location of your job and the level of experience you have prior to pursuing either position.