As an insurance agent, you can be licensed for various lines of authority, depending on the types of insurance products you sell. Each line of authority, or LOA, represents a distinct insurance category you can offer to your clients. Let’s review the different lines of authority in insurance and what each covers.
Property and Casualty (P&C) Insurance
Property and casualty insurance covers a wide range of policies, including automobile, homeowner’s, renters, and commercial insurance. You likely have this coverage on your home and car. P&C insurance agents can help their clients find the right insurance coverage to protect their property and assets in case of damage, loss, or liability.
Life insurance provides financial protection to the beneficiaries of the policyholder in the event of their death. Life insurance agents can help their clients choose the right type of policy, such as term life, whole life, or universal life insurance, based on their individual needs and circumstances.
Due to the rising costs of medical care and procedures, health insurance is one of the most important insurance coverages in today’s society. It covers medical expenses, such as doctor visits, hospital stays, and prescription medications. Health insurance agents help their clients find the right plan for their healthcare needs, whether it’s an individual or group policy.
Accident and Health Insurance
Accident and health insurance provides coverage for accidents and illnesses that are not covered by traditional health insurance plans. This coverage can help bridge the gap between what traditional health insurance covers, and the effects that an accident or health problem can cause in your life. It includes disability insurance, long-term care insurance, and critical illness insurance.
Annuities are financial products that provide a steady stream of income over a specific period of time. When an individual buys an annuity from an insurance company, they pay a premium. The insurance company invests the premium into an investment vehicle that contains stocks, bonds, and other securities, which is the annuity fund. Annuities are purchased for a set period and payout a specific amount in retirement based on the investment strategy and amount invested. Annuity agents can help their clients find the right type of annuity, such as fixed or variable annuities, based on their retirement goals and income needs.
Surety bonds are written agreements to guarantee compliance, payment, or performance of an act. They’re contracts between three parties: the principal, the obligee, and the surety. There are quite a few different types of security bonds although they are most often used in construction and commercial business. Surety bond agents can help their clients obtain the necessary bond to guarantee their performance and protect against financial losses.
Title insurance protects both property owners and lenders from financial losses due to defects in the title. For example, when you take out a mortgage loan to buy your property, your lender will require title insurance. This protects the lender’s interest in your property until your loan is paid off or refinanced should some unforeseen circumstance alter the ownership or “title” of the property. On the other hand, an owner’s policy of title insurance ensures your ownership rights to the property. Even though you’ll pay for this policy only once, your coverage will last as long as you own your home. Title insurance agents can help their clients obtain the necessary title insurance to ensure a smooth and hassle-free closing process.
Other Lines of Authority
In addition to the common lines of authority listed above, there are several other options that insurance agents can be licensed to sell, such as travel insurance, pet insurance, and specialty insurance products.
As an insurance agent, it’s important to understand the different lines of authority available to you so that you can offer the best insurance products and services to your clients. Each line of authority requires specific training and education, so it’s important to stay up-to-date with the latest industry trends and regulations to provide the highest level of expertise to your clients.