Insurance providers come in two types depending on how an insurance policy is purchased. There are agents who sell insurance products and carriers who provide the products. Insurance providers can also consist of the employers as well as federal and state government who provide various health insurance plans to individuals and families. Insurance providers offer many types of insurance products that can be purchased by a consumer.
Insurance providers have various types of products that are offered to all types of consumers. Insurance products that are provided by an insurance carrier typically include automobile policies, homeowners policies, life insurance policies and health insurance policies. Insurance carriers can also provide a variety of commercial policies depending on the needs of a particular consumer such as a business entity.
An insurance agent is a person who provides various types of insurance products that an individual can purchase. The two common types of insurance agents consist of a captive agent and an independent agent. A captive agent is a person who works for a specific insurance company, such as State Farm. An independent agent contracts with multiple insurance carriers to sell their insurance products to their client base. Each type of agent generally earns a commission on every insurance policy they sell.
Insurance carriers are the companies that provide insurance coverage, in the form of a policy, that is sold by an agent or offered directly to the consumer. Insurance carriers can use agents to sell their products or offer their products to consumers without the use of an agent. These companies can be a national insurance company that offers policies in every state or a regional carrier that offers policies only in certain states or a specific geographic area.
The federal government and most state governments are a type of insurance provider because they offer health insurance to certain groups of people. The federal government provides the Medicare program to individuals who are over 65 years of age or are disabled. State governments offer the Medicaid program to certain state residents who meet eligibility requirements. Health insurance is also offered by state governments in the form of high-risk health insurance pools.
Individuals who work for an employer generally are provided with health insurance coverage from their employer's group health insurance plan. Employers contract with a specific health insurance company to which they make premium payments for the coverage that is to be included in the group health insurance plan. Employees typically do not make premium payments but do have out-of-pocket costs such as a deductible or co-payment.