PLEASANT HILL, Calif., Sept. 14, 2026 /PRNewswire/ — A new national survey released by the Life Insurance Consumer Advocacy Center (LICAC) found widespread confusion among consumers about the role of life insurance agents, how they are compensated, and whose interests they represent when selling a policy.
Key findings from the survey include:
- More than 65% of respondents incorrectly believed their agent had a legal obligation to act in their best interest.
- Only 10% of respondents understood that their agent primarily represented the insurance company.
- More than 40% of respondents believed their agent represented the policyholder, and almost that many believed that the agent represented the policyholder and the insurance company equally.
- Only 35% of respondents understood that agent compensation is commission-based and determined as a percentage of the premium paid by the policyholder.
- Only 6% of consumers understood that agent commissions could be 100% or more of the first year’s premium.
In 2024, California consumers owned 10.2 million individual life insurance policies and paid nearly $22 billion in life insurance premiums. LICAC believes the survey findings demonstrate the need for policymakers and regulators to examine whether consumers have sufficient information and protections when purchasing these products.
“Consumers are making decisions about products that can affect their financial security for decades, yet this survey shows many don’t understand something as fundamental as who their agent represents,” said Brian Brosnahan, President and Executive Director of LICAC. “Too many consumers get victimized buying life insurance because they trust their agent more than they should, which may lead a consumer to accept a recommendation without really understanding what the consumer is buying. There are many honest and highly professional agents out there. But there are also many agents who are much more interested in the commissions they can make than in what is good for the consumer.”
Based on these survey findings, LICAC believes that California should follow New York’s lead and impose an obligation on agents to act in their customer’s best interest. This would protect and benefit consumers, while bringing agent obligations in line with what most consumers already think they are.
Until California imposes a “best interest obligation” on life insurance agents, it will be important to educate consumers through disclosures at the beginning of the consumer-agent relationship. This includes:
- That the agent represents the insurance company
- That the agent does not have an obligation to act in the consumer’s best interest.
Consumers also deserve to know how and how much the agent will be compensated if the consumer accepts the agent’s recommendation; this will help the consumer evaluate the recommendation and make informed, thoughtful decisions.
“Closing the gap between consumer beliefs and reality is essential,” said Richard Weber, Treasurer of LICAC. “We need stronger consumer protections and clearer disclosure requirements. These are issues that deserve the attention of policymakers, the insurance industry and candidates for California Insurance Commissioner.”
California voters will elect an Insurance Commissioner in November, providing an opportunity for greater discussion about consumer protections in the insurance marketplace. While much of the recent public attention surrounding insurance in California has focused on homeowners’ insurance, LICAC believes life insurance should also be part of that conversation.
The nationally representative survey was conducted by Research America Inc. in early 2026 and polled over 200 individuals who had purchased a life insurance policy within the past 10 years.
Learn more about the survey results and implications here: https://lifeinsuranceconsumeradvocacycenter.org/consumers-are-badly-informed-about-the-role-and-obligations-of-their-life-insurance-agents/.
For more information about the Life Insurance Consumer Advocacy Center, visit https://www.lifeinsuranceconsumeradvocacycenter.org/
The Life Insurance Advocacy Center (LICAC) was founded to advocate for consumer protections in the life insurance industry. LICAC’s mission is to alert the public, including consumers and policymakers, about the potential risks of certain types of life insurance products, including annuities and investment-oriented life insurance policies; and to advocate for reasonable and essential consumer protections for these types of products.
Contact: Doug Elmets
(916) 329-9180
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SOURCE Life Insurance Consumer Advocacy Center (LICAC)
