Published: | Updated: October 18, 2017

Definition - What does Broker/Dealer mean?

A broker/dealer is a company that both brings insurance buyers and sellers together and also works with insurance companies to manage securities. These securities are bought with money that comes in from premiums from policyholders. Essentially, broker/dealers are involved with two valuable services in the insurance world.

Insuranceopedia explains Broker/Dealer

Universal life insurance and variable annuities both involve policyholders' money being invested in securities. These securities are supposed to increase in worth over time, thus enhancing the value of the policy. Insurance brokers do not manage these types of investments. They just bring insurance buyers and sellers together. However, insurance broker/dealers will manage the investments on behalf of the insurance company. The benefit of using a broker/dealer for insurance companies is having the same company provide two services, instead of needing to find and deal with two individual companies.

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