- Date : 14/05/2018
- Read: 4 mins
Understanding the difference between an insurance agent and an insurance broker can help you make the right choice when taking a financial decision. Let’s take a look at what it is that they do and how you can effectively use their services to get an insurance policy that suits your needs.
Knowing the difference between an insurance agent and an insurance broker is the key to understanding how you, as an insurance policy holder, can make the best use of their services for your insurance and financial requirements. We help you understand what exactly they do so that you can make an informed choice while buying insurance.
Insurance agent vs insurance broker: The Differentiators
Who is insurance agent?
An independent insurance agent or insurance sales agent typically sells you a variety of financial products, like property insurance, casualty insurance, life insurance, health insurance, etc. The agent can be a person who acts as an intermediary between the insurance company and the person availing insurance.
Who is an insurance broker?
An insurance broker sells, solicits or negotiates insurance for compensation. A broker works independently, meaning they can offer you a host of insurance products and services to consider. Insurance brokers have a higher responsibility for helping you choose the best financial product that fits your needs.
|Parameters||Insurance Agent||Insurance Broker|
|Whom do they represent?||An Insurance Company. You are their customer.||You, meaning you are their client|
|What do they do?||Offer you products available with the insurance company with whom they are associated. Responsible for accurate processing of forms, paperwork and premiums||Help you choose the most suitable insurance policy amongst different insurance companies and products|
|How do they work?||An insurance agent can represent a maximum of 1 life insurance, 1 general insurance and 1 health insurance company and can give you detailed insights about||They can give you information about several insurance companies and help you compare their products|
Let’s start from the basics. If you are looking to get a new insurance policy or wish to ensure that the policy you currently have best suits your interests, your go-to person is an insurance broker. Brokers are issued a broker’s license by IRDA (Insurance Regulatory and Development Authority of India) which gives them additional expertise and technical knowledge.How can they assist you?
Brokers can be sued in case they fail to deliver what was promised. The IRDA can cancel the broker’s license, if found guilty. As brokers, they are bound to offer products from multiple insurers at the same time, helping you choose the one that best suits your interests.
An insurance company hires agents who can reach out to customers individually. An agent in insurance is only responsible for accurately filling and processing forms, ensuring the paperwork is in place and ensure timely premiums. An insurance agent’s primary duty is to ensure that you get the appropriate coverage as has been promised by the insurance company. Agents can give you in-depth information of the insurance company they represent and the products they have on offer. It is your obligation to make sure the insurance you have chosen covers your interests fully. In addition to insurance policies, licensed agents can also offer you mutual funds, annuities, and products that address wealth management, estate planning, and retirement.
Although insurance agents cannot be sued, they can be reported about to the IRDAI or the insurance company they represent. If found guilty, the insurance company can revoke the agent’s license.
Reliability and trust are crucial factors for you to consider when deciding which insurance policy you should invest in. The first step to trust is knowledge, and that’s where insurance agents and brokers can help you. But no matter what you are advised, the final decision always lies with you, so use it wisely. To start off with, here are 5 questions you must ask before you buy insurance.