What is the difference between an Insurance Agent and Insurance Broker?
When it comes to Insurance policies - Insurance Agent and Insurance Broker are two most commonly heard terms. These two designations, although often confused to mean one and the same thing, serve two very different purposes. Knowing the difference between two becomes important for initiating and successfully completing an insurance transaction.
Let’s start from the beginning
An Insurance Broker is interested in selling, buying or negotiating various financial products best suited to their individual client’s needs for compensation. This means that they are more invested in finding out what’s best for you and can offer a host of options from across companies and organizations, as per your requirements.
An Insurance Agent, on the other hand, sells, negotiates, or promotes financial products on behalf of their employer organization. They act as the sales representatives for the company and its financial products. An independent agent also sells various financial products like property insurance, casualty insurance, life insurance, etc.
Ideally, Insurance Agents are hired by Insurance companies to reach out to the customers directly. They are mainly responsible for filling and processing the forms accurately and ensuring that premiums are paid timely.
How Are They Different?
The biggest difference between an Insurance Broker and an Insurance Agent is the people/organization they represent respectively.
An insurance broker represents you as the client whereas an Insurance Agent represents the company they are employed by as their client, and you become the customer.
Insurance Agents are responsible for offering you products and services available in their employer company and also for the accurate and flawless processing of documents including forms, paperwork, and premium payments.
Insurance Brokers, on the other hand, are responsible for providing you with information on various suitable options as per your needs. It is in their interest to provide you with the most suitable product as per your requirements as their income depends on the compensation they earn after each deal made.
Variety of Products Offered
Insurance Agents have a limited number of policies or products to offer. They generally can represent a maximum of one each of general insurance, life insurance, and only one health insurance company. They are responsible for providing you with insightful information on these products or the said company.
Insurance Brokers can provide you with information on several financial products and help you choose the one that suits your needs the best.
An Insurance Agent is responsible for ensuring that you get the full coverage sum offered initially. They also provide in-depth and insightful information on the policies available and the company they represent. However, it is your responsibility to ensure that the insurance policy you select, suits and fulfills all your financial needs.
Insurance Brokers are issued a Broker’s license by the Insurance Regulatory and Development Authority of India (IRDA). Thus, in case of any discrepancies, you can directly report them to the IRDA, which an result in their license being canceled.
You can also be rest assured with an Insurance agent as they are governed by the Insurance Regulatory bodies and thus undertake their work under good guidance and supervision. In case of any discrepancy, you can always get in touch with the company they represent. If the findings of your issue come into foul light, the company is liable to cancel the agent’s license accordingly.
At the end of the day, trust and reliability should be the two main deciding factors determining your investment choices. A good investment broker and an efficient Insurance agent is a choice that you can make after considering all factors that suit your need.