When you decide to buy an insurance plan whether life insurance or general insurance plan, you have two of the most common choices for buying the policy – through an insurance agent or through an insurance broker. Which, amongst them, do you choose? Do you buy from an insurance agent or seek the help of an insurance broker? Do you even know how these two are different? Let’s understand –
Who is an insurance agent?
An insurance agent is a representative of an insurance company. The agent fills the gap between the insurance company and the customer and brings these two closer. The agent sells the insurance plans of the company he represents. In case of life insurance, the agent can sell the life insurance plans of one single company only that he or she represents.
Similarly, in case of general insurance, the agent can represent only one company. However, the agent can sell any type of insurance plan sold by the general insurance company which he or she represents. For instance, if an agent represents a general insurance company selling health insurance, motor insurance, travel insurance and other insurance plans, the agent would be free to sell any plan of that company. For each sale, the agent is paid a commission which is calculated as a percentage of the premium he brings in for the insurance company.
Advantages of buying insurance through an agent
• You get personalized services as the agent is usually someone known to you
• Since the agent knows you, he or she would sell you a correct plan as per your requirement
• Agents also render help to service your policy and also during a claim.
• The agent’s help at the time of claim is possible only if your agent stays in touch with you after selling the policy
• Agents represent only one insurance company and so you cannot compare between different available plans before buying
• Agents often miss-sell insurance policies for a higher commission
• Agents might not have the technical expertise required in handling your insurance-related queries
Who is an insurance broker?
An insurance broker is also a middleman selling insurance policies. However, compared to agents, brokers represent multiple insurance companies and are authorized to sell insurance plans of different companies they represent. Brokers are also paid a commission on the premium amount they source for the insurance company. They have an authorized license from IRDAI to sell insurance.
Advantages of buying through a broker
• Brokers give you the option to compare between insurance plans offered by different companies. So, you can choose a plan after comparing between other plans.
• Brokers have immense technical experience and knowledge to help you with your insurance-related queries.
• Brokers help at the time of claim assistance as they retain a long-term relation with you even after a sale is made.
• Brokers assist you in after-sales services too.
• Brokers have also established themselves in the online marketplace. This online medium helps you in buying the policy easily and without any hassles.
There are no such disadvantages when buying a policy from an insurance broker. There might be a lack of personal touch when you do not know the broker personally. However, brokers are established entities and render post-sale service which is an important criterion when buying an insurance plan.
Which one to choose
Insurance brokers are the wise choice because of the following reasons:
• Though you might know your agent personally, you cannot guarantee that the agent would sell you the best plan. With brokers, this uncertainty is absent. Brokers assess your needs and then offer you a choice of plans. You can choose a plan as per your requirement without being forced to buy one. Thus, brokers do not miss-sell you an insurance policy which is usually done by insurance agents.
• Agents might not give you continued service throughout the policy tenure if they disappear after selling you a policy. Brokers, on the other hand, have an established insurance business and are around for a far longer period than agents.
• Online insurance brokers are also available through whom you can select an insurance policy and buy it without any unnecessary hassles. In case of agents, you would have to go by the traditional route of filling lengthy proposal forms, submitting your documents and then waiting for the policy to be issued.
So, the verdict is quite clear. Insurance brokers are a better choice than insurance agents. Online insurance brokers are better as they are fast and convenient. Coverfox is also an online broker. You can buy an insurance plan of your choice through Coverfox. So, make a wise choice. Go for insurance brokers and buy a plan only after comparison.