The insurance sector is vital as it pools money for the collective good. It plays a pivotal role in safeguarding financial interests and managing risks. But for someone new to the industry or who wishes to purchase insurance for the first time, it is essential to understand the various aspects of insurance and the channels you might use to deal with it.
For most people, the three channels to purchase health insurance are online directly on the insurance provider's website, with the help of a health care insurance agent, or through a broker. But knowing the difference between them, what they do, how they can help you, and whom to approach in what scenario can help make the process easier and more convenient.
Who is a certified insurance agent?
An insurance agent is a representative for an insurance provider and is responsible for advising potential customers to help them choose the best plan for their needs. Beyond this, they are also responsible for offering financial advice and customer support.
An insurance agent is responsible for generating new business for the insurer they represent and also acts as a face for the insurer to represent them in front of customers. There are usually two kinds of agents. The first is an independent agent who is free to represent as many insurers as they want, and the second is an exclusive agent who represents only a single insurance provider and is typically a full-time or part-time employee there.
Who is a licensed insurance broker?
A licensed insurance broker advises and offers clients the best policies/plans from several insurance providers. They are responsible for providing the best plans for their client's needs. They help find and combine plans to offer the best coverage based on the needs and requirements of the client.
What is the difference between the two?
|
Point of differentiation |
Insurance Agent |
Insurance Broker |
|
Scope |
Sales, policy servicing, advice about choosing the right plan, explaining policy details, inclusions, exclusions, etc. |
An insurance broker plays a broader role, offering advice and acting as a way to compare different plans and insurers. |
|
Affiliation |
An insurance agent is affiliated with the insurer whose insurance they are selling. |
A broker is affiliated with their client as they play the role of a consultant or a facilitator. |
|
Range of products |
An insurance agent's product range depends on whether they represent a single insurer or are affiliated with several insurance providers. |
A broker has no limitation in the range of products. They can choose products from any insurers available to offer their clients the best plan. |
|
Expertise |
An insurance agent is expected to hold in-depth expertise about the products they are dealing with. This can offer greater confidence to customers. |
A broker will try to find the best plan for their client's needs but not understand each product well. |
|
Compensation |
Depending on the type of insurance agent, one might receive salaries and commissions based on the premium as compensation. |
An insurance broker will be paid a brokerage fee by the client and a commission fee by the insurer after the sale of insurance. |
How to become a health care insurance agent or broker?
Becoming a certified insurance agent is a very rewarding job that requires zero investment, making it an excellent option for people who wish to have a secondary source of income or new job seekers to enter for a stable income.
To become a certified insurance agent, one must fulfill these eligibility criteria and follow these steps.
- Be at least 18 years old.
- Pass at least 10th or 12th standard, depending on the location
- Have an Aadhar card and PAN Card
- Complete mandatory practical training
- Pass an exam prescribed by the IRDAI
Once you have made sure that you have fulfilled the first three requirements, you can approach your preferred insurance provider for the last two steps. In my case, I prefer Niva Bupa over all other insurance providers, and these are the steps I followed to become an agent for them.
- Visit the Become an Agent webpage.
- Fill the form with the appropriate information
- After submitting the form I was contacted by the Niva Bupa team
- After that, we completed an orientation and began with practical training
- After making sure that I was ready, I gave the exam
- After getting results and signing a contract with Niva Bupa, I became an agent.
Conclusion
By following the above-given steps, anyone can become an agent for their insurance provider of choice. Additionally, although insurance agents and brokers are instrumental in the insurance industry, the above table of differences can make it more clear.
This should help both clients choose the right person to approach for their needs and act as a guide for new and aspiring people joining this industry.
