An insurance cover protects you against unexpected financial losses. Though insurance does not remove the risk, it can partly compensate the losses you may encounter in a mishap. In case of assets or material possessions, depreciation is calculated when compensation is calculated. When you purchase an insurance policy, the idea is that a group of people pay specified premiums for a specific risk into a common pool. Funds from this pool are used to compensate individual losses. The premium that one pays is based on a set formula.
Why People Prefer Agent for Purchasing Insurance?
Looking at today’s busy lifestyle, it is not easy to run around getting every small thing insured. You will neither have the time, not the patience, nor the expertise for this. Here is when the role of insurance broker or agent becomes important. Brokers can help you save your time and money and stay away from anxiety. Just as an accountant or lawyer who provides you expertise related to their fields, an insurance agent brings to the table expertise related to the field of insurance. Insurance can be extremely complex and difficult to understand. An insurance broker can help you understand the minute details of a policy and also calculate the amount of cover you need, to stay fully protected. no
Hiring a Broker Costs Less
Purchasing an insurance through an agent doesn’t always cost more. In fact, it costs less as brokers have expert knowledge of the market and are able to negotiate competitive premiums for you. Besides, because insurance brokers deal with a lot of insurance companies themselves, they have access to insurance policies that are not openly available to most consumers. And the job of a broker doesn’t end with selling you a policy. It’s when you have to make a claim that their services come in most handy, and they will liaise between you and the insurance company to ensure that you get properly compensated for your losses. A broker is an independent entity possessing full knowledge of all kinds of Insurance products offered by insurance companies. They are therefore, in the perfect position to provide you the best kind of personalized services to manage your insurance policies.
How Does a Broker Function?
The broker provides insurance services by helping you identify risks associated with various insurance plans. The broker can advise you on what risks you should be protected against. They will then help you get the best policy at the most competitive price. It is the broker who will get the policy, do and maintain the documentation, and also help you with information whenever you need any. They will also keep a track of when your policies are due for renewal. This is very important because there are certain policies such as Mediclaim which lapse if you overshoot the renewal date by even a day.
Broker Provides Ongoing Services
Brokers provide insurance services after detailed discussions with you regarding your requirements and negotiating on your behalf with the insurance companies. This leaves you with enough time to take care of your own personal and professional or business responsibilities. Brokers also keep track of your changing circumstances and insurance needs and advice you if any changes need to be made in your insurance cover.
How to Select A Broker
This can be tricky, so always stick to those brokers who are members of the Insurance Brokers Association of India. This is the governing body for accredited brokers and ensures that brokers operate honestly and professionally as per their Code of Conduct. You can change your broker at any time without imperiling your insurance policies. Brokers just need an appointment letter to start working on their clients’ needs. If you are wondering for whom the brokers actually work – for their clients or the insurance companies, then rest assured it is for the clients. Unlike agents of the insurance company, brokers act independently and in the sole interests of their clients. They also help out their clients for getting their claims settled in their best interests.
How Are Brokers Paid?
The most common method of paying brokers is commission. It is based on the amount of work involved, amount of risk covered, or as per the contract between the broker and the client. Such a payment system would also make sure that you have to pay only for the services you actually benefit from, without having to spend too much of your time.