What is different between an insurance agent and an insurance broker? Most people think that they both have the same function; to peddle insurance policies to people, but there is actually more to that. If you are wondering what are the real deal differences between these two insurance professionals, here are some background information about them:
An insurance agent is sort of like the person in between the insurance company and the insured person. The main responsibilities of agents are purely administrative; like making sure that all the necessary forms are filled out and submitted in a timely and orderly fashion. As a rule, insurance agents are not required to supervise the insured, and they are also not required to make sure that the person has the right kind of coverage for his needs; that obligation lies solely on the person insured.
There are basically two types of insurance agents; captive and independent. A captive agent is someone who is under the employment of one particular insurance company; this means they can only sell policies from that one company, hence the term “captive”.
An independent insurance agent on the other hand is someone who is not tied to one single company, they can actually offer policies from several different insurance providers. Besides peddling the policies, independent agents can also provide their clients with useful comparisons between the different products that they have access to.
Insurance brokers are similar in a way to independent agents, but they do not represent the insurance companies, they represent their clients. They are responsible for finding the right kind of insurance policies for their clients from the vast resources that are in their disposal. They need to analyze the needs of their clients, and they need to make sure that their clients choose the right insurance policy that can provide adequate coverage for all their needs.
Because of the additional responsibilities, brokers need more training and experience to do their job correctly. And, because of these requirements, the services of brokers often command a higher price than that of insurance agents.
If you think that the quality of the insurance you get will differ when you choose an agent over a broker, then you are very much mistaken. It does not matter which method you choose to purchase your health insurance, you will still get the same kind of service and benefits; it is only a matter of preference and which