What does an insurance agent do?
[social_share]An insurance agent is a salesman. They are often compared to insurance brokers, and although there are some similarities there are also a number of differences that should be taken into account. Although an insurance agent can be useful, particularly in certain non-standard situations, there should be some awareness of what an insurance agent does before engaging with one.
A life insurance agent is essentially a salesman who is maintained by an insurance company, usually amongst the bigger firms. There are some insurance agents who work for more than one company, but these companies are rarely in competition over the policies offered. Some insurance agents are employed directly by one insurance company on a salary, with a commission and bonus added on. Finally, others are self-employed, although these tend to be paid on a commission basis rather than by salary.
As life insurance brokers are also often paid by commission, and they offer a similar advisory function, they are often confused with insurance agents. However, an insurance broker is in the end paid by the life insurance applicant, and their professional duty is to the client. The life insurance agent, on the other hand, is employed by the insurance provider, and they should only represent and provide that insurance company’s products.
Life insurance agents can be a good source of advice at the right time. They have some training and experience in explaining the products they sell and so they are usually able to offer expert advice on the relative merits of the various products from the provider they represent.
However, it’s a good idea to only ask a life insurance agent for advice after it’s been decided the insurance provider he or she represents is best for the purpose. If the life insurance agent is the first point of enquiry rather than the last, then it’s very likely the insurance agent will merely sell the insurance they’re retained to sell, and so the options for finding the most appropriate policy will be narrowed considerably.
A life insurance broker by contrast is expected to look over the whole market for the most appropriate product, and will also search a large number of more obscure and specialist life insurance providers. This is not usually possible with life insurance agents.
