Finance

Pros / Cons Of Using An Insurance Broker / Agent

If you are searching for an insurance policy, then you may have come across the terms insurance broker and insurance agent. Some people confuse them as being the same but that’s not the case. Both have some notable differences and licenses that allow them to perform different tasks. The similarity though is that both the broker and agent act as your representative when dealing with an insurer and have knowledge of rules and regulations. In this article, we look at the pros and cons of hiring the services of both an insurance broker and insurance agent. You can always visit www.singapore-insurance-empire.com for more information.

What is an insurance broker?

Insurance brokers can be considered as freelancers who provide their services on a personal level. Not being attached to an organization gives them the freedom to engage both with the insurers and the clients, so they have more knowledge related to the whole market. They have specialization in risk management and insurance policies and therefore can access policies that meet your requirements and guide you in a manner that you receive the best value. Insurance brokers also perform a range of other jobs such as claim settlement and renewing policies for their clients, but the best part is that they are available for help anytime.

Advantages of insurance broker:

  • Insurance brokers are not tied to any one company, so that means they will provide you with a broad range of insurance policies instead of just a few specific ones which a company offers.
  • They deal with clients on a personal level, understand the issues and your needs, analyze the issues related and then guide you in the direction which is best suited.
  • They can get in touch with several insurance providers, evaluate the deals and come back with the best possible option that suits your requirements.
  • Insurance brokers do not treat you as just another client; they want to build relationships that last for a long time since they are working freelance and would like your return custom.
  • They are always available for contact, whenever you are confused about something or want some information, instead of worrying about office times and the procedures to set up a meeting.
  • Insurance brokers not only act as your policy finder but also act as your settlement representative when you need to fight a lawsuit or settle claims originating from your insurance policies.
  • They cost much less than other insurance companies and take a percentage of share on the policy you get. Ultimately, it means if they are charging more, you have gotten a better deal.
  • They are very experienced and have contacts in many companies which means they will provide you with advice that’s coming from many sources.

Disadvantages of Insurance broker:

  • Brokers earn money by selling policies which means they can try to sell you or pressure you into something which may not ultimately be right for you.
  • They are paid by insurance companies on an undisclosed structure which can cause doubts in the mind of the buyer that they are trying to make a deal to give themselves more profit.
  • You don’t always need the extra coverage of add-ons provided with the package so make sure you avoid signing something that you do not require just because the broker says so.

What is an insurance agent?

Insurance agents are representatives of an insurance company that provides its services related to insurance policies, claim settlement, contracts, and others. They operate a different type of system. The buyer has to decide which to choose from, depending on the information provided by the agent. They are specialists in the services they provide and have in-depth knowledge. The policies provided have to be signed by the insurer, and the buyer and agents have to follow some guidelines provided by the company. In short, they are restricted in which products they can sell but are specialists in the services.

Advantages of insurance agents:

  • Agents are more reputable since they are working for an organization and have a working history which helps you to feel confident making a decision.
  • Since they are already getting a salary, it means they will not force you into something just because they want to earn something from it.
  • They have detailed knowledge of the policies being provided and can always customize them based on the customer requirement.
  • An insurance agent has a team working alongside them, so if you face any problem that may not be related to them, agents can always recommend you to someone within their organization.
  • They can simplify things for you because they deal with just the product being sold and you get information in simple terms without confusion.
  • Insurance agents have to meet certain educational requirements before they granted a license which means they have proper training in the things they are doing, so you can trust their capabilities.
  • You do not have to deal with everything personally; care is taken to give you the ease of service.

Disadvantages of insurance agents:

  • They do not have access to all the different policies which may suit your requirements, which can be a big negative factor.
  • They are representing their company and dealing with a client on their behalf which means you cannot get that same sense of personal care from them.
  • They don’t always know about related issues, so you may need to hire other services.
  • Insurance agents may only provide you policies which have the most significant margins of profit for their company or themselves, and you cannot customize them.

Conclusion

In conclusion, deciding whether to use an insurance broker or an insurance agent is a personal decision, but it helps to keep in mind that insurance related issues are very complex and if you decide without proper guidance it can have a severe impact on your business and personal life. No matter who you choose, you should be comfortable in dealing with them. Also, make sure they are available and giving your case the importance it deserves.