Agents in Insurance: Everything You Need to Know

Definition: 

An insurance agent is a licensed individual who sells and services insurance policies.

Contents

• What is an Agent in Life Insurance?
• Key Takeaways
• How an Agent Works in Life Insurance?
• Types of Insurance Agents
• Why It Matters for Policyholders?
• Bottom Line
• FAQs

What is an Agent in Life Insurance?

A life insurance agent is a licensed professional who assists individuals or businesses in policy purchase and implementation. They are licensed by the IRDAI to guide clients through some of the more important decisions, such as purchasing a new policy, setting up or updating an existing one, or proceeding with a claim.

Some agents work exclusively for one insurer, while others offer plans from multiple insurers. Understanding what happens behind the scenes with life insurance agents will make the process of choosing the right policy for the purchaser a little smoother and more informed, especially if you need assistance after the purchase.

Key Takeaways

• An insurance agent is a licensed individual who is authorised to sell insurance policies on behalf of an insurance company.

• Life insurance agents must guide new clients through the insurance purchase process. And, maintaining the existing clients with support whenever required.

• Insurance agents can be categorised into two major types: Captive and Independent 

• Agents in insurance are required to complete training from an IRDAI-approved training institute and pass the examination conducted by IRDAI to obtain a license.

• Insurance agents earn commission from the sale of insurance policies. They receive a percentage of the premium the customer pays.

How an Agent Works in Life Insurance?

The role of an insurance agent or insurance agency involves:

• Examining the needs of the customer

• Rcommending suitable policies 

• Explaining the policy details 

• Helping with paperwork related to the policy and claims

• Providing regular support

Apart from the above-listed responsibilities related to the policy, the agent is also expected to stay informed about the changes in rules regarding policies, products, and the industry. Insurance agents are active in building customer trust and managing their finances.

Types of Insurance Agents

There are two main types of insurance agents: Captive Agents or Exclusive Agents and Independent Agents. Here is a clear breakdown of the roles and responsibilities of the two:

• Captive Agents or Exclusive Agents: They work for just one insurance company and have in-depth knowledge about its insurance-related products and services. They only offer policies of the company they represent.

• Independent Agents: They represent multiple insurance companies, allowing wider selection and comparison between various client products. Independent insurance agents have an understanding of various policies across various companies.

Why It Matters for Policyholders?

It is important for individuals looking to buy a policy or existing policyholders to have a reliable insurance agent or an insurance agency. Agents are crucial in selecting the right policy according to specific goals and needs, even in after-sales services. After-sales services include claiming policy, informing about changing regulations, etc.  
It is crucial that while buying any policy, you verify the credentials of the insurance agent or agency by cross-examining their license and identity card. Because dealing with an untrained or unlicensed insurance agent can lead to wrong purchases or delayed claims. Knowing the agent’s role leads to better service, fewer risks, and a smoother insurance journey, especially for first-time buyers navigating complex policy options.

Bottom Line

A life insurance agent is more than just a policy seller. They guide you throughout your insurance journey. Their services range from selecting the right policies to processing policy claims. They play a major role in India’s emerging insurance industry as they are a trust bridge between the insurer and the customers. 

From choosing the right plan to helping with claims, their role ensures clarity, convenience, and confidence. For policyholders, understanding an agent's actions can lead to smarter decisions and better financial security.

FAQs

Below are some of the frequently asked questions on Agents in Insurance

1. What is the meaning of an insurance agent?

A life insurance agent is a certified expert who sells and manages life insurance policies for an insurance company. They assist clients in selecting the appropriate policy according to their financial requirements.

2. Define an independent insurance agent. 

Independent insurance agents work for multiple insurance providers, offering a wide selection to their clients. They have an understanding of various policies across various companies.

3. How do insurance agents obtain a license?

Insurance agents must undergo IRDAI-approved training and clear the examination conducted by it. After clearing the examination, the agent receives the licence to be eligible to sell insurance. 

4. Is it compulsory to buy insurance through an agent?

No, it is not compulsory. However, purchasing through a licensed agent ensures you understand the policy, that the agent aids in preventing mistakes, and that the agent assists with claims.

5. What is the meaning of an insurance agency?

An agency business is a company that provides a specialised service to its clients. Often, agencies act on behalf of another company, group, or individual to manage a business segment.

6. How to become an insurance agent in India?

To become an insurance agent in India, one must complete IRDAI-approved training. After the training, the next step is to clear an exam and register with an insurance company to start selling policies.

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