The concept of insurance brokers or agents has been introduced in India by the IRDAI through the Insurance Brokers Regulation 2002 that was again amended in 2013. Certain functions and code of conduct of a broker are stated in these regulations.
An insurance broker is someone who specializes in insurance and risk management and they provide advice on insurance to the clients. They also help individuals or business in risk identification and suggest suitable insurance to cover the risks. They also provide technical advice on making an insurance claim and help you understand the terms and conditions regarding coverage and exclusions so that you may make an informed decision about the right insurance product. The insurance agents also help in arranging and placing insurance cover with the chosen insurance company.
However, there are certain cases in which an insurance broker might not be able to help you enough:
- Insurance policies are a complex set of documents and one needs a thorough understanding of the products. You need to know whether your insurance broker is well qualified enough and is an expert on the subject matter to help you choose a policy most beneficial to you.
- Your insurance broker should also be able to negotiate the premium on your behalf and help you acquire the best insurance plan, depending on your requirement.
- You should choose an insurance broker who will be able to advise you about any special situation that you should be aware of and that will include risk management as well.
- In case of businesses, your broker should be able to tell you whether you should take some risks or not and whether you are adequately covered to take those risks.
- The insurance broker should also be able to help you make a claim and should have the technical know- how of the entire process to help you make the claim and get your money.
It the duty of the insurance broker to help you out in all the above mentioned scenarios. The insurance broker is paid by the company for which they are agents and hence they should be able to give you these services without charging additional fees from you. Hence, before you assign a broker for your tasks, be sure to make the inquiries to gauge whether they will be of use to you when the time actually comes.
Hence, you should ask about the qualifications of the broker and inquire about the range of services they provide. You should ask about the servicing of your accounts and also about the average business turnover of his clients. You should also try to find out about some of his other clients and get their feedback regarding how he manages the money. You should ask about the options and solutions for your business needs and also the commitment on their services. It is important to ask these questions as it provides you with a safeguard against your money.
There are some insurance agents who also act as financial advisers and it is a good idea to opt for their services if they have been in the industry for some years and they have acquired the necessary experience. You will trust your financial portfolio to this person so it is important to make proper queries regarding his management before you choose to work with him. The best way to do so is to invest small amounts with him first and see the returns and payoffs you get and then invest bigger amounts later.