|
Why do need an insurance broker?
Insurance, be it life, home, or business is a complicated yet unavoidable area and you will have to deal with it at some point of time in life. An overabundance of policies offering a range of insurance covers can out and out confusing to a person wanting to take insurance for the first time or for somebody going for a new policy. A good thing would be to for someone to explain to you everything in detail, including the fine print so you can decide on the policy that works best for you.
What you should know about your broker?
An insurance broker best fulfils this role. An insurance broker will help guide you through a maze of insurance and lead you to the policy that best suits you. If you decide to go through a broker, you must know a few important things about the broker such as what sort of broker he/she is? Some brokers are independent intermediaries, who are able to help find the best policy from a large range of insurers. Some of the intermediaries will call themselves an insurance 'consultant' or 'agent'. These brokers may only be representing a handful of insurance companies or, in the case of an agent, will be tied to one insurance company. Every broker must tell you what type of intermediary he or she is.
Basically, brokers provide two types of services -
Execution only - This is when you have already decided on the insurance product you want to go in for and the broker is expected to fulfil only the actual execution of the policy.
Execution and advice - If they offer you advice on purchasing insurance products, they would like to know more details about you. A series of questions they will ask you is aimed at finding out more about you and your financial needs.
Another important point to remember is that insurance companies pay commission to the agents or insurance brokers. However, this should not affect the products that are recommended, but it does give them a margin for variation in terms of premiums. If they get a commission for introducing a customer, they could pass over some of the commission to you in the form of cheaper premiums for the same cover.
| 
