Most companies distribute the same through brokers and agents, while few companies sell insurance products directly to clients. To work as per convenience and the opportunity to create a massive difference in a person’s life working as an insurance broker offers more flexibility. It is the most rewarding career as it helps people to take care of children, build assets, plan for retirement, and pass wealth from one generation to the next.
Things that insurance brokers do:
Insurance brokers are majorly independent. They don’t have an agreement with particular insurers. They usually represent insurance buyers and take forward the applications to insurers on behalf of their clients. Ideally, after becoming an insurance broker, they are not appointed by insurers. Instead, they educate the clients about several insurance products from different insurance companies and help them choose the best among them.
The majority of the people wonder whether ‘Insurance Agents and Insurance Brokers – Are the same?
What makes insurance brokers unique from insurance agents?
Insurance brokers choose from a variety of insurance products and help the clients to choose a policy that is adequate for their needs. In contrast, insurance agents work with one company and sell insurance products available in their company. You can determine the most appropriate products for them, unlike agents, they provide options, and it’s up to the clients to assess the products they need. Additionally, brokers typically charge payments that are higher than those authorized by an agent.
Who can apply for an insurance broker license?
When it comes to becoming an insurance broker, an Insurance broker license and their operations are issued as per IRDA regulations. The ones who can apply for an insurance broker license are:
- A company registered under the Companies Act, 2013 or any previous variant.
- A registered co-operative society is registered as per the provisions of the Co-operative Societies Act, 1912, or other similar laws.
- An LLP registered under the Limited Liability Partnership Act, 2008.
- Any person recognized by the authority.
Qualification and training details:
- Must have a bachelor’s/master’s degree or any equivalent qualification like being a fellow or an associate of the Insurance Institute of India/Insurance Institute of Risk Management/Insurance Brokers Association of India.
- The person must have undergone adequate hours of theoretical and practical training recognized by the Insurance Regulatory Authority of India.
- Once training is over, get passed the exam conducted by the National Insurance Academy.
- Retain a minimum capital as per regulations provided by the authority.
- Engage in any insurance consultancy or reinsurance activity for seven years from the date before the application is submitted. Otherwise, being a principal underwriter or manager in any nationalized company in India.
The license can be issued after the necessary conditions are satisfied. Unless the same is suspended by the regulations, it can be valid for 3 years from the issued date. Before the license gets expired, a broker may apply for license renewal within 30 days. Brokers carrying brochures and loads of policy documents to meet people are not a situation anymore.