You might have actually been hearing about Insurance Brokerage and an Insurance broker, but may really want to know what these two stands for. In this short explanation, we are to discuss briefly on them, and what are the differences between an Insurance Broker and Insurance Agent.
I’m pretty sure you know what the word “Insurance” means, if NO, it’s simply a mutual agreement between you and a company (an insurer), where you pay a certain amount of money or buying a plan, then the company cover or pay up the expenses whenever uncertain events like accident, burglar or anything bad thing happen.
But there are a lot of processes involved before an insurance premium plan can be bought.
You really don’t need to bother yourself with the processes or any insurance jargon, all you need to do is to find a good insurance broker and you’re good to go.
So, that’s where we are going; let’s start discussing these terms: Insurance brokerage, Insurance broker, and Insurance Agent.
What is Insurance Brokerage?
Insurance brokerage is the business involved guiding people (interested in buying an insurance package) about the DOs and DON’Ts of insurance policies while giving advice about the best and yet, affordable insurance plan to buy and finally, which of the available insurance companies to choose.
Cambridge Dictionary summarized the meaning of Insurance Brokerage as:
The business of providing professional advice and insurance products from a number of reliable insurers.
Now, let’s talk about an Insurance broker.
Who’s an Insurance Broker?
An insurance broker deals with the sale of insurance policies in a bid to make a profit. In essence, an insurance broker is one who is into the business of selling different types of insurance plans to both corporate organizations and individuals.
The insurance firm pays them a commission when a plan is bought or renewed by their client(s).
The benefit of Using an Insurance Broker
One good reason to work with a broker when scouting for insurance policies is the level of transparency being offered. Their duty entails discussing with a customer and coming up with an unbiased suggestion that suits your needs. This is because these brokers are not affiliated with a particular insurance firm, but rather, they work with the customers to suggest the best firms based on their overall knowledge of the industry.
In the medical field, the brokers are there to help simplify the technical jargon which is quite prevalent in most policies to the customers. Failure to understand certain terms of the agreement has led to issues like failed claims and many more.
This is why working with an insurance broker or a top HMO in Nigeria gives you an edge. They also have access to first hand and official information which may be outdated in most online blogs.
Overall, insurance brokers are quite important to the insured and the insurer; because both parties stand to benefit in various ways from his services.
Now, let talk about an Insurance Agent;
Who’s an Insurance Agent?
An insurance agent is just like an Insurance broker, but an agent represents an insurance firm or sells insurance plans on behalf of a company to the clients.
To break it down, let’s talk about the differences between an Insurance broker and Insurance Agent.
Insurance Broker vs Insurance Agent: What Differs?
Although these individuals are similar in terms of services provided; the sale of insurance policies to customers. There exists a line in terms of intentions.
A broker has the customer at heart and tries to ensure they get a good insurance plan. On the other hand, an agent also has the customer at heart, but his affiliation lies with a particular firm. This may lead to bias on the side of the agent; because his plans may not be well suited for your needs.
But note that;
Both insurance brokers and insurance agents act as a medium between an insurance buyer (YOU) and an insurer (Insurance Company)… What differentiates these two is that insurance brokers and insurance agents are who each represents.
An Insurance broker represents the insurance buyer while an Insurance agent represents one or more insurance companies.
That’s it – About Meaning of Insurance Brokerage, Insurance Agent & Insurance Broker
I hope you won’t mix them up again. It is advisable to know what you’re doing in order to avoid being scammed. Apart from being scammed, it is also important to know these terminologies for any reference’s sake.
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