Difference Between Insurance agent and Broker
People interested in seeking insurance will need information from either an insurance agent or a broker; after all, to acquire the right insurance policy, one will need just the right information and advice. The terms Insurance agent and broker have been used almost synonymously with one another, after all, both insurance agent and broker sell the services of insurance companies to the public and bring in business. However, the two words were given separate designations as they have subtle variances in terms if obligations, functions, and duties.
Insurance agent refers to an individual authorized by Insurance companies as a representative to work and act on the company’s behalf. This entails power to sell the company’s products and services and for every transaction he accomplishes, he receives a commission out of it. In order to do so, he spreads information to possible consumers and elaborates on the why people need such a service. An Insurance Agent is not an employee, thus, is not included in the company’s payroll and is thus granted more flexibility in terms of job commitments since he may work for other jobs or on other possible sources of income.
Brokers may sell insurance policies like an Insurance agent; however, his work usually entails him matching the services of a certain Insurance company with a specific business of individual. One can say that he is the matchmaker between businesses/ persons to the right type of Insurance policy/ company.
A broker is a qualified individual who has to pass a course for him to acquire a license in being a broker. He has knowledge of financial products being sold in the market by companies and assesses the requirements and needs of an individual or business and aids him by providing the best insurance policy option.
Other Differences between Insurance Agents and Brokers
- Insurance agents are designated by insurance companies to sell their financial products, whereas Brokers are licensed to assess if the financial needs of a certain individual or company is appropriate with that of an insurance policy.
- Brokers are more suited for commercial insurance products, whereas Insurance agents are more suited to provide personal insurance to interested persons
- A Broker has to successfully accomplish courses in order to obtain a professional license; Insurance Agents, on the other hand, have none.