What it means to be an Insurance Agent

The insurance agent is bound by the terms of appointment of the insurer and is expected to procure business for the insurer. It is not a job that he has to do at fixed hours, in prescribed ways and under close supervision. Once licensed and appointed, he is an independent professional. He is the master of his time. He is not prevented from pursuing any other interest or vocation. Many agents see the agency as a means to earn a living. They may spend only part of the time on insurance, being busy on other work the rest of the time. Some agents however, try to study and understand the business in great details and to improve their skills. They are trying to become the best in the profession. They would be recognized as experts in the field.

To most persons, life insurance is just one of the many avenues for financial outlays. When an agent approaches a prospect with the proposal for life insurance, the chances are that the prospect will not know much about the benefits under various plans. He may be vaguely familiar with the alternatives available, but is unlikely to be sure of the details of all of them. He would need expert advice. If he sees the life insurance agent as one who is keen to divert his money to life insurance to the exclusion of other alternatives, then that agent's intentions and expertise would be suspect. On the contrary, if he sees the agent as one who knows about other alternatives and who is willing to take note of the needs of the prospect, then that agent would have a better chance of persuading the prospect one way or the other. In other words, a life insurance agent, while dealing with the prospect, should be thinking of his interests and requirements and the best financial arrangements that would be appropriate in his situation. Thus the life insurance agent, is an agent of the prospect also.

As an agent of the insurer, the life insurance agent is expected to obtain life insurance business and contribute to the revenues of the insurer. He is also depended upon to bring in business that would be profitable, to report attempts to commit any fraud, to report on relevant features that affect the risk of the subject of insurance. He is in touch with the person to be insured. Having met him at his place of work or residence and observed his life style and habits, he would be aware of the nature and characteristics of the risk, beyond what is contained in the proposal form. He is therefore, called the primary underwriter.

As an agent of the prospect, he is expected to look after the interests of the prospect. Even people who are generally experts in financial matters, may not be aware of the implications of insurance, in relation to terms and conditions, warranties, exclusions, tax provisions, rights of parties, etc. Agents have the dual responsibility of being true to the interests of both the parties in the transaction. He is obliged to reveal to the prospect all the important terms and conditions of the policy, even if they are restrictive and unpleasant. He is also obliged to report to the insurer all the true facts about the prospect and the subject of insurance. He should not mislead either.

To be able to advise the prospect on the best financial arrangements appropriate to his situation, the agent needs to be familiar with the alternatives available in the market. He is also expected to know in full the benefits and limitations of the various plans being offered by his insurer. A good agent is a good financial planner, taking into account not merely the plans offered by insurers, but by the innumerable schemes on offer in the market. This needs study on one's own. It also needs conviction that life insurance policies do not meet all the needs of all the people. Other instruments have their own advantages.

Disclaimer: This information was obtained from the insurance-solutions information website.