Many people opt to become Insurance Agents – which is a full time profession. They are supposed to solicit Insurance by meeting prospects and convincing them to buy insurance.
Really wonder, how many of us really try to understand the role and responsibilities of Insurance Agents. Many times, they are part of family and trusted with their honesty, sincerity and integrity. But some time, you meet agents who are part of mis-selling and frauds. But Industry knows that one cannot survive in this business of trust for long unless one have opted the path of honesty. Because, this business needs new prospects and strong reference.
Who is Insurance Agent?
“An insurance agent is a person who works for an insurance company and sells the insurance products of this company.”
How many types of Insurance Agents?
There are 2 types of insurance agents:
- Captive agents typically represent only one insurer.
- Independent insurance agents typically represent more than one insurer.
In India, Insurance Agents are defined by section 2(10) of Insurance Act 1938. The definition says:
“Agent licensed under section 42 of Insurance act who solicits insurance new business by collecting Proposal Form and premium. Agents get compensated by commission as governed by Insurance Act and IRDA rulings.”
Section 2(11) of Insurance Act defines Insurance Business for an agent:
- Contracts of insurance on human life
- Pension and annuity contract
- Rider benefits
Please note that agent’s duty does not involve collection of renewal premium but they do it so that they build relation with client.
Also Read: Common Mis-Selling techniques of Insurance Agents
An agent is not authorized to conclude the contract. Agent duty is limited to collect the Proposal form along with payment. Agents need an initial training of 50 hours and get licensed after passing an examination. Agents work under a contract with Insurer, This contract is valid for three year and need renewal.
Any one above age 18 and 10th class qualification can become agent. This easy entry creates problems for industry. Agency is very responsible business where regular coaching and mentoring is required. Surprisingly, 70% of new agents leave business in first one year leaving large client base. After 3 years, only 10% of agents survive in the business. This large client bases which has bough policies from such agents are the easy targets of fraudsters and tele-callers. This unattended population does not know where to go as agent has left the business and fall in the trap of mis-selling. Some examples of such mis-selling is given below:
Examples of Insurance Mis-Selling
- Would you like to get back commission earned by your agent? As you agent has left, this commission is with IRDA?
- Would you like to get back your unclaimed bonuses? This is unclaimed fund, you must have it else it will be forfeited.
- Your previous policy was bad, why don’t you change with new one?
Ecosystem of Insurance Business need good agency system who opts for this business for long time. Good agents work on referral and good will. Their customers never fall to the trap of tele callers and would always seek clarifications. There are agents who are working for generations and there are some whose all family is involved.
Insurance Samadhan advocates good, stable agency who works like Doctors by doing financial health check-ups before recommending insurance solutions.
Only agents build relations with family, service then for life time and review their insurance needs after every milestone.
Insurance Samadhan already helped resolve over 13,500 customer grievance cases related to all types of Insurances, ULIPs and other financial products.
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