Heard the terms “insurance agents” and “brokers” being thrown around and don’t quite know what they mean? No worries – I understand they’re not quite intuitive, especially if you don’t have any exposure to insurance as a concept.
Although it seems most people are obsessed over insurance these days, it’s fully natural to be missing out on its potential benefits. That works in your disfavor, however, since insurance is a worthwhile shield against potential surprises and catastrophes.
If you’re interested in finding out more about the topic, then read on. I’ve provided a very quick and simple breakdown as to what insurance is further down!
What Is Insurance?
Simply put, insurance is when you reach an agreement with a company that offers financial compensation against possible losses and eventualities. Health insurance, for example, is able to cover any medical costs incurred from harm, injury, or disease.
Depending on circumstance and scenario, it can be argued that almost everyone needs some degree of insurance. Indeed, most people who are employed benefit from some type of insurance deal as garnered by their employer, such as health insurance, which is typically the most frequently possessed.
On the other hand, there is also a category of people who need insurance more than others. The hosts of events – like social gatherings, concerts, or ballroom dances – are always expected to protect themselves from what might be a career-ruining scenario with insurance.
The thing with insurance is that it’s always better to have it than not. While you are expected to pay a “premium,” which is the fee you must initially pay to be eligible for the insurance package, it is almost always significantly cheaper than paying out of your pocket when disaster strikes.
As you know, even a sprained ligament has the potential to financially ruin you depending on what US state you’re from. Having insurance, on the other hand, will pay off your medical fees, allowing you to recover without worrying about poverty and homelessness as well.
Despite our best hopes and intentions, the world always finds ways to surprise us in the worst ways. We can live healthy all our lives, never drink, never smoke, never curse, and never raise our voice in anger, only to get temporarily blinded by a flashing car, trip, break our spines, and be bound to a wheelchair for the remainder of our years.
Insurance Agents vs. Brokers
It’s not clear at first glance about the difference between them, so let me clear it up for you.
To start off, both are professionals who work in the insurance business. An agent is supposed to help sell an insurance company’s products or services to consumers in exchange for a commission. So, in short, they’re quite close to what we would consider salespeople.
Although it depends from business to business, most insurance agents function the same. “Captive” insurance agents work for and represent a single insurer, while there are also independent agents that collaborate with several insurance companies as well.
An insurance broker, on the other hand, can be considered as working for their direct client instead of an insurance employer. As such, they are usually hired to help clients find an insurance company that would best reflect their needs and requirements.
So if an insurance agent works for an insurance company and tries to sell their services to the consumer, an insurance broker works for a potential consumer, trying to find which services would be best for them.
Most people are contacted by insurance agents or independently contact insurance companies themselves when purchasing a package. Consumers with specific or high business needs, however, are more likely to contact professional insurance brokers instead.
Insurance? Yes Please!
It doesn’t matter if you’ve always been healthy, wealthy, and lucky. At one point or another, the world is going to throw you upside down, and you’ll have wished you had insurance. Don’t regret it when it’s too late and protect yourself early instead!