Is your insurance advisor giving the right advice?

Buying insurance is undoubtedly one of the most important decisions of one’s life. Charting the unfamiliar terrain of insurance is tricky for most of us, which is why receiving the correct advice makes all the difference. Your insurance agent or advisor serves as your primary source of information and guidance. While your agent will typically have your best interests at heart, there have been unfortunate incidents of duping and mis-spelling.

Before engaging an insurance agent or a point of a salesperson (PoSP) to buy a policy, ask yourself the following questions to gain clarity on what it is that you seek in an insurance policy:

-What are my current and future financial needs?

-Who can recommend a reliable insurance advisor?

-What is my premium amount limit?

Answering these questions serves as a reconnaissance before you commit to an insurance policy through an advisor. In your search for the right insurance product, you may end up meeting advisors from various insurance companies and intermediaries. Here’s how you can tell if an agent is giving you the right advice.

Done their research

Every individual has different insurance needs. A committed agent will do their homework before pitching insurance products to potential customers. Look for agents that are knowledgeable about various products within your category and ask them as many questions as you want before you can comfortably hand over your insurance profile. The right advisor will understand your financial needs, your premium paying capacity and they ought to pitch a product that best fits your criteria. As the word suggests an insurance advisor, should primarily take on a consulting role rather than pushing a product for personal gain.

Listens to your concerns

An insurance advisor must have exceptional people skills and must be someone who will put your needs first instead of pushing a product that they think is best for you, with the motive of doubling up on their commission.

A good insurance advisor is tactful and capable of empathizing at a deeper level with their customers to form meaningful relationships. Having an advisor who forms a pleasant relationship benefits both parties as you most likely approach them for your future insurance needs and they offer the right advice and solution for your insurance-related queries.

Does not push a single brand

The introduction of the POSP model by the IRDA changed the insurance sales landscape in India. Previously an agent could sell either life or general insurance products from a single insurance provider but now POSPs can sell all insurance products from a multitude of insurance companies. They can generate quotations from different insurers and offer customers the quote that best suits their needs.

This provides customers with a more optimal range to choose from. If an agent isn’t offering options in terms of insurance products or insurers, it’s most likely that the commission on that product is higher than others. Therefore it is always advisable to be vigilant about the product you are getting and the premium payout.

For example, it may be profitable and easy for an agent to sell you a Unit-Linked Insurance Plan by a certain brand for a short term of five years.

Technically, there is nothing wrong with this pitch but if you do a quick search online, you will find that ULIPs are oriented towards investment rather than pure life cover. The agent may have sold it because the commission they earn on ULIPs may be higher.

Customer Service

You can gauge an insurance advisor’s customer service levels by taking their contact details and reaching out to them with queries to check response time and quality. Someone you thought listened well and understood your needs may not offer your the desired level of service after they’ve sold a policy to you. Ask your advisor for references you can talk to and check customer ratings and reviews on their company’s website before taking out a high-value insurance policy through them.

Alternatively, you can take a small, low stake, short-term policy through a shortlisted agent and gauge how they treat their low-profile clients. This will provide insights into their customer dealings and ethics.

They are honest

Insurance agents who tend to use deceptive tactics to close dodgy deals, seldom stay with one organization for very long. Before committing to an agent for a long-term policy, ask questions about their previous work experience, the companies they have worked with and their reason for leaving a certain organisation. This will give you an idea of the duration the agent has spent with each insurance provider. You may want to steer clear if the agent has been changing companies frequently.

The bottom line

These are a few qualities you must look for in an insurance advisor. People must also remember that they have been given the power of the internet today which has made the entire process of choosing a policy more transparent. A dubious agent cannot get away with unethical tactics easily anymore. Harness the internet before committing to an agent’s push strategy. Choose wisely!

(The writer is Co-founder & Chief Executive Officer, Symbo Insurance)