The art of choosing an insurance adviser

A step by step guide to getting the insurance advice that fits your needs.

artical img

Insurance is like the back-up plan you make with one of your friends of the opposite sex; the one where, if you are both still single at 35, you will get married to each other. You don’t really want to have to use this plan, but it sure is good to have, just in case. Choosing the right insurance adviser is as important as choosing the right plan.

Picking the insurance plan, that is just right for you, is like figuring out a brand new gadget. It may seem simple on the surface, but can get quite complicated.

There are so many different types of insurance like life, health, motor, car, travel, property, home, and so on. First, you need to know the type of insurance you require. Then you need to figure out the insurance plan that is best suited for you, within the type of insurance.

For example: Let’s say you need life insurance; then there are various life insurance plans for you to choose from such as a term plan, endowment plan, ULIP (Unit Linked Insurance Plans), money back policy and whole life policy. The premium you pay each month, and the returns you receive, will depend on the type of policy you take.

Confused? Don’t worry. This is where your insurance adviser comes in. A good adviser will help you navigate through this storm of plans and bring you safely to harbour.

As you can see, choosing the right person as your adviser is of utmost importance. But, how do you choose one?

Flipping a coin might not be the best solution. What you need to do is to arm yourself with some basic knowledge and key points when taking insurance advice.

First and foremost, know whether you are investing through an adviser or an agent.

• Difference between an agent and adviser
An insurance agent is someone who is affiliated to a particular insurance provider. An agent will earn a commission which will be a percentage of the policy you purchase through them. Due to this, an agent may not necessarily suggest policies to you that are in your best interest.

Usually a financial adviser is the one who also gives insurance advice. They receive a fee solely advising you. This person will analyse your financial needs and situation to suggest the insurance plans, that fit your requirements. They do not have a vested interest in the policy you purchase, so they can be relied upon for unbiased advice.

Some Dos and Don’ts when you get insurance advice.

• Do not make your financial adviser your agent, too
Financial advisers are often asked to help with procuring the insurance policy. In this case, the adviser will earn a commission from the provider on the policy you get. This may create a conflict of interest for your adviser and may result in subpar advice.

• Create a wall between your adviser and your policy procurement
Make it clear to your financial adviser from the beginning that you will take insurance advice and not purchase a policy through them. Once you have decided on the plans with the help of your adviser, you can purchase the policy online, or through an agent.

Some key questions you must ask your insurance adviser/agent.

• How much insurance do you really need?
• What type of policy suits you best and why?
• How much is the commission on the policy?
• How often will the policy be reviewed?

All of this means that it may take slightly longer and maybe cost a you a bit more to get insurance. But, getting insurance is like getting married. It is better to take your time than get stuck with the wrong person or in case of insurance, the wrong policy.

Disclaimer: The views and opinions expressed in this article are for informational purposes only. The authors and publishers are not responsible or liable in any manner for any actions you might take relying on the contents of this article.


Get unlimited investment tips.

Free Forever.