Insurance Broker vs Agent: What Is the Difference?
Insurance is a rapidly growing industry in India. Awareness about the importance of insurance has also increased in the last few years. With better accessibility and more tools at their disposal, a larger number of people are now looking to buy insurance. The Insurance Regulatory and Development Authority of India (IRDAI) came up with a new model for insurance distribution in 2015 to meet this increasing demand. This new model aims to enhance the penetration of insurance in the country.
The model also gave birth to the concept of Point of Sales Person (PoSP). A potential policyholder looking to buy a simple form of insurance can do so through a PoSP.
So how exactly does a PoSP differ from a traditional insurance agent? The primary difference between an insurance agent and a PoSP is that an insurance agent can sell complex, customisable insurance policies while a PoSP can sell basic, pre-underwritten insurance products.
There are also certain differences that can be observed in the training of a PoSP versus that of an insurance agent. PoSPs undergo basic training and certification, after which they can sell a variety of insurance products that have been underwritten previously to their customers.
PoSPs need a minimum qualification of just being a 10th standard/grade pass-out to qualify. PoSP training and certification is also basic and easy to follow for beginners who may not have in-depth knowledge of insurance products. The minimum age limit to become a PoSP is 18 years. It is an ideal choice for people looking to enter the industry and start a flourishing career.
There are various other differences between a PoSP and an insurance agent.
Let’s look at the differences in detail
You can easily become a PoSP with ICICI and create an illustrious career in the insurance industry. As an ICICI PoSP for insurance, you can sell pre-underwritten insurance policies, provide insurance solutions to potential clients, and function as an insurance advisor. Click on the link to check the steps on how you can become an insurance posp agent.
FAQs on Insurance Agent VS PoSPs
1. What is the difference between an insurance agent and a PoSP?
An insurance agent can sell high-risk insurance policies to the customer. These policies can have a high sum insured and can be customised as per the customer’s needs. Insurance agents also deal with claim settlements and work mostly in urban areas. On the other hand, a PoSP sells a variety of basic, uncomplicated insurance policies to people in diverse geographical regions.
2. What is the range of the PoSP insurance agent commission?
The commission depends on the kind of policy you have sold. For a health insurance policy with a premium of Rs 8000, you can earn a commission of around 15%, which is Rs 2250. Your total earnings depend on the number and kinds of policies you sell.
There is no maximum limit. The more policies you sell, the higher will be your earnings.
3. What are the benefits of becoming an ICICI PoSP?
As a PoSP, you can work on your own time frames, right from the comfort of your home. You can sell as many insurance policies as you want, without the obstruction of a limit. Another benefit is that there is no investment required.
4. What is the difference between PoSPs and insurance brokers?
A PoSP is an individual who primarily sells insurance policies. Insurance brokers are companies offering consultancy services to customers to help them pick the right insurance provider and company as per the risks involved.
| Aspects |
Insurance agent |
Broker |
| Finalising insurance sale |
An insurance agent is licensed to complete the sale and sell insurance policies directly. Once the customer has chosen a policy, they do not reach out to any other party to complete the sale. |
A broker has to connect with an insurance agent to finalise the sale they have made. |
| Earnings |
An insurance agent earns on the basis of commissions. In the case of full-time agents, a salary aspect may be present. |
Brokers earn primarily on the basis of commissions. |
| Representation |
A PoSP or an insurance agent represents the insurance company that they are working with. |
A broker represents the buyer. Their first duty is towards understanding the buyer’s needs and then providing the policy that meets those needs. |
| Qualification and licensing |
Before becoming an insurance agent and selling insurance, one must qualify for the IRDAI exam and undergo a 15-hour training process. Post this, one receives a license to become an insurance agent. |
Brokers have to undergo relevant courses from private institutes. A license from IRDAI is required to function as an insurance broker. |