Is your insurance agent okay?

Some people think it doesn't really matter where they buy insurance or not. But this misconception could cost them money, service and protection.

Buying insurance isn't like buying bread or milk. Insurance is an important safety net for your family, your home, your car or your business. Don't treat the purchase lightly.

The fact is that you have to depend on your agent: he identifies the right policy for you, collects the premium cheques from you when they are due, and is your insurance newscaster. In short, he is more often than not the sole link between you and the insurance company.

There are approximately 890,000 of them to choose from-and the idea is to identify the con artists and put them at an arm's length before they get you. An unscrupulous agent could sell you the wrong policy, or lie that he got you a loaded premium or encash the premium cheque in his favour, or be untraceable when needed.

The insurance companies won't share the blame. At most, they will terminate the services of the agent. And he will join the ranks of more than 100,000 agents the Life Insurance Corporation debars every year.

The main reasons are failure to meet business quotas and alleged malpractices. But the termination will not solve your problem. It will only aggravate it, for you have to find a new agent, get hold of old records, tally the numbers and recalculate premiums.

The first step in this direction is selecting an agent or broker. One of your best resources in selecting that individual is an already satisfied client.

Ask your relatives, neighbors or co-workers about their agent, their insurance company and the quality of service and professionalism their agents offer. Have they experienced a 'claim'? How did their agent and company respond? Has their agent been courteous and prompt in responding to their questions and needs?

Did their agent take the time to fully explain the terms and conditions of their policies? Does their agent periodically contact them to update coverage? These are all excellent questions to ask when selecting someone to protect you, your family, and your assets.

A survey by the Independent Insurance Agents & Brokers of America (IIABA) found that three out of four insurance consumers use an agent when purchasing personal insurance. More than half the respondents over age 55 had purchased insurance from the same agent for at least 20 years. More than 60 percent said they value the opportunity to discuss their insurance with a real person.

Go for a full-timer

Just ask him if he is a professional agent-a full-timer, in other words. There are many amateurs, part-timers and proxies masquerading as authorised agents in the business, hoping to make some money on the side. Many have less than a year's experience. Any undergraduate can become an agent. Buy policies only from professional agents.

What if the agent says he is a full-timer and you are still not convinced? In that case, ask when he is available for his clients. If it is before or after normal office hours, you can be sure he is a part-timer. Non-availability during these hours is fine only if he gives an ICICI, HDFC or LIC branch number where he can be contacted during the day.

Be particular to check that he is not acting on somebody's behalf. Ask him if he has an office? If he has an address he calls office, he means business. If it is 'at this number between 10 a.m. and 2 p.m., and after 6 p.m. at my residence,' he is not the person you want.

How many years have you been in the profession? If the answer to the last question was in the affirmative, ask him how long he has been an agent. An undergraduate could get in and out of the profession inside a year. Or work for five years to qualify for renewal commissions. Remember, your policy term will be longer than that.

Experience in claim settlement

Does he have experience of claim settlement? A 'claim' occurs either on maturity of the policy or on the policy-holder's death. The market giant is fairly prompt in discharging maturity claims, the private players are coming into the picture slowly.

To ensure prompt disbursal of maturity claims, your agent must remember exactly when it is due, and make a few queries at the branch at the right time. However, successful death claims are the true measure of an agent's resourcefulness and ingenuity in arguing cases.

Be choosy

Now if you have selected your agent and worked out the insurance sum amicably, he will advise you on the policy that best suits your needs. Don't rely only on his words and buy the policy.

Ask why he advises one, or rejects another. This would help you in knowing the policies and how they work, but if your agent is good, you wouldn't need to. You could also ask for a written proposal and cross-check with another agent.

Cross check the premium

Check about the premium he says you have to pay on your policy. The rebate you are entitled to depends on your age, health, the policy term and the sum assured. Did he ask if you are medically fit, whether you have had a bypass surgery? If he hasn't, chances are the premium amount is inaccurate.

Alternatively, he might have randomly provided for illnesses and disabilities where none exist, in which case you would be paying more than required. Insure yourself against such possibilities by verifying with other agents, or in a branch office.

If you are giving the premium cheque to your agent, make sure the cheque is made in favour of the insurance company, and the policy number is written overleaf. Never pay cash. Check your bank statement to see how promptly he deposits the cheque. Always, as a rule, insist on receipts.

IRDA code of conduct for agents

Every person holding a license shall adhere to the code of conduct specified below.

Every insurance agent shall:

• Identify himself and the insurance company of whom he is an insurance agent;
• Disclose his license to the prospect on demand;
• Disseminate the requisite information in respect of insurance products offered for sale by his insurer and take into account the needs of the prospect while recommending a specific insurance plan;
• Disclose the scales of commission in respect of the insurance product offered for sale, if asked by the prospect; 
• Explain to the prospect the nature of information required in the proposal form by the insurer, and also the importance of disclosure of material information in the purchase of an insurance contract;
• Bring to the notice of the insurer any adverse habits or income inconsistency of the prospect, in the form of a report (called Insurance Agent's Confidential Report) along with every proposal submitted to the insurer, and any material fact that may adversely affect the underwriting decision of the insurer as regards acceptance of the proposal, by making all reasonable enquiries about the prospect;
• Inform promptly the prospect about the acceptance or rejection of the proposal by the insurer;
• Obtain the requisite documents at the time of filing the proposal form with the insurer; and other documents subsequently asked for by the insurer for completion of the proposal;
• Render necessary assistance to the policyholders or claimants or beneficiaries in complying with the requirements for settlement of claims by the insurer;
• Advise every individual policyholder to effect nomination or assignment or change of address or exercise of options, as the case may be, and offer necessary assistance in this behalf, wherever necessary.