When purchasing insurance it is always important to investigate a number of policy options that may provide appropriate coverage. Assessing which policy is most suitable can be based on premium, benefits provided or other factors. However, it always helps to understand what entity one is dealing with while shopping for insurance in order to be clear about what their responsibilities to the potential client are.
There is always the option to buy directly from insurance companies, and many now have or are developing online resources to facilitate your ability to find information on plans and buy insurance online. In making an informed purchase, customers will have to take it upon themselves to research products from other insurance companies and be able to understand the policy terms and conditions well enough to weigh the premium and benefits between plans from different companies.
The other entities that you can purchase insurance from are insurance intermediaries, which can largely be divided between two camps. Insurance intermediaries will typically either be insurance agents or insurance brokers and while both can sell you insurance each will operate on a slightly different basis and have different responsibilities to the potential client.
Insurance agents or agencies will tend to have a contract with one or a number of insurance companies to sell their products. Agents or agencies that sell only one insurance company's products are often called captive agents, whereas agents that have contracts to work with policies from a number of insurance companies are often referred to as independent agents. As independent agents work with a number of insurers, they may be able to offer you comparisons of the plans they work with. Generally speaking, insurance agents are only obligated to ensure that paperwork and premiums relating to your policy are handled in a timely and accurate manner, meaning that the responsibility of fully understanding the plan and its benefits still lies with the prospective client.
Insurance brokers on the other hand typically hold terms of business with a broad variety of insurance providers and must hold a brokers license from the relevant regulatory body. This will generally mean being more knowledgeable about and familiar with the insurance products they sell in order to pass the examination for the license. Brokers will typically have an obligation to their clients to advise them on insurance policies which will sufficiently cover their needs. Given the breadth of plans and insurers that many insurance brokers deal with, they will often be able to provide clients in-depth advice and explanations so that the prospective client has a fuller understanding of what benefits a plan contains and how they may apply to the client.