Friday, August 16, 2013

Need Of A Life-Insurance Broker?

What Is the need of a life-insurance broker? Life insurance is basically a legal document or a contract that is made by two parties, the one who is insured and the one who is the insurer. In this contract the insurer makes a promise on a legal document to pay a certain designated amount of money to the beneficiary on the occasion on death of the person who is insured.

The contract has clauses according to which it may be valid or proved to be invalid. These clauses are events like terminal or critical illnesses that might be the criteria for triggering or guaranteeing payment. The person who holds a life insurance policy pays a sum of money called ‘premium', either at the start as a collective amount or regularly according to the demands of the policy he chooses.

These life insurance policies have terms and conditions that give a detailed description of the limitations of the insured person, with regard to the events that are insured in case of death. The most common exclusions that are specified in the legal contract to ensure the limitations with respect to the liabilities of the insuring party are suicide, scandals which are proved to be frauds, wars or riots and any civil commotion resulting in death.

These life-based contracts usually come under the category of ‘protection policies' or ‘investment policies'. The protection policies apply usually to give benefit on occurrence of the pre-decided event, where the benefit is usually a amount of money. Insurance policies are protection policies. Investment policies are those policies which have their main objective as facilitating growth of initial capital by premiums that are either regular or single.

In today's world there are a number of companies for providing the benefits of policies and there is enough competition in the market. Hence there comes a need of a life insurance broker. Life insurance brokers or life insurance agents are the people who negotiate or solicit the terms and conditions of insurance in exchange of compensation. A life insurance broker is considered to be the retail side of life insurance policy building.

They help the insurers by obtaining raw data from the customers and filling in the complex details in the necessary forms enabling the insurers to make a thorough assessment of the risks involved. Life insurance agents assist in printing, assembling and also delivering the policy statements and their benefits to the person insured and the beneficiaries. Therefore, in a time where insurance has become a need, a life insurance broker makes the procedure simpler by monitoring and performing risk management.

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