The phrase broker traditionally refers to a person or entity that acts on behalf of the buyer or client which is known as the principle. The broker uses their particular knowledge and expertise to suggest the client on certain decision generally pertaining to purchasing and trading. The broker can either play an advisory role or may also have full purchasing and decision making power in order to act on behalf of the client or rule.
The most commonly found form of brokers are investment brokers and product brokers. People who wish to invest their particular money and trade in goods seldom have the knowledge and time for you to manage their investment portfolio’s closely so they employ broker’s such as these who have a lot more insight and expertise to do something on their behalf. There are however many other types of brokers who also provide people with their inputs of knowledge and expertise. Various other examples of brokers include business brokers, Forex brokers, real estate brokers, insurance brokers and many more.
The term insurance broker is nevertheless a very vague one. In the past insurance brokers were just like any other agent, but specialising in insurance policies. They might act on behalf of the principle/individual who also employed them in order to investigate various insurance options from various insurance providers in order to secure the best deals for that principle, as well as help interpret specific formalities within insurance contracts. A trend eventually developed in which insurance plan brokers did not necessarily look out for the best interests of the principle and would favour certain insurance companies. In fact a lot of insurance companies posed as brokers in order to obtain the preference of deceived plus uninformed individuals. As a result the term insurance broker has developed into one with a much wider meaning. Today an insurance broker is essentially seen as any person who acts as a real estate agent to insurance on behalf of the theory, irrespective of whether the agent is performing in the interest of the principle or even in the interest of a particular insurance provider.
In reality the term insurance broker is hardly ever used to refer to an agent who is employed by individuals seeking the best insurance plan offers. Today it is more precisely applied to employees of insurance companies who also represent the clients of that company. Insurance brokers still represent insured individuals, but instead they are hired by insurance company itself to handle the statements, legalities and transactions between the covered and the insurance company. Therefore most brokers represent only one insurance company and take action in the interests of the insurance company which they represent. The broker essentially will act as an intermediary which communicates the interests of the insured to the insurance provider, manages the procedures of protection and ensures that the insurance contract is usually adhered to
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