{"id":11362,"date":"2022-07-13T06:44:54","date_gmt":"2022-07-13T06:44:54","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=11362"},"modified":"2022-07-13T06:44:56","modified_gmt":"2022-07-13T06:44:56","slug":"general-vs-life-insurance-broker","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/general-vs-life-insurance-broker\/","title":{"rendered":"General vs Life Insurance Broker: Key Differences"},"content":{"rendered":"\n<p class=\"has-drop-cap\">In India, the Insurance Regulatory and Development\nAuthority is the body authorised to issue insurance broker licenses under the\nIRDA Act, 1999. As the insurance sector is booming, these regulations help the\ngovernment keep track of and supervise the insurance brokers. Insurance Brokers\nare entities who offer various types of insurance to consumers and assist them\nin selecting a plan which shall be suitable for them based on their needs.\nThese brokers provide their clients with consultancy services, Risk management\nadvisory and help them settle their claims, brokers extend these services on\nremuneration or payment of a fee. In this blog, we will discuss the differences\nbetween General vs Life Insurance Brokers.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3ac701cfcfe\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3ac701cfcfe\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/general-vs-life-insurance-broker\/#Types_of_Insurance_brokers\" title=\"Types of Insurance brokers\">Types of Insurance brokers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/general-vs-life-insurance-broker\/#Explanation_General_vs_Life_Insurance\" title=\"Explanation General vs\nLife Insurance\">Explanation General vs\nLife Insurance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/general-vs-life-insurance-broker\/#Understanding_the_differences-_General_vs_Life_Insurance_Broker\" title=\"Understanding the\ndifferences- General vs Life Insurance Broker\">Understanding the\ndifferences- General vs Life Insurance Broker<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/general-vs-life-insurance-broker\/#Conclusion\" title=\"Conclusion:\">Conclusion:<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Insurance_brokers\"><\/span>Types of Insurance brokers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Insurance\nbrokers can be subdivided into five categories theses are:<\/p>\n\n\n\n<p><strong>1. Direct\nBroker<\/strong><\/p>\n\n\n\n<p>1.1. Direct\nbroker (Life) insurance&nbsp;<\/p>\n\n\n\n<p>1.2. Direct\nBroker (General) insurance<\/p>\n\n\n\n<p>1.3. Direct\nBroker (Life and General)<\/p>\n\n\n\n<p><strong>IRDAI issues licenses<\/strong><sup><a href=\"https:\/\/irdai.gov.in\/ADMINCMS\/cms\/frmGeneral_Layout.aspx?page=PageNo67&amp;flag=1\" class=\"text-primary\"><strong>[1]<\/strong><\/a><\/sup> to direct brokers. These brokers later get acquainted with the needs of various clients and bring forth these requirements to an insurer. The direct broker also advises clients to pick up an appropriate policy after making a note of their needs. Direct brokers always act on their clients\u2019 instructions, keep track of their insurance records and help them settle their claims. The minimum amount required for the registration of a direct broker company is Rs.75 Lakhs, and they are required to maintain a net worth of Rs.50 Lakh.<\/p>\n\n\n\n<p><strong>2.\nReinsurance Broker<\/strong><\/p>\n\n\n\n<p>Reinsurance\nbrokers are insurer\u2019s insurers, i.e. they extend insurance to Direct insurance\ncompanies. These brokers require a minimum capital of Rs.4 crore, and they need\nto maintain a net worth that shall be 50% of the capital requirement.<\/p>\n\n\n\n<p><strong>3.\nComposite Broker<\/strong><\/p>\n\n\n\n<p>Composite\nbrokers are a mix of both the entities- Direct brokers and Reinsurers. They\nplay both roles. The minimum capital required by composite brokers is Rs.\n5crore minimum, and they need to maintain a net worth of 50% of the minimum\ncapital requirement.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Explanation_General_vs_Life_Insurance\"><\/span>Explanation General vs\nLife Insurance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Under the direct\nbrokers, General insurance and Life insurance are two of the most prominent\ntypes of insurance in the sector. Still, people are not aware of the\ndistinction between General vs Life Insurance. We shall first deal with each\ntopic individually, then compare both.<\/p>\n\n\n\n<ul><li><strong>Life insurance&nbsp;<\/strong><\/li><\/ul>\n\n\n\n<p>Life insurance,\nas the name suggests, is a policy which shall cover your life. Life insurance\nis useful as it secures the family of the nominee in case of his death.\nHowever, in some situations, they also act as an investment option. There are\ndifferent types of Life Insurance. Some of them are enumerated below.<\/p>\n\n\n\n<ol><li><strong>Term\nlife insurance: <\/strong>In this type of life insurance, the insured individual is covered for a\npre-defined period. If an individual dies during this period, his family\nmembers can claim insurance money.<\/li><li><strong>Complete Life Insurance:<\/strong> A completed life insurance is not limited to a fixed\ntenure or a definitive period. It is valid till the entirety of the\npolicyholder\u2019s life. The claim for this plan can only be made after the\npolicyholder passes away. The nominees cannot claim the amount under this head\nas long as the policyholder is alive.<\/li><li><strong>Unit\nLinked Insurance Plans:<\/strong>&nbsp;This\nis a Hybrid policy wherein half of the premium paid by the policyholder is\nutilised for insurance cover, and the rest is invested in the securities\nmarket. Such policies get you the best of both worlds as they will help you\nmake a significant investment and provide you with the benefits of life\ninsurance as well.<\/li><li><strong>Endowment plans:<\/strong> Endowment plans are also insurance cover plus an\ninvestment tool. Under this plan, a part of the premium is utilised to give the\npolicyholder the sum assured, whereas the rest of the amount is invested. In\ncase the insured individual outlives the term mentioned in the policy then he\nshall receive both the sum assured and the investment bonus. On the other hand,\nif the person dies prior to the date of maturity, then he shall be given the\nsum assured only.<\/li><li><strong>Money Back:<\/strong> In a money-back plan, the policyholder will receive\nreturns at a fixed time interval, and the beneficiary does not have to wait for\nthe policy to mature. For example, an individual under the money-back guarantee\nshall receive benefits from 5 years, 10 years, 15 years post the date of\npurchase, but this can vary from policy to policy.&nbsp;&nbsp;<\/li><\/ol>\n\n\n\n<ul><li><strong>General Insurance&nbsp;<\/strong><\/li><\/ul>\n\n\n\n<p>Let\u2019s move on to the next aspect of our discussion on General vs <a href=\"https:\/\/swaritadvisors.com\/insurance-broker-license\" class=\"text-primary\"><strong>Life Insurance Broker<\/strong><\/a>. Unlike Life insurance, general insurance extends cover to other aspects of a person\u2019s life. It covers things such as health, travel, insures property against theft, accidents, disasters, etc. General insurance helps minimise the risks that might happen to a person\u2019s physical assets and well-being. Different types of General insurance are listed below:<\/p>\n\n\n\n<ol><li><strong>Health\nInsurance:<\/strong> due to\nstressful lives and improper nutrition, many people are susceptible to various\nailments. Along with this, the rising medical and hospitalisation expenses have\nmade it essential for an individual to have a health insurance plan. A plethora\nof health insurance are available in the market, which covers not only the\nindividual but also their families.<\/li><li><strong>Home\nInsurance:<\/strong> Home insurance\nsecures a policy holder\u2019s home against damages that can be caused due to\nnatural calamities like fires, floods, earthquakes etc. it also extends to acts\nsuch as theft and riots also, in which the house or the assets inside it can\nget damaged.&nbsp;<\/li><li><strong>Motor\nInsurance:<\/strong> Motor Insurance\nhelps to safeguard a person\u2019s vehicle against accidental damages, theft,\nterrorist attacks, riots or natural calamities. The Motor vehicle act has\nstated that a third-party insurance is a bare minimum that person needs to have\nbefore operating a vehicle.&nbsp;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Understanding_the_differences-_General_vs_Life_Insurance_Broker\"><\/span>Understanding the\ndifferences- General vs Life Insurance Broker<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following\ntable shows the distinction between General vs Life Insurance Broker<\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  <strong>Basis<\/strong>\n  <\/td><td>\n  <strong>Life Insurance<\/strong>\n  <\/td><td>\n  <strong>General Insurance<\/strong>\n  <\/td><\/tr><tr><td>\n  Meaning\n  <\/td><td>   It only deals with the life of a person and the risks forborne with it.   <\/td><td>\n  It deals with aspects such as physical well-being\n  and other assets of the insured\n  <\/td><\/tr><tr><td>\n  Category\n  <\/td><td>\n  Life insurance is treated as a future investment.\n  <\/td><td>\n  General insurance is a contract of indemnity, here\n  the insurance company saves the other party on account of loss borne by him\n  <\/td><\/tr><tr><td>\n  Duration \n  <\/td><td>   Life insurances are long term such as 10 years, 15   years, etc.   <\/td><td>   General insurances are considerably for a shorter period of time, usually for 1- 3 years.   <\/td><\/tr><tr><td>\n  Payment\n  <\/td><td>   The premium is paid in installments   <\/td><td>\n  Premium is paid in a lump sum- at one go.\n  <\/td><\/tr><tr><td>\n  Claims\n  <\/td><td>   The insurance amount is received whether on maturity or on the happening of an event which in this case is the death of the policyholder.   <\/td><td>   Under general insurance, the company shall either reimburse the loss or repay the liability in case of mishaps.   <\/td><\/tr><tr><td>\n  Insured (person\/property) \n  <\/td><td>   The insured must be present at the time contract is being entered into.   <\/td><td>   The property must be present at the time of contract and after the loss as well.   <\/td><\/tr><tr><td>\n  Value of the policy.\n  <\/td><td>   The value depends on the policy that an individual has opted for.   <\/td><td>   The amount received is equal to or proportionate to the loss incurred.   <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The major difference between General vs Life Insurance Broker is that the Life insurance only deals with the aspect of the life of a human being, whereas General Insurance covers a wider spectrum in which facets such as physical properties such as cars, homes etc. along with an individual\u2019s health are things that are insured.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In India, the Insurance Regulatory and Development Authority is the body authorised to issue insurance broker licenses under the IRDA Act, 1999. As the insurance sector is booming, these regulations help the government keep track of and supervise the insurance brokers. Insurance Brokers are entities who offer various types of insurance to consumers and assist [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":11367,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[44],"tags":[1045],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11362"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=11362"}],"version-history":[{"count":5,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11362\/revisions"}],"predecessor-version":[{"id":11369,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11362\/revisions\/11369"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/11367"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=11362"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=11362"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=11362"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}