Understanding the Difference Between Insurance Agents and POSP
2024-12-06 16:43:44Insurance is growing fast in India. To help more people get insurance, the Insurance Regulatory and Development Authority of India (IRDAI) introduced a new way of selling insurance in 2015. This new type of seller is called a Point of Sales Person (PoSP). After some basic training and certification, PoSPs can sell simple insurance products to customers.
But how are PoSPs different from regular insurance agents? In this blog, we’ll explain the key differences between insurance agents and PoSPs.
What is an Insurance Agent?
An insurance agent is a person who works for an insurance company to help people buy insurance and manage their policies. They handle both sales and customer service. If you need to change your policy or make a claim, your insurance agent can help you. Some agents offer many types of insurance, while others focus on specific kinds, like car, home, or life insurance.
There are two main types of insurance agents: Captive agents, who work for just one company, and Independent agents, who can sell policies from different companies.
What is a Point of Sales Person (PoSP)?
A Point of Sales Person (PoSP) sells different types of insurance like health, car, and life insurance. In order to become a PoSP, one has to be at least 18 years old and has to pass a course conducted and approved by the IRDAI.
PoSPs can work directly with insurance companies or through agents and brokers. To be certified, you must register with an insurer or broker, complete training, and pass the IRDAI test with a minimum score. So if you’re looking to earn extra money or start a career in insurance, becoming a PoSP could be a good choice.
Difference Between Insurance Agents and POSPs
| Aspects | Insurance Agents | POSPs (Point of Sales Person) |
|---|---|---|
| Definition | Licensed professionals who sell and service insurance policies. | Individuals authorized to sell specific, simple insurance products. |
| Licensing | Must pass regulatory exams and obtain a license from the insurance regulatory authority. | Need to complete basic training and certification as per regulatory guidelines. |
| Products Offered | Can offer a wide range of insurance products from one or multiple insurers such as health, motor, and commercial insurance. | Limited to selling predefined, simple insurance products with low premiums such as motor, travel, and personal accident insurance. |
| Training Requirements | Require extensive training and continuing education. | Require minimal training focused on specific products they are authorized to sell. |
| Earnings | Earn through commissions; can be higher due to a wider product range and higher premium policies. | Earn lower commissions due to the limited scope and simplicity of products sold. |
| Scope of Work | Can provide advice, handle claims, and manage customer relationships. | Primarily focused on sales; limited in providing advice or handling claims. |
| Regulatory Body | Regulated directly by the insurance regulatory authority. | Operate under the supervision of licensed insurers or intermediaries. |
| Client Interaction | Can offer personalized advice and detailed product explanations. | Interactions are more transactional with less in-depth advice. |
| Sales Targets | Often have specific sales targets set by insurance companies. | May have lower or no strict sales targets. |
| Flexibility | Can operate independently or be affiliated with an insurance company. | Typically operate on a part-time or freelance basis with more flexibility. |
Conclusion
Knowing the differences between insurance agents and PoSPs helps you decide which one is right for your insurance needs. A PoSP is a simple, easy choice for simple coverage, but if you need something more complicated or if you are planning long term, an insurance agent can be very helpful.
What is a PoSP?
A PoSP, or Point of Sales Person, is someone who sells simple insurance products like health, car, or life insurance after completing basic training.
How is a PoSP different from an insurance agent?
A PoSP mainly sells simple insurance products and has less training than an insurance agent, while an insurance agent can offer more complex help with insurance policies and claims.
Can anyone become a PoSP?
Yes, anyone above 18 years can become a PoSP after completing an IRDA-approved course and test.
Do PoSPs and insurance agents work for the same companies?
A PoSP can either work directly for an insurer or through a broker or other agents. Insurance agents have to compulsorily work with a single insurance company.
Which one should I choose for my insurance needs?
If you need basic coverage, a PoSP can help you quickly. For more complex or long-term needs, an insurance agent may be a better choice.
