When Shilpa Arora needed health insurance for her husband, who has a history of ulcers, she couldn't just log on to a comparison website and choose a plan. She needed someone who knew how to speak to the underwriter, explain her husband’s medical history, and make the case for why the policy should still be issued. The right agent, she said, is someone who understands the process and can advocate for you while you're disclosing pre-existing conditions.
Arora decided to buy insurance through an agent even though she is an insurance expert herself, and co-founder of Insurance Samadhan, an online platform for resolving insurance complaints.
Most of us, however, don't think about expert advice when we buy insurance. We shop online, compare premiums on an aggregator, and choose a policy that is relatively cheap and has a high claim settlement ratio.
The role of an agent: why personal expertise matters
An insurance agent is a licensed professional who builds a local practice around selling and managing policies. Unlike online aggregators, which act as brokers and offer a broad marketplace, agents usually represent a select few insurers. Their business model relies on a long-term relationship: they guide you toward the right coverage, advocate for you during difficult claim settlements, and grow their business through consistent renewals and client referrals.
Traditionally, an insurance agent could only represent one life insurer, one general insurer and one health insurer. However, this model has evolved over time. Today, agents can obtain a point of sale person (POSP) license through online brokers to act as sub-brokers, allowing them to sell policies from multiple companies. Some even choose an insurance marketing firm (IMF) license—a middle-ground between a solo agent and a full-scale broker—to broaden their product range, said Mahavir Chopra, founder of insurance advisory marketplace Beshak.org.
"Through licences like POSP, IMF and brokers, a lot of these agents are now selling across multiple insurance companies. So the traditional restriction that agents can only sell one company’s policies is no longer a problem,” he added.
Unlike with individual agents, when you buy insurance through an online aggregator such as Policybazaar, Coverfox or InsuranceDekho, the platform is your agent, not the person who explains and sells the policy to you over the phone: he or she is just a salesperson. These platforms are licensed brokers with access to products from all insurers.
Buying directly through these platforms can generally make your premiums 2-5% cheaper, since some insurers price their direct channels lower. For someone who is financially literate and knows exactly what they want, this works reasonably well.
The true value of an individual agent becomes clear in the long gap between buying a policy and filing a claim. Unlike a call center salesperson, who may leave the company or lack a long-term commitment to your file, an agent provides consistent support. This means when you need to update your coverage, such as adding a spouse or moving to a family floater plan, you aren't forced to start over with a stranger who has no context of your history. Also, these call centre customer executives may or may not be able to challenge a claim rejection or advocate for a faster resolution with the insurer.
Chopra said the reason is they have zero skin in the game. "The salesperson who helped you out while buying the policy, his life does not change if your claim is or isn’t paid. On the other hand, an individual agent's livelihood depends almost entirely on word of mouth. Their business grows or shrinks based on whether their clients' claims actually get settled,” he said.
This accountability shapes how they work from the very start. A good agent will fill out your proposal form with care, knowing that a poorly completed form is the most common reason for future claim rejections. Arora of Insurance Samadhan described cases in which pre-existing conditions were legitimately covered under a policy, yet the insurer still rejected the claim upon hospitalisation. "These are situations that the agent should be able to handle, rather than leaving the patient alone," she said.
A good agent will understand the policy well enough to push back and, in more challenging cases, escalate the matter to the insurer's grievance team or to the regulator. “Since individual agents are tied to a few insurers, they are well connected within the companies and can even escalate claim rejection to top management,” she added.
Nishant Batra, co-founder of Holistic Wealth, recommended asking any prospective agent whether they have done exactly this, and showing proof.
Ask the right questions
Finding a good agent takes about as much effort as finding the right insurance policy. Agent discovery is a big challenge as there is no single directory or credentialing body where you can look them up. Most people find agents through social circles or local communities. Beshak is one platform that lists individual agents it has vetted itself.
Given this, it’s important to ask the right questions before choosing an agent. Ask these five questions to ensure a safe landing.
1. How many years have you been doing this?
Experts said experience matters more than credentials when finalising an insurance agent. Batra recommended a minimum of five years. Chopra agreed, adding: "If you don't have experience of three to five years, the learning curve hasn't happened.” An agent who has seen multiple claim scenarios, from straightforward to complicated, will handle yours very differently from someone who's been in the business for only a few months.
2. Can you share references from clients whose claims you've helped settle?
This is the most direct way to validate a track record. Ask specifically for customers who have been through a hospitalisation or a claim dispute, not just renewals. Chopra also suggested actually speaking to those customers, if possible.
3. Have you ever escalated a claim to an insurer's grievance team or to IRDAI?
The right way to go about this is to ask them to walk you through a specific case, ideally by sharing their screen. "Prospective clients can ask to see some of the escalations and their outcomes," said Batra.
4. Do you have a team?
An agent who operates entirely alone is a single point of failure: them may be unavailable when you need to file a claim. "If he's a single individual with no team, not even one person, that's a red flag," said Chopra.
Insurance policies are long-term, so the possibility of your agent retiring while your policy is still active is real. If this happens, you should have the option to transfer your policy to one of the agent’s teammates.
5. Two or three technical questions to test depth of product knowledge
A good way to do this is to look up a few specific policy features beforehand and ask the agent to walk you through them. Arora suggests asking about room rent capping, sub-limits on modern treatments, co-payment clauses, deductibles, and waiting periods. These are the terms that determine what is paid for and what isn’t at the time of a claim. A good agent should be able to compare two or three companies on these parameters and explain which one works better for your specific situation.
The downside: changing agents is hard
The one big challenge with working with an insurance agent is that changing them mid-policy is extremely difficult. In health insurance, the only real option is porting your policy to a new insurer. In life insurance, porting is not allowed, so you can only buy a new policy. On paper, insurance companies technically allow customers to change agents, but the process is very complicated in practice to dissuade this.
Arora said insurers are reluctant to allow agent changes because the trail commission, which is the annual commission an agent earns on renewals, is tied to whoever first sold the policy, and companies prefer to honour that arrangement.
This makes choosing the right agent critical, as you are essentially locked into that relationship for the life of the policy. While insurance is a product you hope to never use, having a dedicated advocate who understands the insurer’s nuances is vital during a crisis. Saving 2% to 5% on premiums is a poor trade-off if it leaves you to navigate a complex, high-stakes claim without professional support.