Student Article / Comerce

Insurance Advisor

Insurance Advisor

Assistant Editor

05 Feb, 2019

What is Insurance? Insurance is a contract, that is represented by a policy between an individual and an entity and the Insurance Company by which the individual or the entity receives financial reimbursement against loses from the Insurance Company. It is something that people buy to save themselves from losing money. When one buys insurance he/she needs to pay a "premium" which is often paid on a monthly basis or at times annually for various reasons like home, vehicles, business and in case of any unforeseen incident the Insurance Company compensates for the loss. 

How did Insurance Industry start? It is said the Great Fire of London on the 2nd of September, 1666 was the reason behind formation of the Insurance Industry. London had a very poor history with fire. There had been much fire that ravaged London. However, the fire that started in a baker’s shop in pudding lane quickly spread and burned one of the huge wooden waterwheels on Thames that supplied water to the city. As the waterwheel burned there weren’t enough water supplies to douse the fire and it spread and ravaged the city for 5 days. Structure after structure burned down as hapless citizens watched. By the time the fire died out the city stay ruined. After the great devastation the city started rebuilding itself as if rising from its ashes like the mythical Phoenix, was the world's first Insurance Company.

Nicholas Barbon M.D was a successful doctor who was also a prolific writer and economist. After the great fire of London he got involved in the reconstruction of the city. As a writer and economist most of his writings were about wealth, value and similar topics. He was also concerned about the wealth that he had amassed and feared losing them to yet another fire disaster. In the year 1667, Dr.Barbon was instrumental in forming the first ever actual Insurance Company known as “The Insurance Office” which was a small office located right behind the London's Royal Stock Exchange. This company was formed to protect the houses and other buildings that insured with them. The New Insurance Office came up with their own fire fighting team with equipments and badges for identification. Their sole job was to put the fires out of the building that were insured with them. Soon other insurance companies followed. The houses were earmarked with fire marks made of tin with signs of the respective Insurance Company’s mounted on the eaves, which was the way respective Insurance Companies could identify the houses insured with them. The idea was cumbersome, as individual companies would watch each other dousing the fire as people had insured themselves with different companies. So one week it would be Company X dousing the flames while Company Y would remain as spectators and vice versa. The whole idea of insurance run fire department was totally disastrous. However, the final outcome was the municipal fire departments that came into existence. All the insurance companies donated their fire fighting equipments to the city. New fire fighting department was setup with dedicated firefighters who were stationed at various locations to fight fire irrespective of whether the building or home was insured or not.

So how does Insurance Companies work? An Insurance company works at providing financial protection for risk which include death( life Insurance), health insurance, damage to assets like Vehicular insurance, insurances of homes, Travel Insurance, Fire Insurance etc. The Insurance Company earns its profit through risk management. The Insurance Company, the insurer indemnifies the insured against a specified amount of loss that might occur from a specified list or description of eventualities over a specified period of time. The insurer has to pay a fee which is called a "premium" in order to get the benefit of the insurance cover. The premium can be paid monthly, quarterly, once or twice a year as per the description of the Insurance policy. 

There are certain Insurances that the Government has made compulsory, like Motor Vehicle Insurance. If one owns a vehicle of any kind one has to have the same insured in order to ply it on the roads. Some countries like The USA, Canada have mandatory Health Insurance. It is not mandatory in India, however, keeping in mind the medical expenses, especially when it comes to hospitalization it seems to be the most wise decision to opt for a medical insurance.

What does an Insurance Advisor do? The Insurance Advisor utilizes his knowledge of Insurance policies of different companies helps his client choose the best policies according to their requirements. Not just advise the Insurance Advisor also acts an intermediary, sale and many other services related to various transactions. An Insurance Advisor is like a mentor or guide who guides clients to policies that specifically meet their requirements. Some Insurance Advisors also go the extra mile to keep their clients updated so that they don’t miss their payments dates of their premium, failing which at times calls for a penalty.

How does one become an Insurance Advisor? To become an Insurance Advisor one needs to complete his/her Bachelor’s degree. As there is several types of Insurances available one may either pick a specialty of his/her choice or specialize in General Insurance. Complete the pre-license requirements clear a licensing exam. One may either work for an Insurance Company or work independently. One can also choose to work as a freelance Insurance Advisor. There are several Companies specially companies that deal with vehicles who need to an in-house Insurance Advisor to take care of their fleets. 

Apart from these there are many Career Guide Services available online and one can go through those websites to get a good understanding of the Course. Many Career seminars also are held to help students select the course most suitable for them. The counseling also helps students understand their strengths and weaknesses and can work accordingly to better themselves.

 One can log on to the links listed below which will provide one with a good understanding of the courses available and how to go about cracking the exam:

Career Guide


Future Bright Program

By: Madhuchanda Saxena