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Insurance Advisors - Roles and Responsibility


Insurance Advisors

An Insurance Advisor, also known as a Financial Advisor, provides financial advice to clients on investing, retirement plans, and other financial matters. Insurance advisors analyze financial risks and profits with their clients, such as assets, tax status and insurance. Insurance Advisors act as a "one-stop-shop" by guiding everything from portfolio management to insurance products

Registered insurance or financial advisors must carry the Series 65 license to run a business with the people. There are different licenses and certifications may be required depending on the services provided by a given insurance advisor.

"Insurance Advisor" is a generic term with no actual industry description. Hence, this term can describe various types of financial professionals. Insurance agents, investment managers, tax preparers, stockbrokers, and financial planners can all be considered insurance advisors. Bankers and Estate planners may also fall under this category.

Generally, an insurance advisor is an autonomous practitioner who works in a fiduciary capacity in which client’s welfares come before their own. Nevertheless, only Registered Investment Advisors (RIAs), who are governed by the Investment Advisers Act of 1940, are maintained to a true fiduciary standard. These fiduciary standards order that an RIA must always unconditionally place the client's best interests beforehand, regardless of all other conditions.

Some insurance brokers elect to practice in this fiduciary capacity, as a way of luring clients. Nonetheless, their salary structure is such that they are bound by the agreements of the firms where they work.

2.1. The Fiduciary Distinction

Since the undertaking of the Investment Adviser Act of 1940, two types of associations have lived between financial arbitrators and their clients- the reasonableness standard and the stricter fiduciary standard. These connections determine the nature of the dealings between registered brokers and clients in the broker-dealer room. There is a fiduciary association that demands advisors enlisted with the Securities and Exchange Commission (SEC) as Registered Investment Advisors to exert duties of loyalty, care, and full revelation in their interchanges with clients.

While the former depends on the regulation of "caveat emptor" conducted by self-governed laws of "suitability" and "reasonableness" in instructing an investment product or strategy, the latter is grounded in federal laws that inflict the highest moral standards. At its root, the fiduciary association leans on the condition that an insurance advisor must work on behalf of a consumer in a way the consumer would act for themself if they had the requisite proficiency and skills to do so.

Insurance advisors has to liaison between the insured and the insurer. They have a role in developing insurance businesses for the insurance agency that they convey. Moreover, since they also represent their consumers, insurance advisors are responsible for them also. 

So, the role of an insurance advisor can be divided into the following two sorts –

3.1. Insurance advisor's role towards the insurance agency

The roles of the advisor towards the insurance company that he represents are –

  • Increasing business

The primary role of the insurance advisor is to develop as many new relations for the insurance company as possible. This can be done by trading the maximum number of policies to his consumers. An insurance advisor, therefore, should approach as many people as possible and attempt to place the company’s insurance policies in the individual’s financial requirements if possible.

  • Persistency

Just marketing insurance policies is not enough. The insurance advisor should also confirm that he can maintain the consumers of the firm. Persistency is a crucial factor in the insurance firm’s revenue. Persistency represents the number of policyholders that are continuing with the same plan, with the same insurance company. Persistency is extremely important in the case of life insurance policies which are long-term plans. Underneath these policies, the continuity of the plan for the prescribed term is in the best welfare of the insurance firm as well as the policyholder. The insurance advisor should, thus, confirm that his current clients persist in their insurance coverage without fail.

  • Promoting the insurance company

Another function of the insurance advisor is to upgrade the insurance corporation with which they are associated. When consumers trust an insurance corporation, they prefer buying policies from it. The insurance advisor should, thus, build an optimistic brand vision of the insurance firm in the eyes of his clients and enhance the company’s goodwill.

3.2. Insurance Advisor's Role towards the Clients

Since insurance is a long-term product and impacts the financial health of the family, the insurance advisor plays an important role. He ought to be active and dedicated towards his job so that the consumer can count on his expertise and guidance.

The insurance advisor’s role towards his/her clients includes the following –

  • Fact-finding

Before generating profit, an insurance advisor should collect all the required personal and financial information about their clients. When the advisor is aware of the personal and financial details of the client, he can better understand the client’s needs. These demands and necessities would then guide the advisor to choose the suitable insurance product. So, fact-finding is the foremost step of the insurance sales procedure, where the insurance advisor should collect the client's information.

  • Objective identification

Once the insurance advisor has the personal and financial details of the client, the next step is to discover the financial objectives that the client has. Insurance policies are goal-oriented products. They can be chosen according to the diverse financial goals that people have. For example, if a person likes financial security, term insurance and health insurance plans are ideal choices. For child planning requirements, child life insurance plans are the most suited. So, if the advisor is not aware of the financial needs of the client, it would be hard to find the appropriate insurance product.

  • Fulfilment of financial goals

In this phase, the clients sought out financial plans according to their advisor's expertise and knowledge. After understanding the financial goals of the consumer, it is the insurance advisor's job to suggest suitable insurance products to the consumer. The benefit of the client should be the first thought of the advisor before suggesting any plan. As the clients profit from insurance, their confidence in insurance advisors also grows.

  • Handling Queries

When the advisor proposes a suitable insurance product, the client might disagree with his suggestions. There are bound to be disapproval and questions from the customer’s end. Therefore, it is the advisor's job to handle all the objections and solve their questions to the best of his knowledge.

  • Helping the clients buy insurance

To buy insurance, the client needs to fill out the form, starting with personal details. The forms contain the details of the client and insurance contract. The advisor’s responsibility is to watch whether his clients are providing correct information. He must assist the client fill up the proposal form and describe the relevance of the different aspects of the form so that the client understands why the information should be precise.

  • Maintain contact

The insurance advisor’s role does not finish with just the sale of an insurance product. The advisor should keep in continuous contact with the consumer even after the policy has been sold. Constant connection with the consumer would help the insurance advisor get referrals which would help in boosting up the advisor’s business. Moreover, via contact, the advisor can assist the customer to revive his insurance policies and, therefore maintain a high persistency ratio.

  • Help in claim settlements

The final role that an advisor has towards his consumer is at the time of claims. Since the advisor is aware of the technicalities of insurance and knows the claim process, it is his responsibility to help his consumers get the payment of their claims. Insurance advisors play a vital role in the claim settlements of their customers by helping them with the proper procedure and the documents required. Assistance at the time of claims would grow the clients’ belief in advisors and would also help in generating more business. Insurance is not just selling insurance policies; it also includes making a long-term relationship. When the insurance advisor helps the consumer at the time of claims, the consumer comprehends the significance of insurance and realizes how the policy came to his aid. This pushes the client to be more receptive to insurance, and he would consider buying more policies thereby growing the business of the advisor.

An insurance advisor plays diverse roles for both, the insurance company and consumers. To do full justice to their multifaceted roles, insurance advisors should fulfil the following responsibilities –

Responsibilities of an Insurance Advisor


o   It is the responsibility of an insurance advisor to keep himself updated with all insurance-related news and changes.


o   They must have end-to-end knowledge of the insurance products that they are selling.


o   The top responsibility of an insurance advisor is to keep the client's profit first. An advisor should always suggest the product best for the client's needs.


o   They should be honest with their clients. They should not deceive their consumers for their personal earnings.



An insurance advisor would be the one who ‘advises’ people to purchase the right and the most suited insurance policy for their necessities. So, if you want to be an insurance advisor, you must remember the roles and responsibilities both for the insurance company and your client. Insurance advisors who follow the right set of rules and fulfiling their job responsibilities, can earn pleasing commissions and increase their insurance business manifold.

Frequently Asked Questions


Insurance advisors provide a range of insurance-related suggestions and advice to individual clients. The duties in this career include financial management, client sales, and business advice for clients.

  • You must be at least 18 years old or above
  • You must have at least passed class 10 or equivalent examination
  • It is mandatory for you to attend the Insurance Training organised by ICICI Prudential Life Insurance and clear the pre-recruitment test conducted by an IRDAI-authorised examination body.
  • Good understanding of employer, industry and federal regulations
  • Knowledge of financial options such as loans, investments, savings accounts and stock options
  • Expertise in financial planning and investment ideas
  • High ability to analyze and explain market data 

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