Broker

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Definition

In insurance, a broker is an individual who represents a customer. A broker is authorised to sell an insurance policy from any insurance company. Further they recieve brokerage from the insurance company whose policy they sold.

Description

The eligibility to get the claim benefits is determined either by the conditions in the policy papers or by other legal standards. When an insurance plan is issued, the policyholder should specify the name of the beneficiary. There are additional procedures for naming a beneficiary if the original beneficiary is no longer alive or does not meet the age limits at that time.

In most cases, the beneficiary would be the policyholder’s wife or kids. In other instances, it can be any kind of charity, your company, some other relatives in the family, or multiple beneficiaries.

Example

Rohit purchased a term plan with a policy term of 20 years. He declared his wife Sudha as the beneficiary under the policy. After paying the premium for 10 years, Rohit died. The insurance company paid the benefits to the beneficiary who in this case will be Sudha.

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