Purchasing Insurance Will Become Easier; Insurance Agents Must Pass An Exam To Sell Policies!
Insurance companies, their policies, products, and everything about them is practically Greek to the common man.
But not anymore!
The IRDAI has issued a circular for the point of sales products and persons for Life Insurance, and this circular has attempted to define the way the policies are explained to the potential customers.
What does this circular issued by the IRDAI state? How does it simplify the insurance policies and products for us commoners? Find out right here!
IRDAI Issues Circular For Simplification Of Insurance Purchase
The Insurance Regulatory Development Authority of India (IRDAI) has issued a circular for the point of sales products and persons for life insurance (POSP-LI). This circular has attempted to refines the way in which insurance policies and products are explained to the customers.
This comes at a time when the life insurance penetration (ratio of premium to GDP) has declined from 4.76% in 2009 to 2.76% in 2017.
As per reports, the insurance products will be plain vanilla life insurance policies, in which all the benefits of the policy will be predefined and opened up to customers at the point of sale. This makes it easy to understand for the customers as well.
As per the circular, there should be Key Features Document (KFD) or the proposal form, which will have two parts. These two parts will be joined by a perforation so that the two parts can be separated easily, wherein the first part will be given to the customer as a record and the second part will be kept by the insurance company.
The KFD document should include all the benefits under the plan, including details like sum assured on death, maturity benefit, surrender value, paid up value, exclusions, registered name and address of the life insurer.
POSP-LI Will Be Formally Trained And Certified
The circular states that the POSP-LI who will function as an intermediary to sell the policies, will have to be trained formally for 15 hours. This training will be organized by the company, and will be followed by an examination which will get the POSP-LI a certificate as well.
Every policy will be assigned a code that will identify the exact person who sold them. If the POSP-LI is found guilty of any misconduct, the responsibility of that will be the responsibility of the insurer and penalties imposed will be paid by the companies.