Friday, August 19, 2011

Has your insurance agent gone missing?

The Insurance Regulatory and Development Authority (IRDA) had brought about sweeping changes in the insurance industry particularly in Unit Linked Insurance Plans (ULIPs) with an aim to uphold and protect the interests' of the policyholders. Due to these pro-policyholder reforms the commissions from insurance products (particularly ULIPs) started drying up and thus insurance agents as well as insurance companies lost interest in distributing these products.

But as a direct repercussion of the pro-policyholders reforms, more than 10 lakh insurance agents have quit the profession in fiscal year 20110-11, according to the data compiled by the IRDA. Also, over the past couple of years, almost all insurers have cut down on the number of sales managers on their payrolls, the equivalent of development officers at Life Insurance Corporation (who are responsible for recruiting agents).

We believe that while insurance agents go missing, IRDA should continue with its pro-policyholders' reforms as it would ultimately benefit the whole insurance industry in the long run. Yes, many of the insurance agents would wither away in this process and only those who are committed to serve the policyholders will remain. This thus acts as a catalyst in weeding out unwarranted insurance agents from the industry.

Also, as a policyholder please remember that insurance is for indemnifying your risk, and hence should not be mixed with investments. Thus, we believe one should opt for only a pure term plan to get a life insurance cover for oneself.

Source : personalFN

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