Life insurance industry needs to tackle mis-selling of policies

Feb 22 2013, 09:06 IST
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SummaryThe life insurance industry continues to face the menace of mis-selling. Even the finance minister publicly admonished insurers on the practice.

to malpractice of rebating.

The banking industry has embarked on an expansion mode by moving to several villages with a population of 2,000 through business correspondents. The insurance industry has no such strategy in hand. It can rope in business correspondents for selling of insurance products in their areas.

All deposit accounts in banks and retail loans, which as per RBI figures stand at R6,22,752 crore, should be covered by life insurance. Imagine the sense of relief the family will have on being protected against repayments of housing, consumer durable, credit cards and other loans on death of account holder.

The life insurance industry is focused on short-term gains and needs to make a choice for long-term outcomes aimed at satisfying customer needs. This, it can do by employing qualified and educated staff who can come up to the challenges involved. Let not the industry destroy itself by overlooking the challenges.

The author is an advisor in Amity University

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