Life Insurance

Topics: Insurance, Economics, Insurance in India Pages: 8 (2353 words) Published: December 14, 2012
Life Insurance

Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against. Life insurance or life assurance is a contract between the insurer and the policy owner (policyholder) whereby a benefit is paid to the designated Beneficiary (or Beneficiaries) if an insured event occurs which is covered by the policy. In return, the policy owner (or policy payer) agrees to pay a stipulated amount called a premium at regular intervals or in lump sums to be a life policy the insured event must be based upon life (or lives) of the people named in the policy. Ref: Insurance Broking ICAI


An agent is a primary source for procurement of insurance business and as such his role is the corner stone for building a solid edifice of any life insurance organization. To effect a good quality of life insurance sale, an agent must be equipped with technical aspects of insurance knowledge, he must possess analytical ability to analyze human needs, he must be abreast with up to date knowledge of merits or demerits of other instruments of investment available in the financial market, he must be endowed with a burning desire of social service and over and above all this, he must possess and develop an undeterred determination to succeed as a Life Insurance Salesman. In short he must be an agent with professional approach in life insurance salesmanship. Such an agency force is expected to be helpful not only in proper field underwriting but also after sales, servicing, concomitant and essential elements for higher retention of business. Ref: The Journal IRDA Jan-Jun 2004

Attributes of Insurance Professionals

We can identify certain positive manifestation of a professional agent

* He will possess excellent and proven salesmanship skill. He will have knowledge of human nature and psychology. He will have a sound knowledge of the product, his institution, his competitors and entire financial market. * He will have a regular and systematic business production with a time- bound plan. * He will have an increasing and decent income and increasing clients. * He will derive enormous job satisfaction.

* He will follow proper business ethics and accepted code of conduct. * All his actions will be consumer oriented.
* He will be accepted as a friend, philosopher and guide by his clients. * His professional status will be evidenced by his becoming a club member of one of the higher clubs. * His public recognition in the institution will also be enlightened by qualifying for special honours like MDRT etc.

Ref: The Journal IRDA Jan-Jun 2004

Contribution of Agents in Life Insurance Corporation (The Giant Insurance Co. In India):

Remedial Measures

Need base product and capacity based sales: -

The agent before offering any products must know his clients well enough. He must have the knowledge about the state of client’s personal habits, health occupation, financial position and income, moral character, his family history and all other related aspects which help in field underwriting of a case. After accumulating the needed data/information if the life is apparently found insurable, only in such a case proposal should be procured. An agent has a long-term stake in the health of an insurance organization; therefore, he must canvass and procure only such business, which has a reasonable chance of staying in the books of the insurer. Neither early claim nor lapsation of a policy helps an agent to build a sizable portfolio for his stable income and professional standing. Thus the agents should offer to their clients only such products that are not only will suited to their needs but also are financially viable for them.

After sales service: -

In the present age of information explosion and competition, the service industry like LIC, Insurance companies cannot survive without an action based...
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