Sale of Life Insurance Policies to be Based on Consumer's Suitability Information

The Insurance Regulatory and Development Authority (IRDA) released guidelines on product matrix, which mentions that sale of the life insurance policies is set to become more scientific shortly. The guidelines direct the life insurers to ensure that their direct sales personnel sell life insurance products based on need. Mr. J. Hari Narayan, Chairman, IRDA said that it is important and necessary for insurers to have in place a suitability index (or a prospect product matrix) that can serve as a self governing tool to assess the quality of sale.

The guidelines say that an insurer, before recommending a product to the consumer, has to ensure that the consumer's suitability information is got beforehand.

The suitability information should include factors such as age, annual income and financial resources used for purchasing the life insurance policies.

IRDA is planning to bring the product matrix or need-based sale from April 1st 2012.

Source-Medindia