Irda’s need-analysis proposal a step in right direction

The need-analysis format should be convenient to use for the intermediaries for it to be successfully implemented. ICICI Prudential Life Insurance MD & CEO Sandeep Bakshi says the proposed format is difficult to implement in its present form and needs modification.

Similarly, Star Union Daichi Life Insurance MD & CEO Kamaljit Sahay says the implementation of the proposed format will affect business growth as independent advisors (IAs) will find it difficult to comply with.

The challenges from the customers’ side are similar to those faced by financial planners, that is, first, convincing the prospects that it will benefit them and, second, to get correct and complete data. Because any incorrect information on income, expenses and assets will lead to inaccurate assessments on the required insurance cover, which will defeat the very purpose of the exercise.

The proposal form is the basis of the insurance contract. The current proposal forms being used by the life insurance companies include the proposer’s medical history and the family medical history. So, it will be convenient if the current proposal forms are continued, but supplemented by a simpler need-analysis format. The need analysis can be scrutinised during financial underwriting.

How much insurance cover?

There are two ways to estimate the required

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