Max Secure, says prospects were reluctant to give adequate time to complete a proposal form. “The result of need analysis depends on the accuracy and quality of the collected data,” he says.
In the standard proposal form, it was mandated that an agent will have to ensure that all risk elements and details of charges are explained to the proposer. Irda had earlier underlined that the objective of the standard proposal form for individual policies in life insurance was to ensure that it takes into consideration all relevant questions that are required to understand the need for a particular product and make a recommendation to the prospect, bringing in transparency and protect the prospects' interest.
Irda had earlier made it mandatory that an insurer or agent or bancassurance or broker or the insurer's employees where direct sales are involved, would have to make reasonable efforts to obtain a consumer’s suitability information prior to making a recommendation.
Moreover, based on the suitability of information gathered from the prospect, the insurer or agent must have reasonable grounds to believe that the product being recommended to the prospect is suitable for him.
The review would be stored in a physical or an electronic format or any any other process that accurately reproduces the actual document and can stand legal scrutiny. Analysts say the most viable option by life insurers could be to provide online tools on need analysis which can be used at various life stages of the customer.