Thursday, October 19, 2006

Please don’t buy an insurance policy from me

 
  (Source: The Indian Express, Dated 19th october, 2006). A story worth looking at.
 
I had been talking to Darshan Kumar (name changed), an insurance agent for some months. One morning in June he asked me "Do you want to become an agent?" "You can earn 40 per cent of the policy premium as commission. If you sell a policy with a Rs 1 lakh premium, you earn Rs 40,000 in the first year alone," he said. When I told him that not all policies yield a commission of 40 per cent, he said he would tell me the ones that did.
I knew insurance agents push policies that maximise their commissions, without caring for a policyholder's needs. However, to check the claims made by insurers that they follow best practices, had qualified agents and mis-selling was not rampant, I played along, and committed.

Darshan briefed me on the formalities: 100 hours of class work over 18 days at an insurance training institute, followed by a two-day crash course at the company, then an exam certified by the Insurance Regulatory Development Authority (IRDA). That's pretty intensive and time-consuming, I retorted. "Not to worry, it would be taken care of," he said.

On July 4, I filled up forms to become an agent of the life insurer he represented. I gave him Rs 700 (Rs 150 for course book, Rs 200 to the Insurance Institute of India as exam fee and Rs 350 as the licence fee, which would be refunded if I didn't clear the exam). "But I can't attend classes since I have a regular job," I told him. "No problem, just take a day out to show your face to the people at the institute and take your course book. I will take care of the attendance," he said.

On July 15, I went to the institute showed my face, took my course book and signed the register for 18 days — proof that I had completed 100 hours of class work. But he reminded me that I must attend the two-day learning programme, on August 18 and 19, conducted by the insurer, at their office. When I expressed my inability to come for two days, pat came the reply: "Come for one."

I skipped the August 18 class. On August 19, I attended the class, that too only for the first half. At one point, when I asked the company trainer — the only person who seemed intent on playing by the rules — for a copy of the model test papers, he said: "Most of you don't attend classes at the training institute and then you resort to desperate measures."

The next day, I sat for the exam in a Delhi school, with my mobile phone in tow. The invigilator objected, but when I told her that I had forgotten my calculator, she let me keep it, provided I kept it in 'silent' mode. A week later, my contact informed me I was a qualified life insurance agent and that I can — and should — start selling policies.

When I told him that I didn't have documentary proof, he said: "Everybody sells policies without a licence. Why are you worried? You have cleared the exam. Give me your photograph, and I will get it ready. Meanwhile, you must sell policies." Two months on, I haven't sold a single policy and I keep making excuses for not giving him my photographs. From time to time, he calls and asks me why am I not selling. He has to — if new agents like me don't sell policies, the company's premiums don't increase. If premiums don't increase, point-persons like Darshan don't earn more.
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