Insurance on Phone Going to be a Reality Soon

 

Allowing insurers to summarize contracts over the telephone will definitely reduce the cost of insurance on low value covers. Based on Trevor Bull, managing director, Tata AIG Life and person in a regulatory panel on distribution channels, asserted this channel would assist the insurance industry get in touch with a section of consumers who do not need to deal with agents.


The sale of insurance plans over the phone makes it much simpler and more economical. The more economical it is, the low will be the premium paid through the customers. At the moment, direct marketing involves a 2 stage process where, within the first stage the mark buyer is convinced to purchase a policy, and also at the second stage an agent or agent approaches the individual for a signed proposal. This two step process helps make the transaction more costly and cuts down on the rate of conversion.


The committee has suggested the Indian regulator could consider allowing insurance providers to conclude a proposal with the telephone rather than insisting on the signed insurance proposal form. The problem was that the conversation ought to be recorded and retained not less than two years for proof and additional proceedings.


When insurance regulations were first drafted, the technology for recording and storing voice conversations wasn't widespread. Today, a lot of companies already record conversations between tele-callers and customers on grounds of monitoring quality. Insurance transactions over the telephone would protect the eye of clients better when compared with a signed proposal form. For example, in the case of proposal forms, there might be a case in which the insurance agent disregards material facts which are disclosed to him through the proposer. But in the situation of telephonic contracts things are on record. The insured person has additionally the option to alter his mind because the 15-day ‘free-look’ period is going to be available. The insurance coverage cover begins instantly, as soon as the payment is effected.


This concept might be new for India however in countries like Korea, such network marketing account for near to a fifth of sales. Insurance providers receive calls from potential customers following an advert or E-mail campaign. The tele-caller explains the relation to coverage and concludes anything over the phone, as well as receives payment by either debit/credit cards or through funds transfer system. The entire process saves considerable time and money for each side and is mutually beneficial.