Elimination of commission in Insurance

[DRISHYA]

Hey future managers,
Govtn has suggested a new committee FINWEB Financial Well-Being Board of India to eliminate the upront commission on Insurance to the agents. It would directly affect 30 lakhs ppl. Discuss the pros n cons here n gv ur valuable views

[pdatar]

Hi,
Insurance is a product which is sold and not a product which is bought willingly.So you need people who will push the products.With upfront commissions curtailed, the agents would lose the incentive to sell the product and it would also affect their livelihood.Moreover it is impossible for any insurance company to reach customers across all sections without the help of agents.There are protests from insurance industry as well. We have to wait and watch for the final decision on the recommendations of the Swaroop Committee recommendations till Nov 5.

Regards

[gurpreetsingh]

Well this step is not right for agents section as selling products like insurance is a tuff task and an agent perform this with great skills and efforts. They use their contacts etc to sell policies.
If the commission will be removed from insurance agents section then i will be a biggest problem as many people work as insurance agent for full time, secondly there will be huge lose for companies who previously were using agents for increasing their reach to the depths of indian consumer group.
Wrong decision of Govt i totally oppose this step from Indian governemt.

[cool_123]

Lakhs of life insurance agents have opposed the recommendations of Swarup Committee on elimination of upfront commission paid to advisers. Implementation of the recommendation will make the role of life insurance agents working with LIC and private insurers redundant and adversely affect crores of people who are dependent on them

[subscriptionsxyz]

Anyone has any more details on this please.. I am really keen to understand more..

[deepakraam]

But considering the current scenario,I would say almost 90% of the insurance products are being sold by the agents.When the commission is stopped,it will affect the revenues of the insurance companies.So till a solution is being worked out this model will continue to survive.

[guptam_imt]

Elimination of agent commission in case of ULIPs is actually a move to help the consumer. The sudden proliferation of ULIP policies is due the fact that agents today are pushing ULIP policies as opposed to traditional life insurance. Why? That because agents get 50% commission when they sell you a ULIP policy. for example. if an agent sells you a ULIP policy whose yearly installment is 1 lakh, the agent gets 50K from the AMU(Asset Management Company). The crux of this issue is the deliberate feeding of mis-information to prospective clients by agents in order to sell them ULIP policies when they might infact derive greater benefits from traditional life insurance.