The penetration of insurance in India is quite low. And one of the key reasons for this is the lack of trained professionals who can be employed as agents or distributors. Be it for a simple product like motor insurance or travel insurance, or for a more complex insurance solution like ULIP, the mandate is that only a registered distributor can sell policies from a particular insurance provider.
This scenario is bound to change for the better with the introduction of POS for insurance. IRDAI, the governing body for regulating the insurance sector, has allowed a Point of Sale (POS) person to sell insurance policies. With little training and qualification needed to sell the simpler insurance products, POS can augment the existing insurance distribution workforce and add value to a higher volume of sales.
Let’s check out some of the advantages of becoming a POS for insurance sector:
1.Free up existing workforce to sell more complex products
The new arrangement works best for simpler products that do not have a lot of underwriting efforts to sell to the consumer. So motor insurance or travel insurance, whose terms are easy to understand and explain to the buyers, comes under the ambit of an insurance POS. This frees up the existing full-fledged distributors to sell more of the complex products like ULIPs and deferred annuity plans, thus providing dual advantages.
Another advantage is that a POS can work for more than one insurance service provider. Earlier, distributors used to be associated with just one company. However now a POS can sell insurance products for multiple companies as long as he/she is aged 18 or above and has cleared 10th standard exams.
3.Range of products that can be sold by POS
The products listed by IRDAI that can be sold by a POS include pure term insurance plans (these may or may not have returns on the product), motor insurance, travel insurance, and non-linked endowment plans. The POS can sell those products that satisfy the below 3 norms –
1 – The plan is easy to understand and explain
2 – The plan states the investment benefits beforehand
3 – The plan benefits are fixed, non- fluctuating, and pre- defined
4.Ease of getting trained
Another key point that works in favor of such POS is that they can get trained either offline or online through a reliable financial product agency or insurance broker, and get started with building a full-fledged career
Initially, only the National Institute of Electronics and Information Technology (NIELIT) could certify trained POS. But this has been relaxed from February 7 this year. Now an insurer, broker, or intermediary in the business can train the POS. This will enable quicker onboarding of the POS sales people. These parties need to conduct a training of at least 15 hours and examine the candidate on an objective paper to certify the POS.
These benefits of becoming a POS will help in the insurance industry to reach a wider segment of people across India.