By CFP Poonam Rungta
‘Insurance is a subject matter of solicitation’- all of us have heard this phrase after every insurance advertisement. Be it health insurance, life insurance, car insurance, travel insurance, read it in fine print, and seen on the insurance companies’ website. Every TV commercial ends with a hastily spoke line about insurance is a matter of solicitation. I am sure you must be at times wondering what the rationale of this line is? Does it mean that insurance policies have some hidden and undeclared procedure not mentioned for sales purpose? Or this phrase is at the end because it’s a sales gimmick?
Today, let us understand the meaning and implication of this phrase “Insurance is a subject matter of Solicitation”. After every advertisement, the term is mentioned, be it print media or television and websites, as a legal and statutory requirement by the regulator, IRDAI(Insurance Regulatory and Development Authority of India).
To Solicit–Dictionary meaning: to seek for (something) by entreaty, earnest or respectful request, formal application, etc.
Hence the insurance is a subject that needs to be asked for / solicit by the consumers. When the consumers decide the need for risk cover for his life or assets, he proposes to the insurance company. This proposal is made after discussing with an insurance advisor regarding his requirement, right insurance product as per his requirement, the insurance company, services and other related needs. His proposal is accepted or declined basis his financial and medical condition. Companies can accept with certain conditions in exceptional cases. It’s not like buying a consumer product where the manufacturers are chasing the customer.
Hence, it holds that “the customer avails the insurance products and services purely voluntarily as per his requirements. “
Customers should make an informed decision about buying an insurance product. Since it’s a subject matter of solicitation, it cannot blame anyone for the wrong product. To avoid this situation, the customer should decide about buying any product after meeting an expert who will help him in:
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Understanding his need for insurance
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The exact amount of insurance required
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Fixing the tenure of the insurance product
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Finding the correct product from a plethora of Insurance products
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Deciding the Insurance company
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Executing the above plan.
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Review his plan over some time as his income, age and responsibilities increases.
Insurance products are the obligation of the insurance company. Premium paid by the customers is not its deposits. Hence, insurance products should be supplied on demand and not sold.
But, the reality is precisely the opposite. Insurance products are not solicited. They are pushed and sold. Correct insurance planning can help the consumer with a backup for any financial contingencies in life. Such a back up gives him security and stress-free life.
To conclude, insurance is a subject matter of solicitation, hence making a conscious decision to cover your risk for financial security. In real life, agents approach you for achieving their targets….., but you should be approaching them to achieve your financial planning
