InvestorQ : Is IRDA planning to ban the sale of long tenure insurance policies to senior citizens?
Anamika Sodhani made post

Is IRDA planning to ban the sale of long tenure insurance policies to senior citizens?

Answer
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5 months ago


Technically, IRDA cannot put such conditions directly as they are more to with sales practices. However, a quick analysis of data shows that IRDA’s concerns are justified. Private life insurers saw a 4% drop in the number of policies sold even as new premiums rose by 11.7%. This is clearly an indication that it is merely the ticket size of insurance products that is increasing and new policies sold are static. But where the data is really worrying IRDA is that the many of these high ticket sized policies are actually being sold to senior citizens who are above the age of 65. Such investors invariably end up paying a very high premium which is difficult to sustain over a long term. Typically, these policies are sold by agents who end up earning a fat commission by selling these products. IRDA now wants insurers to exercise discipline not sell policies beyond 15 years to such senior citizens.