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With the peak season for the sale of insurance products looming large, the Insurance Regulatory and Development Authority has entered into an agreement with Prasar Bharati, the apex body for entertainment and broadcasting.
From mid-January till the end of March, the Irda will launch a three-month ad campaign on both Doordashan and All India Radio, educating the masses as to what insurance means.
Year after year, on the back of the tax advantages accruable, tax payers rush to buy risk cover to bring down their tax liability. More often than not, said a senior private insurance official: "He (the tax payer) ends up buying a product without understanding or realising his need".
Insurance agents in their enthusiasm to meet annual targets push the sale of products that can help them maximise their commission, many caring little to maximise the value for the insured.
Irda chairman N Rangachary said that in its role as a development authority, it is necessary to explain the different facets of insurance, which will be the focal point of the publicity campaign.
He however, pointed out that while Irda's publicity campaign is expected to improve the industry, it is imperative that the individual insurance companies carrying on their individual campaigns as well.
As buying insurance cover continues to remain skewed to the last quarter of the fiscal, insurance companies are gearing up their ad campaigns to boost year end sales. The special emphasis has been on pension plans, especially since the number of tax-payers have risen almost four fold from eight million in 1997 to the present 31 million.
The main reason why the load comes down heavily on insurance companies in the third quarter is that the tax-payer continues to rush to buy a life insurance policy, a pension plan and a mediclaim cover to take advantage of the tax benefit offered under section 88, section 80 CCC and section 80 D of the Income Tax Act.
Advertising has played a critical role in building awareness about the new companies and their products offered.
Each company has taken different approaches in trying to achieve the same aim, educate the masses on what insurance is all about. However, there have been instances of mis-selling and misuse of illustrations to secure short-term benefits.
"This runs the risk of misleading the customer and leading to customer dissatisfaction in the long run. In the short term, this can harm the reputation of the whole industry which is something no one would like," said HDFC Standard Life Insurance Company head marketing Pankaj Seith.