A POSP can only sell simple and transparent insurance plans which provide entire protection and tax benefits. They sell over-the-counter products that are pre-underwritten and approved by IRDAI. These products are so basic in nature that they come with clear and straight fixed benefits and do not need elaborate explanations for the client. They do not sell complicated or high-risk products and hence earn lower commissions.
Unlike insurance agents, POSP relies on insurance brokers/companies for servicing demands of his customers.
Let’s take a look.
1. Qualification and Training
According to IRDAI guidelines, the eligibility conditions for appointment of Insurance Agents include:
- Eligible age for appointment (at least 18)
- Eligible education qualification, suggested minimum qualification to be prescribed by the insurer is a pass in 10th standard or equivalent examination from a recognized Board / Institution
- Interview Procedure if an for the appointment
Every insurer impart insurance training to applicants for agency, to equip them with the related knowledge of the field. Every insurer shall utilize the ‘Skill Development Training’ conducted by the National Skill Development Council (NSDC), Government of India; BFSI SSC financial sector skill council in a phased manner.
The examination for the insurance agent applicants is being conducted by Insurance Regulatory and Development Authority (IRDAI) and a minimum of 25 hours of training is required
A POSP needs a minimum qualification of 10th pass. The training period of a POSP also differs from an Insurance Agent. A minimum of 15 hours of training is required to pursue a POSP task. The examination for the same is conducted by the Insurers.
2. What can they sell?
A health insurance agent can sell health policies from one insurer only, with which he is affiliated. A POSP, on the other hand, can sell policies of multiple insurance companies and across both life and non-life categories. The difference between them lies in the kind of policy being sold. A POSP can sell motor insurance, home insurance, travel insurance, and personal accident policy among other things. A health insurance agent can sell as well as act as a consultant to the policyholder. They can sell complex health products to people, companies, and businesses. They can help them tailor the policies to meet their exact needs, and they can advise clients on the policy matters. They can sell high-risk products and their commissions are usually higher.
A POSP can only sell simple and transparent insurance plans which provide entire protection and tax benefits. They sell over-the-counter products that are pre-underwritten and approved by IRDAI. These products are so basic in nature that they come with clear and straight fixed benefits and do not need elaborate explanations for the client. They do not sell complicated or high-risk products and hence earn lower commissions.
Unlike insurance agents, POSP relies on insurance brokers/companies for servicing demands of his customers.
3. What type of products can they sell?
A POSP can sell motor, health, personal, life, etc. consisting of the pre-underwritten products. On the basis of the prospect, the insurance policy is automatically generated by the system. Additionally, an insurance agent can sell customized products like marine insurance, fire insurance, etc. depending on the prospects demands and needs.
4. Where do they operate?
Insurance agents, currently, operate in large cities and towns depending upon the Insurance companies’ requirements. They can expand into new areas and even sell insurance online but since their products earn higher commissions, they can focus on selling high-quality products than selling a large number of simple ones to earn more.
A POSP largely caters to first-time customers looking for simple and basic insurance policies. They can expand across geographies including metro, urban, semi-urban, and rural areas to serve customers. Since the products they sell are basic, they depend on selling a large number of products to earn more. A POSP is better suited to increase the net coverage of insurance and is equipped with digital equipment to make the sales.
5. What is the Validity of the certificate?
A POSP has a validity of 3 years. Whereas, insurance agents are valid till they are willing to work for the agency.
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