Disadvantages of Life Insurance Policies
The life insurance policies have a few disadvantages listed as follows. They are
A) Incompetent Personnel and facilities in the industry
Not all insurance companies are equipped enough to provide the consumers with life insurance policies they actually require. Many Insurance corporations have emerged after realizing the vast market potential and the untapped new segment. These companies are by and large interested in making huge profits rather than helping the general public with insurance. In the process they hire unskilled people and provide poor infrastructural facilities.
The insurance companies do not make use of modern methods to find the value of loss of goods insured .This alarming trend seen even in some developed countries is poised to stunt the growth of insurance industry. However with the advent of globalization multi national corporations have been constantly acquiring and merging with these companies. They are therefore able to provide the necessary impetus and remove
this setback though not to the full extent.
B) Lack of Consumer Awareness
The ultimate consumer is still not aware of life insurance policies. The level of his understanding is not sufficient. This is partly because of the reason said above. Some of the domestic companies don't have the technical expertise to implement the latest practices.
Moreover the services of insurance agents could sometimes do more bad than good. Some of them try to convince their clients to invest more or to choose certain policies which are not much beneficial to the clients. A person will find himself in trouble if he invests more than what is actually required. Since some agents indulge in unethical practices, this has led to wrong mindsets among general public about insurers.
The number of advantages outnumbers the disadvantages. Life insurance is a savings option that helps the individuals, general public, business houses and the nation at large.It is therefore a wise move to choose a life insurance
policy. The consumer has to gather life insurance information before choosing a particular policy.
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