Mumbai: Private insurer HDFC Life has introduced a Most Important Document (MID) initiative wherein customers would be required to fill up a mandatory one page form acknowledging the acceptance of the features of the product at the time of buying a policy.
“We are of the belief that customers should buy products for the right reasons and thus, we encourage them to spend time in understanding the products they plan to buy in line with their needs, read up all necessary product literature and fill up the MID form. The objective of MID is to enhance product understanding among our customers and minimize mis-sale. All our main distribution channels would follow the process of submitting MID along with proposal forms,” said Mr. Amitabh Chaudhry, MD and CEO, HDFC Life.
The MID has been rolled out across all its main distribution channels with effect from April 8, 2011.
HDFC Life offers 27 schemes across categories like protection, pension, savings, investment and health.
It remains to be seen whether HDFC’s new initiative will bring some respite to policyholders as many people do not read the fine prints of policy while buying insurance.
A similar practice has been proposed by SEBI recently for national distributors of mutual funds to take an acknowledgement from investors while selling a fund with full disclosure of commissions.