IRDA CODE vs POSP: The insurance industry is one of the most regulated sectors, and if you are in the business of selling insurance policies, you’ve likely faced the decision of choosing between an IRDA code and a POSP code. Both have their pros and cons, and it’s important to understand the differences to make an informed decision for your career in the long run.
In this blog post, we’ll break down the key distinctions between an IRDA code and a POSP code, discuss the eligibility criteria, fees, and which option might be best for you in 2024.
What Is an IRDA Code?
The IRDA (Insurance Regulatory and Development Authority of India) code allows you to sell insurance policies after passing the IC38 exam. This certification, issued by IRDA, enables you to become an insurance agent or advisor for a specific insurance company.
Key Points:
- Minimum Age: 18 years old.
- Educational Qualification: 10th pass.
- Exam Fee: ₹600 to ₹800 (one-time payment).
- Exam: IC38 exam conducted by IRDA.
- License Validity: Lifetime (no renewal required).
- Types of Policies: Life insurance, general insurance (motor, health, home, travel), etc.
What Is a POSP Code?
POSP stands for Point of Sales Person code, which can be issued by both insurance companies and brokers. It allows agents to sell insurance policies without the need for extensive exams like IC38.
Key Points:
- Minimum Age: 18 years old.
- Educational Qualification: 10th pass.
- Fees: No fees (free of cost).
- Exam: Conducted internally by the insurance company or broker, more of a formality.
- License Validity: Requires renewal every three years.
- Types of Policies: Simple, pre-approved insurance products (health, motor, etc.).
Major Differences Between IRDA and POSP Codes
- Training Requirements:
- IRDA Code: Requires a minimum of 25 hours of training.
- POSP Code: Requires 15 hours of training.
- Exam Difficulty:
- IRDA Code: The IC38 exam is more challenging and comprehensive.
- POSP Code: Easier, as it is often just a formality.
- Scope of Policies You Can Sell:
- IRDA Code: You can sell a wide range of insurance products, including complex plans with higher risks and customization.
- POSP Code: You are limited to selling simple, low-risk products that are pre-approved by the IRDA.
- License Validity:
- IRDA Code: Lifetime validity, no renewal required unless you choose to surrender or if the code is revoked due to regulatory issues.
- POSP Code: Needs to be renewed every three years by the issuing company or broker.
- Business Flexibility:
- IRDA Code: You are tied to selling policies from the company you’re affiliated with.
- POSP Code: You have the flexibility to sell products from multiple companies through brokers like Policy Bazaar, InsuranceDekho, and Turtlemint.
Advantages and Disadvantages of IRDA Code
Advantages:
- You can sell complex and high-value policies.
- Lifetime validity without the need for renewal.
- You can build a robust portfolio with long-term clients.
Disadvantages:
- Requires passing the IC38 exam, which is relatively tough.
- Ties you to a single insurance company, limiting your options.
Advantages and Disadvantages of POSP Code
Advantages:
- Easier entry with no tough exams or fees.
- Flexibility to sell products from multiple companies.
- Ideal for agents who want to sell in the short term or specific products.
Disadvantages:
- Requires renewal every three years.
- Limited to selling low-risk, simple insurance products.
- The code can be canceled at any time by the issuing company or broker.
Which Is the Better Option in 2024?
Choosing between an IRDA code and a POSP code depends on your long-term goals in the insurance business. If you are looking for a stable, long-term career with high earning potential, the IRDA code is the better option. It allows you to sell a variety of insurance policies with higher flexibility, and the license has lifetime validity.
On the other hand, if you’re seeking an easier entry into the insurance field and want the flexibility to work with multiple companies without the pressure of a tough exam, the POSP code might be more suitable. However, keep in mind that it limits the scope of policies you can sell and requires periodic renewal.
Also Read: Senior Citizen Card Benefits | How to Apply for a Senior Citizen Card Online 2024
Final Thoughts
Both the IRDA and POSP codes have their respective pros and cons, and the choice ultimately depends on your career objectives. If you’re looking for long-term stability and growth in the insurance sector, the IRDA code is the way to go. For a short-term, flexible approach, the POSP code will suffice.
Before making a decision, consider the type of insurance products you want to sell, the kind of clientele you’re targeting, and your commitment to the business.
Frequently Asked Questions (FAQs)
What is the minimum qualification for an IRDA or POSP code?
Both require a minimum qualification of being 10th pass.
How much does the IRDA exam cost?
The IC38 exam for the IRDA code costs ₹600 to ₹800, which is a one-time payment.
Is the IRDA code valid for life?
Yes, once obtained, the IRDA code is valid for life without the need for renewal.
Can I sell health insurance with a POSP code?
Yes, you can sell health insurance, but only low-risk, pre-approved policies with limited coverage.
Do I need to renew my POSP code?
Yes, the POSP code needs to be renewed every three years by the issuing company or broker.
