New Delhi, Oct. 19 -- Commission caps are necessary, but the deeper problem is suitability. Insurance benefits often emerge years later, after death, illness, or loss. Buyers cannot readily judge advice at the time of purchase. This information gap, combined with upfront commissions, sales targets, and complex savings-linked products, encourages recommendations that maximise sellers' earnings rather than meet customers' needs.

A few months ago, a life insurer's sales team visited a senior-living community with brochures for unit-linked insurance plans. Most residents were in their late seventies or older. The reassuring pitch-protect yourself and your family-included examples of senior citizens purchasing cover worth several crores. Pers...