Page 32 - The Insurance Times October 2021

for those who do not believe in saving a part of their are often left confused on which one to buy, as at times
earnings for rainy days. understanding the policy terms and conditions might come
easy. It is the responsibility of the insurers and their
People who have higher financial liabilities and can afford distribution channels to correctly explain the offerings of
to pay a premium for regular health and life insurance several insurance products. Following in the footsteps of the
policies may opt for comprehensive covers that provide health insurance industry, the IRDAI introduced the concept
greater financial coverage against unforeseen circumstances of a standard term insurance plan called Saral Jeevan Bima.
like hospitalisation or death of the policyholder. The IRDAI The idea of the plan was launched in 2020 though the plan
is looking to come out with a series of standardised products itself was offered for sale from 1st January 2021. Saral
for various sectors so that the protection quotient in each Jeevan Bima, thus, became the first standard term plan,
segment can be increased significantly. It has already with uniform coverage benefits across insurers.
launched a standard term product in the life insurance space,
and two offerings in the MSME segment--one for micro
enterprises, the other for small industries. These standard
products for dwelling & commercial units have been rolled
out from in April, 2021.

The idea is if a standard product is sold by all companies, it
becomes much easier for the policyholders to pick up that
product. The improved prospects for insurance are also
reflected in the performance of non life during the first
quarter. Non-life insurers have registered a 14% growth in
gross premium during the first quarter as demand for health
insurance increased. There have been major milestones in
this journey of growth, backed by a rise in per capita income,
demographics and favourable policy interventions, but the
biggest catalyst of transformation so far has been the covid
pandemic. This has put the spotlight on changes in consumer Saral Jeevan Bima has also made it easier for people with
behaviour that alter people's approach to life insurance, the comparatively less educational background and those falling
mode of selling policies by insurers and the product's under low-income profile to get coverage. It is a non-linked,
imperative overall. non-participating individual pure risk premium life insurance
policy that pays the nominee a lump sum death benefit
Life insurance segment (amount assured) if the insured passes away within the
policy period. This insurance has a minimum sum assured of
COVID-19 generated new growth opportunities. The
Rs 5 lakh and a maximum sum assured of Rs 25 lakh.
economic burden of the virus, in terms of hospitalization
charges, made people realize the importance of insurance.
Insurers, on the other hand, can offer a sum assured greater
According to PWC, insurance is now considered a necessary
than Rs 25 lakh while keeping all other terms and conditions
risk mitigation tool, not an investment product for the
the same. Along with the insurance plans mentioned above,
wealthy. This has nudged people to demand insurance.
consumers should understand that term insurance is divided
Consumer choice of the right insurance products is amongst
into various types, which help them choose the right format
the key foundations of the entire insurance ecosystem.
of the plan as per their requirements and financial
Apart from creating trust and confidence in the minds of
capabilities. Term insurance is required to keep oneself and
the policyholders, standardisation also enables insurers to
the family financially secured from any kind of
market their products in the best way possible.
unprecedented crisis.
In the life insurance segment too, standardization and The premiums can be paid in monthly, half-yearly and annual
digitization were observed in insurance policies. Due to the frequencies in the case of regular and limited pay policies.
multiplicity of insurance products in the market, consumers Death benefit will be the highest of ten times the annualised

32 The Insurance Times, October 2021