The Indian insurance market is thriving with a variety of insurance policies. Many public and private companies are serving in the health and life insurance sector, launching new types of insurance products for financial needs. Prior to this, LIC was the only insurance company that dominated the Indian insurance markers for many years. There are currently 23 life insurers in India with combined assets of at least Rs 16 trillion. Of these, assets worth Rs 13 lakh crore are under LIC, the largest insurance company.
Due to this increasing variety of products, people are facing difficulty in choosing the right insurance product. They often take the wrong kind of insurance – not suitable for them and at the same time not fully covered.
There are many people who take the risk of getting underinsured even after insuring themselves with more than 2-3 types of insurance policies. These people are not only facing the risk of having low insurance but their finances are also getting strained by paying high premiums.
So, keeping these risks in mind, we have gathered some important insurance policies that you need to consider in your life to take care of your family’s health as well as financial needs at an affordable cost.
Term Insurance – for the financial needs of your dependents
Life is full of uncertainties; We don’t know what happens in the next minute. One should consider taking a life insurance policy to get rid of such insecurities and live a comfortable life with peace of mind.
Talking about life insurance, term insurance is the best insurance policy that provides complete protection to the dependents of the insured at a low cost. It is the most suitable insurance product for the person who is the sole breadwinner of the family. Term insurance provides income replacement and helps the family pay rent or home loan EMIs, child’s education fees, etc. in case of death of the insured.
LIC, HDFC Standard, ICICI Prudential, ING Vysya, Birla Sunlife, Reliance Life, Bajaj Allianz, Aviva, Kotak, SBI Life, MetLife, Tata AIG, Bharti AXA, IDBI Federal, etc. are some of the best players that offer term insurance.
Medical Insurance – For Expensive Health Care Needs
With the increasing rate of medical inflation, the cost of healthcare needs in India is increasing day by day. Other reasons such as the increasing number of private players in the hospital industry, lack of interest on the part of the government to design health policies that provide health care at an affordable cost to the common man, and the increasingly sedentary lifestyle among Indians that led to various complex raises diseases, has led to rising health care costs.
To help the people suffering from this problem, many insurance companies are providing medical/health insurance policies tailored to their health care needs. Two types of health insurance policies are available – Individual health insurance policy and Family floater policy which cover all general and routine medical expenses and hospitalization charges of an individual and family respectively.
At present, there are 27 non-life insurance companies in India, out of which 4 are public sector companies contributing major services to the health insurance segment. National Insurance, New India Assurance, United India, ICICI Lombard, Tata AIG, Royal Sundaram, Star Allied, Cholamandalam DBS, Bajaj Allianz are some of the leading health insurance companies in India.
Accident insurance – to cover the risk of accidents
As we all know, accidents are uncertain and are most common in India. They can cause serious financial hardship to you and your family in case of accidents. A term plan can only help in providing financial protection to your dependents in case of your death but does not cover loss of income or medical expenses in case the person is unable to earn his/her income in case of an accident. Here comes the role of the accident insurance policy.
Accident insurance covers the risk of injury/disability/death due to accidents caused by external, violent, and visible means. One should consider taking accident insurance to provide financial support to the family in case of such a catastrophic situation in the future. It is the cheapest insurance product available in India, which covers both death and disability.
Adequate insurance gives peace of mind
You should take care of your and your family’s financial needs by getting the best you can. The purpose of insurance is to cover the risks of unforeseen and adverse accidents. It helps you maintain a good standard of living even in the worst of circumstances. Hence, it can be concluded that having insurance allows you to live your life with peace of mind.
Effects of COVID-19 on the Indian Insurance Industry
The Indian insurance industry is generally well equipped for major loss events including pandemics; However, attending to the financial implications will take time and the insurer will be in the clear. Insurers are acting on multiple fronts as claims payers, owners, and investment executives in response to the growing outbreak of COVID-19. Each has its own discrete struggle, not only for the insurance industry but for the global economy and the public at large.
A year that could have been a surprise year for the Indian insurance sector in terms of premium growth, is suddenly looking at a state where it is an intimidating challenge to match last year’s figures. The most recent three months of fiscal years have traditionally been months that have seen peak collections for the industry.
Now in view of the lockdown in the severe last week of April, the premium collection has started suffering a lot. The setback is huge for the reason that most cities are now closed. Travel insurance is not being purchased by the customers due to flight cancellations. Buying new policies where insurers are required to conduct medical tests is time-consuming and delayed. There is no further new policy for NRIs or people with current travel history. So, in general, the insurance segment has been impacted in multiple directions.
Insurance Premiums Vs Death Claim Challenge
Apart from the loss of new business premiums, the insurance sector is witnessing the challenge of increased death claims. However, the government has moved on positively and has gone for a total lockdown of 21 days even before the death toll reaches double digits. Still, given the clear signs of community spread and the size of the country, nothing can be taken lightly. Insurance agencies believe that it is too early to comment on the exponential growth in death claims in life insurance at this stage. Later, if India can manage the spread effectively, there may be little impact on life insurance claims. Talking about life insurance policies, many organizations will continue to honor claims on existing policies to the contrary; Rates will increase in the price of future policies and may see a decline in the number of policies providing comprehensive coverage,
IRDA Clarification
Corona is going to be a big challenge for the Indian insurance sector which has been seen so far. The infection has a pan-India reach and there is a very real risk of its rapid spread. Treatment of COVID-19 may require prolonged hospitalization which can be costly. Many individuals have some form of health coverage, be it a company or individual health cover. However, since the virus is new, there is considerable uncertainty about whether corona cases will be covered under the proposed health policies. To address the concerns of policyholders and bring clarity on the coverage of coronavirus, the insurance regulator IRDA on March 4 came out with instructions for insurance companies. The IRDA law states: In case of hospitalization, insurance companies shall ensure that cases related to COVID 19 are handled expeditiously.
The Road Ahead
Though insurance firms are listed under the exempted services register under the lockdown, there is no scope of new business with general restrictions on movement. Insurance players with strong digital infrastructure should outperform others if there is a sharp rise in COVID-19 cases (as seen in China and Italy). One of the main challenges for insurers may be empowering off-site work arrangements for their employees and sales force so that they are more flexible and able to deal with increasing claims and quicker response times.
Know about the Changing Face of the Indian Insurance Industry
India is the number one democratic country in the world, with the second-largest population in the world. Also, most of them – around 85% do not have any kind of life insurance. In such a situation, there is scope for the life insurance business in India.
In the last decade, the Government of India has introduced and implemented various reforms in the financial sector, one of them being the opening of insurance to foreign players in this sector. Naturally, almost all the international large life insurance companies were waiting for the opportunity to enter such a vast and developing market.
The opening up of the Indian insurance industry to foreigners with collaboration and joint ownership with large industrial houses and public and private sector banks was highly welcomed and proved to be quite popular.
Almost all the banks like SBI, Indian Bank, ICICI Bank, HDFC Bank, and big business houses like Tata, Birla, and Bajaj entered into this new type of business to provide new service to the Indian population.
Keeping in view the characteristics of the Indian economy, to give a boost to it, and also to remove the ill effects of foreign capital, the Government of India has allowed limited participation to foreign players, and Indian banks or business houses have been given capital, manpower were the main contributors. Delivery, Service, etc. The launch of new products tested across the world was expected to be undertaken, utilizing the experience and expertise of international insurance companies and providing Indian citizens with a wide choice of options.
After reviewing the current situation and the benefits of this reform process, it can be said with certainty that almost all the expectations have turned out to be true. Barring a few instances of absentee complaints by some players, supply of wrong information, and making false promises to people, Indian customers have benefited in many ways.
The monopoly of the Life Insurance Corporation of India—originally a government-owned life insurance company—has been broken and challenged in the process. The entry of very experienced, intelligent, customer-caring foreign players into the field forced LIC to change its stance. Given the heavy competition from foreign players, it had to revise its methods, focus on customer service and improve its working and delivery system. This is a great benefit to the Indian people from these changed circumstances.
The Indian population has responded well to this change. Initially, this change was accepted or welcomed by the economically top or upper class, but now these companies are entering the middle class and are also trying to reach the common man. The coming years will see major changes in the Indian insurance industry.
