National Insurance Awareness Day, observed every year on June 28, reminds us of the importance of insurance. In this world full of uncertainties, a life insurance policy plays a crucial role for you in protecting your loved ones financially in case any untoward events occur with you during the policy period. In such an event, the insurance company pays the assured sum to your nominee, helping your family manage tough times without financial stress.
Buying a good life insurance plan is essential because it not only gives your family a financial protection but also comes with other benefits depending on the policy type. A life insurance policy is a legal contract between you and a life insurance provider.
Srinidhi Shama Rao, Chief Strategy Officer at Bandhan Life Insurance, offers valuable insights into key considerations for individuals purchasing life insurance. Rao shared 5 smart tips for new insurance policy buyers.
Assessing coverage needs:
Calculate how much financial support your family would need in your absence. This includes factors like daily expenses, future financial goals (such as education or marriage expenses for your children), outstanding debts, and other liabilities.
Knowledge of policy terms and features:
Read and understand the policy terms, including coverage duration, premium payments, exclusions, and any additional benefits or riders offered (such as critical illness or disability riders). Ensure the policy aligns with your financial goals and provides adequate coverage.
Compare plans:
Research and compare different insurance plans to find one that best suits your needs. Term insurance, savings plans, and ULIPs all cater to different needs and goals.
Consider key factors:
Premiums, coverage amount, flexibility in premium payments, and the claim settlement ratio of the insurer should be carefully assessed.
Ease of buying:
Look for an insurance company that offers an easy and hassle-free buying process. At Bandhan Life, we offer simplified buying journeys with zero documentation.
The IRDAI constantly updates its guidelines to maintain transparency, allowing you sufficient time to review and comprehend policy terms, Rao said adding that customers should always discuss their policies in detail with the insurance agents/providers to be able to select a policy that covers their family’s financial needs effectively.
Sumit Rai, MD & CEO of Edelweiss Life Insurance, discussed the achievability of the regulator’s ambitious vision of ‘Insurance for all by 2047’ and highlighted the sector’s significant contributions to nation-building.
“For decades, the insurance industry has not only been enabling social security but also contributed heavily to nation-building. As of FY23, the industry has managed assets worth nearly Rs 55 lakh crores and paid out claims to the tune of almost Rs 5 lakh crores. And yet, there is much more to be done!,” Rai said.
To achieve the regulator’s bold vision of ‘Insurance for all by 2047’, it’s essential to improve insurance penetration, which hinges on increasing consumer awareness and trust, he suggested. “Towards this end, there has been a heightened effort by the industry towards completely transforming buying experiences, innovating products and services, and promoting awareness through educative campaigns.”
Insurance for All by 2047: Progressive regulatory reforms
Supported by a range of progressive regulatory reforms, the regulator has effected wide-ranging simplification in products, and processes, and brought about transparency for the policyholders, according to the CEO of Edelweiss Life Insurance.
A key initiative implemented by the regulator – State Insurance Plan – has led to industry-wide efforts in interacting with public at large to help them understand insurance as an instrument, and in turn reducing the trust deficit in the industry,” he added.
By fostering a healthier and more inclusive insurance landscape, these regulatory changes have prompted insurers to innovate, reorient the way they deliver advisory, and make way for improved accessibility of insurance for the consumer.
India’s progress towards becoming the 6th largest insurance market
With these collective efforts, India is on track to become the world’s 6th largest insurance marketplace by 2032, marching steadily towards the ambitious vision of ‘Insurance for all by 2047.
