How Can Standard Insurance Products Help Customers?
Updated On Jul 20, 2021
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Sustainable growth in the insurance industry primarily relies on consumers making informed choices by picking the right insurance products. Yet in many scenarios, consumers do face trouble in understanding the product rightly. Policy seekers do face issues in several scenarios, be it while comparing products or while making a choice from the plethora of options available in the market. Often these difficulties end up with customers having to delay their buying decisions. During such situations, providing clear, transparent information to the consumers is of utmost priority.
Simplifying the available options can turn out to be an excellent attempt to enhance the trust between consumers and the insurance ecosystem.
Standard Insurance Products Introduced In Market By IRDAI
In the last one year, the various steps taken by the insurance regulator – IRDAI – for the benefit of customers have been really commendable. One of the most promising solutions that the regulator has recently come out with is the Standardisation of Insurance products. With this move of standardising complex insurance policies, IRDAI has enhanced consumer buying in today’s time.
Within the last 6 months, the regulator has introduced several new standard insurance products namely – Aarogya Sanjeevani, Corona Rakshak, Corona Kavach, Saral Jeevan Bima and Standard Personal Accident Cover (Unnamed as of now). The insurance regulatory body maintains that introduction of standard insurance plans will make it easier for consumers to select services owing to the standardization of the process and easy availability of offered services.
Need for Standardisation in Insurance Products
Consumer choice of the right insurance products is amongst the key foundations of the entire insurance ecosystem. Apart from creating trust and confidence in the minds of the policyholders, standardisation also enables insurers to market their products in the best way possible. Moreover, often disputes are raised during the claim settlement process and standardisation plays a key role in reducing such disputes. This is mostly because the terms and conditions of processing and settling a claim under a standardised product are quite simple and transparent.
Due to the multiplicity of insurance products in the market, consumers are often left confused on which one to buy, as at times understanding the policy terms and conditions might come easy. Here, it is the responsibility of the insurers and their distribution channels to correctly explain the offerings of several insurance products.
Standardised products usually cater to a category of customers, especially the first-timers. However, we must remember that most insurance products in India are push products and the success of the standardised plans significantly depends on how well aware consumers are about these plans. With intermediaries aggressively adopting standard products, the products are expected to get more visibility and access.
The standard insurance products remain to be the best buy for first-time insurance buyers who do not have any kind of financial protection and for those who do not believe in saving a part of their earnings for rainy days. People who have higher financial liabilities and can afford to pay a premium for regular health and life insurance policies may opt for comprehensive covers that provide greater financial coverage against unforeseen circumstances like hospitalisation or death of the policyholder.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.