A Fit-For-All Cover Waiting To Be Unveiled

IRDAI has standardised the terms and conditions and inclusion and exclusions for life and non-life cover policies to offer subscribers a perfect entry-level package that would promote insurance penetration in India

- Nirmala Konjengbam

Stella was in her early school days when her father one day drew up a vertical line on a piece of paper and asked her if that was long or short. The child couldn’t figure what to say. Her father smiled and drew up a small line next to it and then asked the same question again. She was prompt this time: “Long.” She got her first lesson in comparison that day.

Years later, Stella Rodrigues encountered a largely similar situation, when she went to buy a life cover. There were so many options that she couldn’t figure which would be the best fit for her. In a market of simmering competition, insurers are constantly in the process of innovating their products to match the various requirements of the buyer. Such an extensive spread of options made her confused over the terms and conditions and the inclusions and exclusions.

Stella wanted a simple life insurance policy at the lowest premium but she couldn’t zero in on one because of the highly complex nature of the policy parameters.

This has long been a major hindrance in the buying process. When customers do not understand the product rightly, they delay the decision of making the purchase. They also often shy away from buying policies because lack of clarity in the process may create dispute at the time claim settlement. The result is obvious. The insurers suffer a loss of faith and confidence among their customers.

Confused and frustrated, Stella too shelved the plan, and moved on to invest the money in fixed deposits.