The insurance regulator is mulling new initiatives to double insurance penetration in the next five years. One of the imminent changes in the area of distribution is to allow commercial banks to set up bancassurance tie-ups with as many as nine life insurers, nine non-life insurers and nine health insurers.
An insurance product is not as simple as a consumer product bought and sold over the counter. If it is a life insurance product, you can not switch your insurer every year. You have to be very sure that the product purchased is the right one for you and you have understood the policy conditions well. There are waiting periods, exclusion clauses, riders, non-forfeiture regulations and settlement options.
Bank personnel do not generally know the nitty-gritties of insurance products. Now that they will be required to sell products of far too many insurers, they will find it difficult to study features of so many products and then suggest the right ones to their customers.
However, insurance penetration can rise only if the policies are kept in force for a long time. Insurance awareness drives by the regulator and central/state governments can make insurance a “pull” product.
Evaluate the product
One should never buy life or health insurance in haste. You do not know what prompts a specified person to recommend a particular product over another. You have to study the product features in detail from the websites of the insurance companies. After zeroing in on one or two products, talk to the employees of insurance companies in addition to the specified bank staff. In most cases, these employees visit the offices of the commercial banks from time to time. You need to clear all your doubts before putting your signature on the proposal form.
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Some insurers do pre-issuance verification calls before issuing policies to check whether customers know what they are buying. Even if no one calls from the company, you should call up the insurer or visit the insurer’s office to know the benefit structure, exclusions, waiting periods and other policy conditions which may take you by surprise in future in case nobody has taken the pains to explain these to you. Try to talk to an insurance executive who does not gain financially from the sale of the product.
Understanding various after sales services
It is very important to know how the insurer is going to provide various post-sales services. Insurance is not just about premiums getting debited from bank accounts on the renewal dates. You need to be in touch with the insurers for a wide variety of reasons. So, touch base with them in your own interest. Visit their website often to keep abreast of changes in policy conditions and grievance redressal mechanisms.
The writer is an insurance industry analyst
Insure it right
All insurance products look similar but they are not at all so
Visit your insurer’s website often to keep abreast of changes in policy conditions