Penetration of Life Insurance - Need of the Hour
Life Insurance has unique combination of concept and product. Insurance per se has long been a concept but now it has become an inevitable product as house hold needs, the transformation has become evident in Metro, Tier I and Tier II cities. The Tier III and Rural Market still being laggards. The responsibility of changing mind sets with the people lies not only with Insurance Companies, it is also the duty of Regulator/ government to push the insurnace concept via media to the masses.
In India and elsewhere the Life Insurance products are still being sold to the customer thus making selling cost huge and chances of mis-selling being high. Hence, the Regulator and the Govt should make their earnest approach in creating awareness for the need of insurance products rather than each companies selling their product with misleading assurances(at large at the ground level). The Regulator should take proactive approach towards creating the awareness among the rural populace.
The Concept of Financial Inclusion should not be limited to opening bank accounts. The Financial Inclusion programme should be in holistic manner, it must include all such product viz., Banking, Insurance, Money Market and other instruments available to the remotest corner of the country.
One of the major causes of Rural - Urban Migration is being lack of financial safeguards to rural families., Lack of rain, irrigation and more importantly no life insurance to family head being major causes of Rural -to-Urban Migration. Had there been financial safeguards to the farmers of Orissa, Chattisgarh, Jharkand and Bihar in the nineties and now for the North-Eastern states, we would have not seen as many shanties in Mumbai and other Metros.
In a bid to cover insurance to all citizens the opening up to private sector a decade ago was huge step. However, it has delivered more harm than the goods in the last decade. Finally, the regulator woken up in september last year putting some prudent norms to ULIP. However, much damage has already been done. Now the consolidation phase is expected to come around among private players.
On the part of insurer, they have to be more transparent to the customers even in conventional products, the insurer has to clearly spell out the charges and saving elements and trim their margins and make gains in their volumes. There should be an earnest effort in matching returns on base rates even if it is not equal to bank deposit rates.
Finally, it should be the effort part of regulator, govt and insurers to create awareness to masses. Because, the insurance products are long term commitments where the proceeds are used to strengthen the economy, society and not to forget the families of the insured.
So Lets Live in a world where everyone is protected financially.
Prasath Vedgarb
In India and elsewhere the Life Insurance products are still being sold to the customer thus making selling cost huge and chances of mis-selling being high. Hence, the Regulator and the Govt should make their earnest approach in creating awareness for the need of insurance products rather than each companies selling their product with misleading assurances(at large at the ground level). The Regulator should take proactive approach towards creating the awareness among the rural populace.
The Concept of Financial Inclusion should not be limited to opening bank accounts. The Financial Inclusion programme should be in holistic manner, it must include all such product viz., Banking, Insurance, Money Market and other instruments available to the remotest corner of the country.
One of the major causes of Rural - Urban Migration is being lack of financial safeguards to rural families., Lack of rain, irrigation and more importantly no life insurance to family head being major causes of Rural -to-Urban Migration. Had there been financial safeguards to the farmers of Orissa, Chattisgarh, Jharkand and Bihar in the nineties and now for the North-Eastern states, we would have not seen as many shanties in Mumbai and other Metros.
In a bid to cover insurance to all citizens the opening up to private sector a decade ago was huge step. However, it has delivered more harm than the goods in the last decade. Finally, the regulator woken up in september last year putting some prudent norms to ULIP. However, much damage has already been done. Now the consolidation phase is expected to come around among private players.
On the part of insurer, they have to be more transparent to the customers even in conventional products, the insurer has to clearly spell out the charges and saving elements and trim their margins and make gains in their volumes. There should be an earnest effort in matching returns on base rates even if it is not equal to bank deposit rates.
Finally, it should be the effort part of regulator, govt and insurers to create awareness to masses. Because, the insurance products are long term commitments where the proceeds are used to strengthen the economy, society and not to forget the families of the insured.
So Lets Live in a world where everyone is protected financially.
Prasath Vedgarb
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