Insurance Regulator in India (IRDAI) is leading the insurance growth and penetration in India by offering various common products to reduce ambiguity in the offerings. It has recently come out with a bundled or combo insurance product which contains health, life, accidental risk cover and property cover. This product, named as “Bima Vistar” is said to be affordable to the masses and provide comprehensive cover to the citizens.
Till date, all these products are offered on a stand-alone basis and one or two or bundled together such as Personal accident risk cover offered as an add-on in the Life, Property and Health insurance plans. It would be costly and cumbersome for people to administer 4 different policies and hence the need arose to introduce this combo product. This plan would also expedite the claim settlements by integrating the death registries onto a common industry platform thereby reducing the complexity in death claims. To ensure seamless claim settlement, a unified platform called “Bima Sugam” would be created to integrate insurers, intermediaries and customers thereby creating one stop solutions for customers. Web aggregators, brokers, agents, bank agents etc. would act as facilitators on this platform for selling insurance to the customers. Customers need to create an e-Insurance Account (E-IA) to avail the facilities in Bima Sugam where they can store and access all their policies online.
This product would bring together the life and non-life insurance companies together and create a transformative “UPI-like” movement in the insurance industry. Bima Vistar is aimed to address the two major concerns of the general public: affordability and accessibility. IRDAI aims to increase the insurance penetration in India and reach their aim of “Insurance for All '' by 2047. In addition to this IRDAI has planned to introduce “Bima Vahak '', an initiative that would help insurance reach the last mile in India. Under this initiative, each Gram Panchayat would have a “Bima Vahak '' whose task is to sell and service the bundled insurance products. IRDAI intends to form an insurance distribution channel consisting of women only thereby fostering higher trust and increase insurance awareness in rural areas as well.
All the three combined are known as “Bima Trinity” and IRDA is planning to increase the penetration of insurance in India by offering affordable and accessible insurance products with combo products.
Now, although these products are to be offered as a combo product, managing claims might get a bit difficult. Firstly, the underwriting guidelines would be different for different products; age and health condition is the main factor for life and health insurance whereas occupation is the deciding factor for Accident risk cover and Property value is the determinant. Secondly, the sum insured of the combo product would be very less such that it suits the rural and semi-urban areas and cannot be an alternative for stand-alone plans with high sum insured. If you want to purchase a high sum insured plan or policies with varying sum insured, it might not be possible with the Bima Vistar. It is aimed to increase insurance awareness and the focus would be the rural areas and underpenetrated areas in India. Third, the product doesn't mention if the coverage would expire on occurrence of an event. For example, if the insured is met with an accident and the accident cover claim is settled, then there is no clarity if the insured would be eligible to take the cover at the time of renewal.
While there seems to be a lack of clarity on these claim processing aspects at the moment, I am sure, the picture would get clearer as we go ahead. And more importantly, Insuring India by 2047 seems like an achievable goal.
By- Susheel Agarwal
Author profile - Susheel Agarwal is the Founder & Director at Ethika Insurance Broking Pvt Ltd. He has been an active insurance industry expert for the last 17 years. Ethika Insurance is a new-age Insurtech startup that leverages technology to augment users. Susheel Agarwal is a celebrated bootstrap founder and he advocates for Employee happiness in the corporate industry.