The Modern World of Life Insurance in India
While Indian and non-Indian insurance entities existed before, the establishment of the Life Insurance Corporation (LIC) in 1956 is considered the true beginning of the life insurance industry in India. The company enjoyed a monopoly in the insurance sector until the early 1990s, when the government reopened the sector for private entities.
Fast forward to the present, and we now have 50+ life insurance and non-life insurance companies in India. Like every other sector, modern technologies and heightened customer expectations have disrupted the life insurance sector.
Four factors that have contributed to building the modern world of life insurance in India are discussed below-
Without any doubt, the biggest disruptor in the insurance sector has been the introduction of digital technologies. Thanks to the internet, customers can now search, compare, and purchase life insurance policies from the comforts of their homes without ever meeting an insurance agent.
Every aspect of purchasing and renewing a life insurance plan can be conveniently and securely managed from a computer or even a mobile phone. Customers can also access all the information they need about insurance plans to make an informed buying decision.
- Formation of IRDAI
Mis-selling and fraud were two of the biggest menaces in the life insurance industry. But the formation of IRDAI (Insurance Regulatory and Development Authority of India) has helped curb the issue significantly. The statutory body is responsible for the overall development and supervision of the insurance sector in India.
The IRDAI has introduced stringent regulations that every registered insurance provider in the country must abide by in order to continue their operations. Non-compliance could lead to penalties and even cancellation of insurance company license.
The hyper-competitive environment in the insurance sector requires insurers to remain innovative, flexible, and creative with their product offerings. For instance, in the past, most insurers only offered whole life insurance and endowment plans. Now, top insurers in the country offer an extensive range of insurance plans.
Some of the top options include term plans, Unit Linked Insurance Plan (ULIP), retirement insurance plans, money-back insurance plans, and child protection plans. The rising competition has also helped make life insurance policies more affordable.
- Age of Personalisation
Apart from the extensive range of insurance products, policyholders can also personalize their life insurance plan. For instance, in ULIPs, policyholders are free to choose between equity, debt, and balanced funds as per their risk appetite and long-term objectives. They can also switch between funds after purchasing the policy.
In the past, it was the insurer who decided how the policyholder’s money would be invested. Thanks to personalization options, life insurance products now better meet the needs, expectations, and risk appetite of the customers.
Embrace New-Age Life Insurance Products
The life insurance industry in India has done a commendable job of keeping up with the changing times and fulfilling the needs and expectations of modern customers.
Customers searching for a feature-packed life insurance product can consider a leading insurance company to experience the new world of insurance that is convenient, highly affordable, and more transparent.