The Best Time for Insurance May Have Just Arrived

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According to an India Brand Equity Foundation report, India’s insurable population is anticipated to touch 750 million in 2020, with life expectancy reaching 74 years. Furthermore, life insurance is projected to comprise 35 per cent of total savings by the end of this decade, as against 26 per cent in 2009-10.

From the regulatory perspective, there are many positive changes happening; such as the recent approval by the Government to allow 49% FDI in insurance companies. This will only mean more money pumped into the Indian insurance economy, to make further inroads into the wide-spread market.

Erstwhile, there are many demographic factors that are driving the huge change, as far as life insurance is concerned. There is a huge middle-class population in India, which is self-aware of health, wealth, and longevity. This may be due to access to better healthcare facilities—which again is an offshoot of health insurance stronghold in urban areas. So there is this burgeoning middle-class population that wants to protect their family, and also have a sound retirement income base.

On the flip side, in the general insurance sector, penetration of health insurance is still very low in India. One reason is that is considered as expenditure rather than investment for risk aversion. Besides, there is an attached factor of huge out-of-pocket expenditure; which is not yet covered under the health insurance schemes. As a result, people in semi-urban and rural areas resort to Government healthcare centres to avail affordable medical treatment; even risking factors like institutional deliveries or protection against critical care illness.

The Government of India has taken notice of the situation and recently launched two schemes in the last budget of 2015-16. One is the Pradhan Mantri Suraksha Bima Yojana (PMSBY), which is a Personal Accident Insurance Scheme. The second is Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), which is the government’s Life Insurance Scheme. These schemes have been launched with an objective to make insurance fundamental at a very affordable cost. It can be availed through private and government agencies both.

There have been recent initiatives in the insurance sector which deserve a mention here.

• Delhi government has launched an insurance scheme, with a nominal premium payment of Rs 3,000. People can avail the scheme in order to get themselves treated for critical illness at government hospitals in the city

• LIC has included a third gender option in its proposal forms

• IRCTC website users can now opt for an insurance cover of Rs 10 lakh for a premium as low as Re 1. A valid ticket holder, that is passengers like you and me can now get an insurance cover against death, injury and disabilities caused due to accidents.

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