Encouraged by the success of the Prime Minister’s flagship schemes, the Insurance Regulatory and Development Authority of India (Irdai) has formed a committee with the specific objective of bringing in more such simple products.
The committee, which comprises actuaries and heads of several fund houses, will submit its report in two months.
“The main aim of the committee is to come out with more simple products, which are easy to understand with a very clear message,” said the head of a top insurance company who is also a member of the committee. “In the recent past, we have seen many insurance companies coming out with complicated products and mis-selling to investors.
This resulted in customers either surrendering the policy or discontinuing payment of premium. We need to bring in products that are in line with the two Pradhan Mantri schemes,” he said.
In May, the Prime Minster launched flagship schemes — Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Atal Pension Yojana — which received a positive response.
Over 11.13 crore people have subscribed to the three schemes so far. “Even the Irdai chairman has said that we need to take a leaf out these flagship schemes. Our main focus is to bring in similar policies across the industry. Investors should know what they are paying for and how they can claim it (their money),” added the committee member.
The Pradhan Mantri Suraksha Bima Yojana provides accident and disability cover of up to Rs 2 lakh at an annual premium of Rs 12 whereas the Pradhan Mantri Jeevan Jyoti Bima Yojana offers a term life cover of Rs 2 lakh at an annual premium of Rs 330.