Covid-19 has proved to be a “Penny Dropping Moment” for customers of the Indian insurance industry as they are now more appreciative about the value of life insurance. Prior to this pandemic, even educated elites had been procrastinating the purchase of life insurance. And even when they purchased, the insurance cover had always been grossly inadequate. This mindset is probably changing now and customers are now looking for protection products. Life insurance should be purchased by each and every person at the beginning of their career.
But many young people consider themselves reasonably healthy and strong and do not think they require the support of an insurance plan at the prime of their life. The irony of life is that some diseases like Covid-19 do not spare even the fittest and the healthiest among us. The health ministry has reported that 48.8% of deaths due to Covid-19 are of those below 60 years of age. That shows how vulnerable even the young population is to Covid-19. Nobody knows when life will spring a nasty surprise on us. People are slowly coming to terms with this reality of life. That is good for them and for their near and dear ones.
Innovative insurance products
Many innovative term and savings oriented life insurance products have always been available in the market. Hopefully, more of such products will be launched soon as many interesting products are in the “Sandbox” stage currently. Although Ulips are valuable products for wealth generation, they cannot be considered substitutes for protection and saving products. For a youth, a protection plan is an excellent option.
The best option is to take both term and savings-oriented products together. In savings oriented endowment policies, you can get money at periodic intervals or whenever you need the money, in the form of policy loans. You can repay the loan as and when your economic condition improves. In the absence of such safe arrangements to avail loan, the poor may be forced to borrow money from local money-lenders at high interest rates.
Insurance companies are marketing products through digital channels. They are increasing customer touch points through extensive use of WhatsApp, chatbots, blogs and Mobile Apps. Some are showing videos of fitness, personal hygiene, wellness, and of course, financial planning. Are these initiatives reaching the target audience? Yes, because India has 504 million active internet users now and 55% of the users are from rural India (IAMAI Report). Covid-19 has made people more health-conscious. Perhaps there will be a lasting change in the lifestyles of people. That will help both the customers and the insurers.
Strong online capabilities of the insurers are enough to keep in touch with the customers 24×7. Customers have become more tech-savvy and are comfortable using digital tools to buy groceries, medicines and other essential items of consumption. So, there will not be any problem of “Business Continuity” for the insurers.
Alternate channels of premium payment, online completion of sales process and greater use of self-service options available for customers will be the new normal for the industry. I believe, even the tied agents will use more of digital tools rather than personal visits to stay in touch with their customers. The marketers who show concern for the well-being of their customers and extend a helping hand to the distressed at this hour, will be in a better position to bolster their image and do good business in the future.
The writer is assistant secretary, Kolkata Audit Centre, LIC