Life Insurance as an industry has evolved in India over time. Gone are the days when this industry was only driven by Life Insurance Corporation of India. But since the year 2000, the government has allowed private life insurance companies also to be a part of it. Besides privatization, foreign direct investment also came into prevalence. This meant that even global companies with the collaboration of Indian corporate started to penetrate into the country.

As opposed to before, there has been significant development and acceptability of insurance in India today. Due to the ever-increasing inclination to a secured future, the importance of life insurance has certainly risen. The fact that India is the second most populous country has helped this cause even further. The opportunities for insurance companies are enormous and one has to ensure that they provide an adequate amount of policies taking into account the requirement of the people.

Types of Life Insurance and the authority regulating them

People today have become extremely aware of having a safe and secure future. The lifestyle which one leads today is very hectic, and this has itself caused a variety of health problems in individuals. These problems are not limited to a particular age but are spread across all age groups. Because of this, it becomes pretty imperative for one to lay hands on a policy that takes into account all the factors and provides substantial returns.

The advent of many companies has ensured that people get to have a policy that is hugely beneficial and at the same time not time-consuming. The policies should be easily understandable, not complicated and user-friendly. To ensure that the user is benefited out of the policy that he is taking and there is proper monitoring of the insurance companies, IRDA, i.e., Insurance Regulatory and Development Authority was set up. The regulatory body ensures to keep all the insurance companies in check and does not allow anyone to deviate from the actual path.

Types of Life Insurance policies available in India are-

-       Term Insurance Policy

-       Money Back Policy

-       Unit Liked Investment Policy

-       Pension Policy

-       Whole Life Policy

These are essentially the policies that one goes for, irrespective of the profession he is into. Let’s understand the benefits which one can derive from these policies-

Term Insurance Policy is one of the most sought-after policies in India today. The idea to take a policy like this is to secure the needs of the immediate family in case something happens to the policyholder. The sum assured gets paid to the family and hence it gives a sigh of relief to them. Apart from the fact that it provides sum assured to the family, it is also pretty helpful to the policyholder to avail tax benefits. These policies are cheaper as compared to other policies.

Money Back Policies are the ones that keep on paying a fixed amount during the tenure of the policy. In case if the policyholder passes away, the beneficiary gets the sum assured.

Unit Linked Investment Policies are the ones where a part of the premium goes into the monthly cover, and a portion is invested in various debt and equity funds. They are almost similar to mutual funds except for the fact that they provide insurance benefits too.

Pension Policy has started to make inroads in the Indian market today. Many companies that are focusing on this policy. People are also becoming more aware of their financial dependence post-retirement, and hence this policy has its importance which cannot be downplayed.

A whole life policy determines that the policyholder enjoys the benefits for the entire life. This policy is not restricted to a particular tenure.

These are the policies that drive the Indian market and have time and again proven to be very useful for people who were in dire need of them.

The importance of Insurance in anyone’s life

It is to be noted that Life Insurance Corporation of India remains the biggest insurance service provider in the country today. The penetration that it has inside the rural belt is second to none. This is due to its policy of engaging independent advisors across the country that act as brand ambassadors and get people on board.

As far as private players are concerned, they are also leaving no stone unturned in ensuring that their spread is enough to cater to the requirements of people. Come to think of it; ultimately it has ended in benefiting the people. The knowledge that people possess with regards to insurance has risen over the past few years. It is not only because of the efforts of the insurance companies but also because people have started to take life insurance seriously.

There are some who have seen people getting benefitted because of a life insurance policy. These examples have indeed given a push to people who probably were not inclined to take life insurance before. Even private banks that have an insurance vertical roll out monthly targets to its employees to ensure that they get good penetration across various segments.

Anyone and everyone can be approached when it comes to taking insurance. Besides, it is not necessary that only one particular policy suffices the need of an individual. The range and the returns associated with every policy vary and hence it is always advisable to go for multiple policies rather than sticking to just one. Though there is still a long way to go when it comes to this aspect, over a period it will surely be seen.

The insurance market is even bigger than we think

The Indian insurance industry is expected to reach 280 billion USD by the year 2020. That’s the way to look forward, and things have started to move in that direction. Government is also ensuring that awareness is spread through aggressive campaigning and promotion, which at the end of the day would lead to people becoming aware of its effectiveness. Word of mouth too plays a very crucial role in it as people who have gained its benefits will always vouch for it and help spread their characteristics effectively.

This is all done because there are still a lot many people who have apprehensions with regards to the entire process. The life insurance market and the target segment are so huge that now and then there is a need to enhance the product that the companies offer. Because the wants and requirements of people keep on changing, there is no alternative to tweaking the products that these insurance companies offer. With so many companies that are into insurance products, it is essential to stand out vis-à-vis competition. Once that is achieved, one can always give an apt reason why people should choose their policy above the competition.

There is still a long way to go

India is a diverse country with multiple cultures. Insurance is the need of the hour. The life insurance market in the country knows it’s potential and come to think of it geographically there is still a lot to achieve. With so many states having numerous districts, it is sure a time taking process when we talk about spreading awareness as well as creating customer base. One aspect which has worked in favor of insurance companies is the network of individuals called advisors that they have. These are independent workers who have done an incredible job when it comes to marketing this industry. They have also played a essential role in ensuring that the list of insurance buyers from their respective area keeps on increasing. 

With so many people enrolling for insurance, the role of IRDA becomes increasingly critical. They are the ones who keep a check on the insurance companies as well as the policyholders. With such a huge market base, there is always a possibility of miss-selling, and it becomes highly imperative that people are aware of what they are ultimately buying.

 At the same time, keeping timely premium payment is also a significant requirement, and the policyholder should always ensure that the track is maintained properly. With so many intricacies involved, having a regulatory authority makes a lot of sense and difference for sure. There is always a level of comfort and faith which is maintained when there is a statutory authority as big as IRDA.

India is the youngest country in the world. The market for insurance companies is bound to rise in the years to come. With such a young population around, a desire to have a good insurance policy will always be on the rise. This is where one can gauge the actual potential this market has. With insurance being a priority amongst youngsters, the stage is all set for the insurance companies to create a mark for them.

With the current pace of stringent regulations and close monitoring by IRDA, the number of companies involved in insurance as well as the number of insured among the public will likely take a big leap in the next decade.