Change is the only constant and for the insurance industry, change is nothing new. The industry is dynamic and changes with the changing trends and demands of consumers. The Insurance Regulatory and Development Authority of India (IRDAI) picks up on consumer needs and effects changes in insurance plans so that they become more consumer-friendly. Even in these trying times, when COVID numbers are breaking all records, the IRDAI has brought about several consumer-friendly changes in the insurance industry.
Let’s have a look at these changes –
1. Withdrawal of long term comprehensive motor insurance plans
The concept of long term motor insurance plans was unveiled in 2018 when IRDAI mandated new vehicles, bought on or after 1st September 2018, to have a mandatory long term third party cover. With that change came long term comprehensive plans which offered long term coverage for third party liability and own damage cover. These plans have, however, been withdrawn from 1st August 2020. Though long term third party coverage would still be mandatory for new vehicles, long term own damage cover has been withdrawn. Vehicle owners can, therefore, buy bundled plans with a long term third party cover and one year own damage cover.
2. New COVID health plans
The need for health insurance was all the more emphasized when COVID struck and people were increasingly being hospitalised. Though normal health plans covered COVID, they excluded the cost of consumables which was high in COVID treatments. That is why IRDAI directed health insurers to launch COVID specific health plans and Corona Kavach and Corona Rakshak were born. These plans exclusively cover COVID and fulfil the short term coverage needs of individuals against the dreaded Coronavirus.
3. Coverage for telemedicine
Telemedicine was a developing concept in India but COVID pushed the concept to the forefront as the nation went under lockdown and social distancing became the norm. Telemedicine includes offsite medical consultations done through telephones, video calls, online chats, etc. As telemedicine became popular in the post-COVID world, IRDAI asked insurers to cover the medical costs incurred on telemedicine if their health plans offered coverage for doctor’s consultations. So, now, health plans have become all the more inclusive as they cover telemedicine costs too.
4. The increasing reliance on the internet for buying insurance
IRDAI has also asked insurance companies to boost their online sales so that policyholders can buy policies without stepping out from their homes. As a result, more and more insurance plans are being sold online for ease of buying. The KYC verification has also gone online as companies are resorting to video calls and image uploads of KYC documents for verification purposes.
5. Elimination of physical signatures for buying life insurance
Another new concept introduced in the life insurance segment is the elimination of the need for physical signatures on proposal forms. Now, individuals are allowed to buy insurance plans with online proposals which are verified by confirmation mails or OTPs rather than physical signatures of policyholders. This has also been done to comply with social distancing norms and to allow individuals to buy life insurance safely from their homes.
6. Concept of instalment premium in health insurance
COVID considerably impacted the financial position of many individuals negatively. Keeping affordability in mind, IRDAI made health insurance premiums more pocket-friendly by introducing the instalment mode of payments. Now, health insurance plans are allowing individuals to pay their premiums in easy instalments rather than in lump sum. This change has two benefits. One, individuals would be able to afford a comprehensive health insurance plan with an optimal sum insured level. Two, the popularity of health insurance would increase thereby increasing their penetration too.
All these changes are a step in the positive direction for policyholders. These make insurance plans more attractive, customer-friendly and easy on the pockets. These changes would definitely contribute to the penetration of insurance in India which actually requires a boost.
(By Dhirendra Mahyavanshi, Co-Founder, Turtlemint ( An InsurTech Company)