Irda chief favours single policy for low income groups

Specific circumstances of low income groups like unstable income, migration for work and others should be considered, he said

A single policy covering all the basic insurance needs together with options for customisation would be more effective to increase insurance penetration in India, rather than having multiple policies to obtain basic cover, according to Insurance Regulatory and Development Authority (Irda) chairman TS Vijayan.

“Currently, a typical general insurance product covers specific risks of fire, health, personal accident, loss of belongings under separate policies. This approach is very cumbersome and is a major road block in increasing insurance penetration,”  Vijayan said while inaugurating an insurance conference organised by the Associated Chambers of Commerce and Industry of India (Assocham) here today.

Specific circumstances of low income groups like unstable income, migration for work and others should be considered while designing insurance products to best suit their needs besides adopting cost-effective ways of distributing insurance policies, he said.  

The Life Insurance Corporation (LIC) and the other four public sector general insurance companies had started 5,000 micro offices in rural areas in the last one year to improve the physical reach to customer besides bringing out innovative products, according to G Srinivasan, chairman and managing director of New India Assurance Company.

About 5 million micro insurance policies, covering 13.9 million lives, were issued in 2012-13 and the LIC had contributed more than 90 per cent to the micro insurance business, according to him.

Meanwhile, a KPMG-Assocham report on old-age security released on the occasion said poor and economically dependent senior citizens in rural and urban areas required an urgent need for support in terms of universal healthcare, which will provide for both inpatient and outpatient treatment across secondary and tertiary care.