Use Telenor's free life insurance to increase your coverage

Being a micro-insurance product, the sum insured is restricted to Rs 50,000

Mobile operator Telenor claims that it has become the largest micro insurance policy provider in India. It achieved this by offering free life insurance to its mobile customers. At present, 17 million (1.7 crore) customers have enrolled for the offer since it started in October last year and nearly eight million were insured in January alone.

A free life insurance does sound exciting. But the maximum cover that one can get is mere Rs 50,000. That’s because Telenor is eyeing the rural market that is under-served by insurers. “Though these numbers appear to be small for those being insured, this amount would be an additional financial help which otherwise would be missing,” says Upanga Dutta, chief marketing officer, Telenor (India) Communications.

He further explains, for those in urban areas or more aware customers, it is easy to buy insurance but issues like lack of awareness, cumbersome enrolment process, cost of insurance and lack of trust in claim settlement keeps the majority away from insurance. According to him less than four per cent Indians have insurance cover of any type.

The ‘free’ insurance cover depends on the monthly recharge. Every month the customer is required to do a predetermined minimum recharge, which is conveyed through SMS. The insurance amount is 100 times of the recharge value. If an individual has got three recharges done in a month amounting to a total of Rs 500, then the cover will be Rs 50,000 (500x100). The minimum cover one can get is Rs 5,000 with a recharge of Rs 50. The sum insured for the current month is determined by the recharges done in the past month.

Telenor has partnered WITH Shriram Life insurance and MicroEnsure for this. New as well as old customers can avail the scheme. There’s no age restriction.

While there’s no similar life insurance product, the closest it can be compared to is Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). However, one should not go for Telenor mobile services only because they want life insurance coverage. The primary objective in this case is opting for mobile services because of attractive tariff plan or better coverage – not because of the life insurance. PMJJBY, other the other hand, offers a higher sum insured at a very low cost. If you have option to enrol for both the plans, PMJJBY should be your primary cover and Telenor’s plan can be used to increase your overall insurance.

The PMJJBY offer Rs 2 lakh cover on payment of Rs 330 every year. Telenor’s cover is free. Though the sum insured is small in case of Telenor, it does not involve lot of documentation and timely premium payment. Telenor’s scheme does not have any age restriction. The PMJJBY is available for bank account holders in the age group of 18 to 50 only. If the person misses payment in PMJJBY, the insurance is discontinued. The chance of policy getting discontinued in case of Telenor is low, as it depends on the average monthly recharge and continuation of the services.

In the past four months, the company has received around 20 claims with complete documentation of which it has settled 14.

The company says that the telecom subscriber needs to separately enrol for this. A subscriber can go to the company retail store, can also be done via the self-care (*121#) menu, and also through the IVR/call centre.

The customer just needs to select the option and fill in some details like nominee name. The beneficiary can be the spouse, parents, children or any relative. In case there is no nominee, the claim would be payable to the family member who is the holder of the SIM, after the required paperwork.