Online insurance products are buzzing in today’s times. Insurance companies too are revamping their website and are offering host of insurance products online, with most citizens getting tech savvy and evincing interest to buy products online due to the ease in transacting. But is easy in transacting the only criteria while buying an insurance policy?

At present the Insurance Regulatory and Development Authority (IRDA) and the Finance Ministry are at odds over over nod for online sales of insurance policies. The Finance Ministry is of the view that insurers need not seek approval for insurance sold online, while the IRDA feels that e-products too should be go through their approval, as it is a practice followed globally.

The Finance Ministry is seeking to push online insurance products because it believes that cheaper plans available online can help expand the coverage across the country from the abysmally low 4.4% for life insurance and 0.7% for nonlife insurance. They believe that approvals for online products causes unnecessary delays, and as far as the pricing is concerned insurers and web aggregators can work that out within the IRDA ceiling.

The IRDA’s stand is that, online products need to be assessed differently than those sold through the intermediaries. Moreover in order to protect the interest of policyholders, they want a pre-set format to ensure that the product sold online is what the customer asked for. The insurance industry players are of the view that a separate clearance for online policies is a tedious task and often acts as a deterrent.

We believe that, insurance products pushed online should go through regulatory approvals as such a filter would indeed protect the interest of customers. Having a pre-set format to ensure that the product sold online is what the customer asked for, will help to reduce the cases of mis-selling and help in keeping a check. While short-listing an insurer to indemnify your risk(s) one must evaluate the following aspects amongst others:

 

• History and track record of insurer (should have been in business for at least five years)
   
• Quality of service standards
   
• Management and underwriting norms
   
• Claim settlement procedures
   
• Claims to settlement ratio
   
• Persistency ratio
   
• Premiums charged by the company
   
• Other facilities
   

Evaluating the above points before buying any type of insurance policy will certainly help you to select the right insurance policy for yourself and your family. It will also ensure that you don’t feel betrayed or a product is mis-sold to you.

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kcmahapatra12@gmail.com Dec 28, 2012 In a liberal open ended economy insurns e-product is most.To protect client from miss selling.cheating, misguide,overburdening in the sense transit cost etc it is essential .To increase the growth rate of insurance in the rural market specific regulation is highly needed.It may reduce the agent(intermediators)dominant in the market.Beside this commission burden will reduce the policy holder where on an average new business and 5% on renual commission to policy holders from premium.So it should be as early as possible by IRDA.

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