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Range of life insurance covers grows larger

Range of life insurance covers grows larger

Range of life insurance covers grows larger


Booming economy, wealth and assurance of steady future seems to be making people venture in financial products such as insurance.

The trend is visible in the latest insurance data put out by the Insurance Regulatory and Development Authority (Irda). It shows that though the combined premium collected by the life insurance companies has gone up, the number of policies issued by life insurance companies has gone down over the corresponding time in the previous year.

This means that the average ticket size or money invested in life insurance has gone up compared with the previous year. Industry official said this has been a departure from trend over past 2-3 years as premium collections by insurers was going down while the number of policy issued increased.

The number of policies sold by life insurers has fallen from 3,82,03,056 in January 2010 to 3,50,31,875 in January 2011. However, the premium collected has increased from Rs 55,954 crore in January 2010 to Rs 64,505 crore in January 2011.

Insurance experts say the average ticket size of a policy has gone up since people are no longer worried about unsure future. They do not want to keep more cash in hand and are comfortable with locking their money in long term insurance products.

SB Mathur, secretary general, Life Insurance Council, said, "Investors have regained their confidence. Unlike in 2009-2008 when sentiments were low, people were deferring their investment decisions. Now, future outlook is brighter. This shows that prosperity level of Indians has gone up." Life Insurance Council is the industry body of life insurers in the country.

Insurers feel that part of the reason for rise in premium is also due to change in overall mix of products being sold by insurance companies. While unit-linked products had dominated sales for the last 3-4 years, now investments are coming in traditional, money back plans and so on.

Insurers are witnessing surge in single premium plans. Single premium plans require one-time investment and the premium is a much higher compared with products that require paying smaller premiums over several years.

GV Nageswara Rao, CEO and MD of IDBI Federal Life Insurance Company, said, "Average investments in life insurance has definitely gone up. We have noticed that customers are more comfortable with single premium policies which requires higher investments."

Source: [Mydigitalfc.com]
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Range of life insurance covers grows larger