ACKO Life commits to pure protection model, targets rising mis-selling in life insurance

ACKO to sell only pureplay life insurance

• ACKO Life drops investment-linked insurance, focuses on pure protection plans.
• Move targets mis-selling and under-insurance in India's life insurance sector
• Company to offer only term life insurance, focusing on consumer protection

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ACKO Life on January 29 announced a strategic shift away from traditional life insurance models, committing exclusively to “pure protection” products as it seeks to address rising mis-selling and widening under-insurance in India.

According to a press release, the move comes against the backdrop of a 14.3 percent year-on-year increase in mis-selling-related grievances across the insurance sector, as reported in the latest IRDAI Annual Report. By adopting what it calls an “unmixed” model, ACKO Life will offer only pure term life insurance products, consciously staying away from bundled insurance-investment offerings such as ULIPs and savings-linked policies.

The company said its approach is aimed at prioritising consumer protection over product complexity, positioning itself as a life insurer defined by what it refuses to sell rather than by product diversification.

The announcement comes at a time when the Indian life insurance sector is facing a structural contradiction. While total life insurance premiums have grown to nearly $100 billion, life insurance penetration has stagnated, declining to around 2.7 percent of GDP in FY25. Industry experts describe this as a situation where India is “insured on paper but unprotected in reality”.

This gap is reflected in the country’s growing mortality protection gap — the financial shortfall families face after the death of a primary earning member. According to the Swiss Re Institute, Asia’s mortality protection gap has widened 35 percent since 2017 to $132 billion, with India among the most vulnerable markets.

ACKO Life said decoupling insurance from investment is critical to addressing this deficit, arguing that mixed products dilute protection through high premiums, complex structures and lower cover values.

In a LinkedIn post, Varun Dua, Founder of ACKO, criticised investment-linked insurance products, stating that they often create an illusion of returns while delivering inadequate protection.

“Life insurance has one job: to protect your loved ones from uncertainty. At ACKO Life, we made the hard choice of not mixing life insurance. We refuse to dilute protection with 50 other ‘benefits’ because we believe it doesn’t add any value. It only adds confusion,” Dua said.

ACKO Life said its “pure-play” strategy is designed to simplify consumer decision-making and improve insurance penetration by offering high-value, low-cost term cover focused solely on financial protection.

Founded in 2016, ACKO entered the life insurance segment in 2023 after receiving regulatory approval, following its expansion across auto, health and travel insurance through a digital-first, direct-to-consumer model.