Life insurance companies are looking to create awareness and understanding about the importance of having a cover
By the end of February 2019, the life insurance industry will be ready with a mega Rs 100 crore campaign to create awareness about the importance of buying a policy. A joint initiative of the life insurers and industry body Life Insurance Council, the campaign will look at busting myths and try to make insurance a pull product.
The success of the 'Mutual Funds Sahi Hain' campaign by Association of Mutual Funds in India (AMFI) could have been a motivator for the insurers to come together for this mammoth initiative. LIC is expected to contribute more than 70 percent for this initiative.
But how the insurers bridge the trust deficit among policyholders through this campaign will be an area to watch out for.
There is a perception among a certain set of policyholders that insurance companies delay payment of claims. Endowment plans that offer a lumpsum amount on the completion of the policy term are more preferred than the essential pure term plan that offers a payout only if the policyholder dies during the policy tenure.
When insurers have tried to offer life insurance together with a home loan, customers have been convinced to buy the product. This is because any untoward incident will lead to the deceased's family members bearing the burden of the Rs 20-40 lakh loan that an individual might have taken.
However, enough stress has not yet been given on how the death of one earning member may mean families being pushed to the brink of poverty. Yes, there have been many old advertisements about wives, mothers living a comfortable life because their husband/son had taken a policy. These campaigns have failed to evolve with modern times.
What about the single mother/father who is bringing up a child? Won't it be relevant for them to buy an insurance product? What about a farmer in rural Maharashtra whose 10-member family depends solely on his earnings? Or a delivery executive at an e-commerce firm with ailing parents?
Natural and man-made calamities including the floods at Assam, Nagaland and Uttarakhand, Mumbai terror attacks or the Bhuj earthquake have occurred time and again causing several deaths. However, these incidents have been unable to boost the sale of insurance.
Maybe getting real-life case studies of people with and without insurance could jolt people out of their ignorance.With a 1.2 billion population with social security schemes that provide little or no coverage, life insurance is a necessity. Now whether the Rs 100 crore campaign merely grabs eyeballs or is able to bring behavioural change will be interesting to watch.