Bima Vistaar: How this all-in-one insurance policy can offer you multi-risk coverage

Bima Vistaar set to be reality soon

The Insurance Regulatory and Development Authority of India (IRDAI) has proposed the pricing for Bima Vistaar, its rural India-focussed composite insurance product construct.

Individuals buying this policy will have to pay annual premiums of Rs 1,500, while the rate fixed for families is Rs 2,420, said media reports and industry officials who attended Bima Manthan, an event organised by the regulator on April 25 and 26. However, the insurance regulator is yet to issue any formal circular notifying premiums or sum insured.

Here's what Bima Vistaar will offer.

What is the insurance regulator’s objective behind getting insurance companies to offer this product?

Bima Vistaar is one of the main tools envisioned by the IRDAI to take insurance to India’s hinterlands. The idea is to make a simple, all-in-one, product that rural households can buy and can get all the important covers at the same time, instead of having to buy a separate health insurance, a separate life insurance, a separate accident insurance cover, and a separate property cover.

“To take insurance to each gram panchayat, a tech-led women-centric localised insurance force called Bima Vaahak is also being conceptualised to distribute multi-line benefit-based product with parametric triggers, that is, Bima Vistaar, which may greatly enhance accessibility, availability and affordability which will significantly contribute to insurance inclusion and penetration,” IRDAI Chairman, Debasish Panda, had told Moneycontrol in an interview in 2023.

Despite a major thrust on deepening insurance penetration, it remains low at 4 percent, down from 4.2 percent in 2021-22. While life insurance penetration dropped marginally from 3.2 percent in 2021-22 to 3 percent in 2022-23, non-life insurance penetration did not grow and remained unchanged at 1 percent.

Also read: Bima Sugam may make policy buying easier, cut commissions

How will Bima Vistaar work?

Bima Vistaar is a mass, bundled insurance product comprising life, health, accident, and property covers to be offered by public and private insurance companies. The policy is aimed at fulfilling the critical insurance protection needs of India’s rural population, in particular, through a single product. It is a benefit-based policy – that is, if the event were to occur, the pre-decided amount, the sum insured, will be paid out to the policyholder or her nominees and the policy will cease to exist.

This product forms part of IRDAI’s Bima Trinity initiative, which also includes online insurance marketplace Bima Sugam and distribution channel Bima Vaahak. IRDAI is banking on the troika to help further its goal of ‘Insurance for All’ by 2047.

“The comprehensive coverage offered by the Bima Vistaar policy underscores its importance in safeguarding individuals and families against various risks and uncertainties. This initiative not only encourages more people to invest in insurance for their protection but also promotes financial inclusion. The competitive pricing of Bima Vistaar is expected to benefit many individuals and families by providing them with a reliable insurance solution at a reasonable cost,” said Narindra Bharindwal, Vice-president, Insurance Brokers Association of India (IBAI).

Also read: IRDAI clears the decks for Galaxy Health Insurance, rolls out revised regulations for industry, policyholders

What will be the premiums and sum insured?

The IRDAI has not yet officially spelt out the premiums or the sum insured for each of the covers – life, health, accident and property protection. However, industry officials and reports suggest that individuals will have to pay annual premiums of Rs 1,500 to buy the policy, while families can cover themselves for Rs 2,420.

“IRDAI has introduced Bima Vistaar to make insurance affordable for even the rural masses, with a premium of just Rs 1,500 per policy that offers life, health, personal accident as well as property insurance coverage. It also comes with a family floater option for those looking to secure their loved ones with a basic social safety net against both life and non-life risks,” says Nilesh Parmar, Chief Operating Officer, Future Generali India Life Insurance.

As per people aware of the discussions, the sum insured could be fixed at Rs 2 lakh. Another industry official Moneycontrol reached out to, however, said that while these figures were indeed discussed, the IRDAI is yet to take a final call on these crucial matters. Hence, the regulator has chosen not to release the details in its press release issued on April 29.

When will the product be available in the market?

IRDAI has not yet set a timeline for the launch of this product, though it is keen that insurers should expedite their efforts on creating the necessary infrastructure and roll out the product at the earliest. It is not impressed with the current pace at which insurers are working towards formalising the launch, people familiar with the developments told Moneycontrol.

What is the target group for this product?

It is primarily aimed at India's rural population. The product is meant to enhance their access to adequate coverage against the key risks that all individuals face – death, sickness, accident and damage to property. It will ensure wider reach and deeper insurance penetration in the areas that need it the most.