Life Insurance policies have been part of Indian households for decades, with families opting for them since generations to secure the future of their families. However, as per a survey conducted by the Life Insurance Council, while the awareness for the need of a life insurance policy is at 91 percent, the actual number of people who own one is lower at 60 percent.
The factors responsible for such a low inclined graph include high premium, high tax rates, and lower adoption of technology, among others. But the landscape of this market completely changed in 2020 with the COVID-19 pandemic, as not only did it induce a massive digital transformation and technology-adoption among businesses as well as consumers, but also forced every individual to take a relook at essentials such as life insurance seriously.
Another key element that played an important role in people’s lives was the ability to spend. The COVID-19 pandemic forced consumers to rethink their financial preparedness. Therefore, while spending has reduced on non-discretionary items, saving for a family’s financial future became a key focus area amidst the crisis. Financial immunity meant having a life insurance cover, which was not a focus area earlier.
Let’s look at the key things you must remember before you purchase a life insurance policy:
Track record of insurer
Most of the time, consumers miss out on this important aspect while making their choice. Some common pitfalls that expose a lack of track record of an insurance company include delayed processing of claims and bad customer service, among others. When comparing various insurance companies and their policies, it is important to conduct a thorough research on the insurer’s reputation. Just like any investment, the track record for every insurance company is available online and it is the responsibility of the consumers to make sure that the company that they go ahead with has a clear record with no complaints regarding claims, etc.
Strength of the company
Understanding the basic standing of any insurance company is important to make sure you are not making a wrong choice.
According to the survey conducted by the Life Insurance Council, some of the key barriers to people investing in insurance are mistrust and unethical practices used for sales. Information on the company’s profile and standing is available on various websites online. Making an informed choice by reading online reviews and also taking feedback from friends and relatives can help as well.
Service capability of the company
According to a study by Global Journals, service quality is divided into two parts -- technical quality (what is given), and functional quality (how is it given).
The service quality, both technical and functional, which looks at how compressive the insurance is and how it addresses one’s needs, further extends to how seamless the process of buying an insurance is in the modern era.
Both these services of the insurance provider determine the satisfaction a customer receives from the process, thus maintaining high numbers. Customer retention is as equally important as acquisition, if not more.
Service capability includes explaining important steps in the claim process, providing the right policy for the consumer, giving out maximum information possible to assist the consumer, etc. As a consumer, it is crucial to evaluate these parameters to make an informed and unbiased decision.
Has your insurance company adopted technology?
Earlier, technology was close to non-existent in the life insurance sector with insurance policies being on paper, payments being made only through in-person kiosks and agents sitting face- to-face and explaining the policy to the consumers.
In the modern terms, insure-tech has gained great popularity and is becoming a crucial part of the industry. Artificial intelligence (AI) provides the much-needed personalisation that the modern buyers are looking for. Consumers need to be aware of the available technologies in the market and choose the company best equipped with these to ensure top-notch customer service at any hour.
Consumer focusAn insurance company understands that a consumer seeks coverage out of necessity more than desire. This needs to be the foundation for a healthy and long insurer-customer relationship.
Therefore, it is of utmost importance that the customer is now able to differentiate between his/her real needs from the various offers by the insurance companies. This means, a consumer will need to select an insurance policy that best meets his/her necessity.
So, consumers need to be provided better communication to make them feel secure with the policy purchase.The author is Secretary General, Life Insurance Council