1THE CHANGEOnline sale of life insurance. It has removed the intermediary between the firm and the policyholder. Aegon Religare Life Insurance launched it in 2009.
THE INTENTThe online sale of insurance was introduced to avoid the intermediary and bring down the cost for the customer. The iTerm, the first policy sold online, ended up cutting down its premium by about 16%. It is also easier for the customer owing to the simplicity of the policy's online interface.
THE IMPACTEver got a call from an insurance agent who wanted to sell you a term plan? It's ironical, but not surprising, that term insurance policies are rarely recommended. Ironical, because a term plan is considered the best type of life insurance by experts, and not surprising, because selling one is professional hara-kiri for an agent. Why would a customer give him more business if one policy fulfils all his insurance needs?
Grievance Redressal
Irda is in the process of developing an integrated grievance management system (IGMS), which will allow policyholders to register and track their grievances online. |
The best thing about a term plan is the low cost of cover. A 30-year-old can buy a cover of Rs 30 lakh for 25 years for about Rs 6,817 a year.
If you factor in the tax savings, the per day cost comes to less than the price of a soft drink. Can anyone offer you insurance cover cheaper than that?
In November 2009, Aegon Religare Life Insurance answered in the affirmative with the launch of its iTerm plan. The online offering cuts out the intermediary between the company and the policyholder, thus bringing down the cost. As it is, the premium charged by Aegon Religare for its regular term plan is the lowest in the industry. The premium of the iTerm plan, which is only sold online, is a good 16% lower than that.
This is not the only benefit. The iTerm interface is so simple that, if Irda permitted it, even a pre-teen would be able to buy an insurance policy. In three easy steps, one can know how much insurance one needs and what it will cost him.
"Our objective is to offer a simple product. You can buy an iTerm policy in the same time you take to book a train ticket online."
RAJIV JAMKHEDKAR
Chief Executive Officer, Aegon Religare Life Insurance |
The move has paid off handsomely. In less than a year, Aegon Religare has issued over 10,000 iTerm policies with an average sum assured of Rs 65 lakh and an average tenure of 20 years.
The combined cover adds up to a mindboggling Rs 6,500 crore.
This runaway success has prompted other insurers to take the online route. ICICI Prudential Life Insurance launched its iProtect policy in August 2010.
Metlife India Insurance launched Met Protect last month. Both are cheaper than the regular term plans from these companies.
This is just the beginning. In the coming months, more insurers may talk to the customer directly.
