Bundled Insurance Products find takers
Customers favour bundled insurance products, which involve selling of two or more products with a life insurance policy, say insurance companies. While insurance companies had not been pushing for such products, officials said customer demand had not come down.
"Though there have been some instances of products being mis-sold, customers still come to us to get information about these. The industry is not completely shutting out these products," said a senior private life insurance executive.
Some of these products include free insurance cover (for the first year that can later be renewed for the following years) with bank account; travel insurance with any travel package, motor insurance with purchase of vehicle; insurance cover with home loans or health and life insurance products bundled in a package.
In February 2012, Insurance Regulatory and Development Authority (IRDA), in a paper on tying and bundling, had said the marketing methodology might lead to client confusion regarding the role of the distributor vis-a-vis the insurer. The regulator had added bundling an insurance product with another particular product or service that was the primary business of the channel left the customer with no choice but to take the insurance product offered.
However, insurers said customer demand was still high for bundled products and services. The senior vice-president of sales and marketing of a private life insurance firm said since these products gave a customised offering to policyholders at an attractive rate, they preferred to take such packaged plans.
Insurance executives said as long as an option was given to a customer, there was no issue. A senior executive of a private general insurance company explained that there had been cases in which a customer was forced to buy an insurance policy, as a pre-condition, with any vehicle purchase or with other financial products and services.
"This amounts to misselling, since the customer either does not require the insurance or does not want to buy that of a particular insurer," the official added.
This article has been sourced from Business Standard.
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