The updated terms and reforms in the insurance industry you need to be aware of 21st July 2022
Every industry undergoes some reform from time to time. This can be due to various reasons- changes in the country’s economic conditions, level of crisis, the impact of international and national markets, contribution to the nation’s GDP (Gross Domestic Product), budget regulations and much more. Several types of insurance act as investment plans, help you in a financially stress-free emergency, provide tax-saving benefits, and ensure a secure future for your loved ones and dependents.
Does the insurance sector undergo changes and reforms on a large scale too? The answer is yes. The premiums, terms and conditions, age limits, benefits, renewal, etc., are reviewed and revised when needed. This ensures that the insurance matches pace with the current economic conditions, the situation in the market and the demands of an existing and potential set of customers. And if you are someone who has purchased insurance policies or is planning to explore your options in the sector for all the good reasons, you need to stay updated with the changes.
This blog will discuss the revised terms and reforms you need to be aware of in the insurance industry. So, let’s get started!
The pandemic caught the eyes of the insurance sector reforms:
The covid-19 pandemic brought the entire world to a very unexpected halt. Given the pace of development and technological advancement, the pandemic situation across the globe was beyond the people’s and government’s imagination. While people were under lockdown, several opportunities opened up, and many sectors, mainly fintech, saw massive growth. In the insurance sector, which is majorly categorised into life, health and general insurance, the FDI (Foreign Direct Investment) limit is increased to 74 per cent from 49 per cent as per the new Insurance Amendment Bill 2021 passed in the Indian Parliament.
This was primarily focused on getting more foreign investments onboard. Why? The insurance sector is considered a good investment option. It is a capital concentration with a long development period. It takes at least seven to ten years to start making profits apart from their regular budget, retention and expenditure.
What does the FDI reform ensure:
The FDI reform discussed in the previous point will open up multiple avenues for investment in the insurance sector. This will significantly aid them in growth and expansion, even overseas. The whole loop continues and might attract more foreign interests, thus helping them flourish economically, eventually providing new features and insurance options for the customers such as
1. Pay-as-you-use motor insurance plan has now been ideated into the motor insurance framework. This would enable the customers and policyholders to reduce their premiums as per reduced coverage by availing of the switching on and off options.
2. Health insurance plans have been customised to comprehensively understand the needs of people during stressful times of covid. The comprehensive health insurance policies have incorporated mental health issues, covid-19 problems, modern procedures and treatments, etc.
Health insurance providers have been permitted to raise or reduce the health insurance policy premiums by almost fifteen per cent after three years. This is considered a significant reform in the health insurance sector and the pricing of these policies.
Some other reforms were accomplished regarding insurance awareness programs to ensure that people from the remote sectors of the country know the benefits of insurance policies and can avail a secure future, introduction of digitalisation of KYC and verification processes for the convenience of the existing and potential customers, 24*7 online help assistants, etc.
These were some updated terms and reforms you need to be aware of in the insurance industry. Insurance coverages help secure a financially stress-free situation when you encounter unprecedented circumstances that can endanger your health, assets or life. So, a wise option would be to explore all your options from the comfort of your home and buy insurance policy online that would cater to your needs in the best ways possible.
Click HERE to know more about how you can buy insurance policy online.
Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.