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Online sale of term life insurance products gains traction: Max Life

According to a Max Life Insurance senior official, online sales are gaining traction in the life insurance industry. One out of every five-term contract is purchased directly by customers rather than through agents and advisers.

max life insurance

Max Life Insurance Deputy Managing Director V Viswanand claimed, “Indians purchased 12.5 percent of overall term plans by premium online last financial year. Although saving is still low at less than 1% of total premium via the channel.”

“It’s started to become a substantial channel for some organizations like ours… In FY21, Max Life’s market share was close to 30%. Currently, Max Life has a one-fifth market share in India’s online term purchases. While our offline market share is one-fifth of that,” he said.

Viswanand told PTI that the average age of policyholders purchasing policies online is 36 years old. And the company has implemented various unique programs for online consumers based on their feedback.

“We also pioneered a lot of financial auto underwriting, leveraging credit bureau partnerships.” As a result of our bureau partnerships, we don’t ask for any additional proof from 60% of our e-commerce consumers. Customers have experienced less friction as a result of this,” he said.

He also mentioned that the company offers premium vacations to consumers after a few years, with no questions asked, as well as specific leave choices.

How COVID-19 has affected the Life insurance industry!

According to him, the advent of the COVID-19 pandemic has resulted in increased insurance awareness and the deployment of technology has accelerated at this time.

covid affected life insurances

“In the first wave, we witnessed elderly people being admitted to hospitals and deaths occurring, but in the second wave, we saw that there was no age prejudice. It had no prejudice against co-morbidity. Mortality was common, and I believe individuals realized that they are not infallible when it comes to their own lives. “Just because you’re healthy now doesn’t mean you’ll be healthy tomorrow,” he explained.

The epidemic has raised public awareness, as seen by the large increase in sales of pure protection plans following COVID-19.

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Life insurance: Upward trend in premium growth of private players

Individual annualized premium equivalent (APE) growth has been gradually improving over the last few months; with August 2021 up 39% y-o-y, July 2021 up 31% y-o-y, and June 2021 up 16% y-o-y. All this growth comes from a low base of 6% y-o-y decline in August 2020 and a 7% y-o-y decline in each of July 2020 and June 2020.

As a result, high growth is supported by a low base and improved month-over-month (m-o-m) trends. Individual APE CAGR grew to 14 percent in August 2021 from 10% in July 2021 and 4% in June 2021; reflecting better month-over-month trends. Unit-linked insurance plans (Ulips) are reviving, thanks to buoyant capital markets, and non-par savin continues to gain traction.

As the base impact fades, y-o-y growth is expected to slow slightly. However high demand for certain products is expected to keep premium growth strong in the coming months. As a result, overall growth trends are still positive. For private players, Group APE was down 1% year over year in August 2021.

Life insurers' performance

In August 2021, the overall individual APE of LIC fell 5% y-o-y (down 4 percent y-o-y in July 2021 and up 1 percent y-o-y in June 2021). However, the base is higher than that of private players. Individual APE CAGR over two years was -2 percent, compared to 14 percent for private counterparts. However, despite a strong 18 percent y-o-y increase in group APE, overall APE grew only 2% y-o-y.

premium growth

Despite its large base, HDFC Life stands up admirably. It reported a 17 percent year-over-year increase in overall APE. Helm by a robust 27 percent year-over-year increase in individual APE, despite a 32 percent year-over-year decrease in group APE. Individual APE CAGR over two years was 20%, which was higher than the average of private peers’ CAGR of 14%. The sharp drop in group APE is most likely due to a conservative approach to the group term business.

The recovery of ICICI Prudential Life is on pace, with a 36 percent year-on-year increase in overall APE. Helm by 34 percent year-on-year rise in individual APE and 59 percent year-on-year growth in group APE. Due to lower volumes in FY2021, the two-year individual APE CAGR was -2 percent (-10 percent to -11 percent y-o-y decline over the past two months and 15 percent decline in Q1FY22).

Max Life reported a moderate 9% year-over-year increase in individual APE; 10 percent two-year individual growth for August 2021 and 6% for July 2021 is lower than the private peer average of 14 percent and 10%, respectively. Even though Max Life has excelled in the sector in terms of growth since the outbreak began, it appears to have slowed in the last three months. For more such updates, keep watching this space!

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Life Insurance: Lock in annuity rate with Saral Pension

In response to the insurance regulator’s guidelines, life insurance companies are releasing Saral Pension. It is a standard immediate annuity plan that offers the same terms and conditions across all life insurance industries.

Individual instant annuity plans with a single premium, non-linked, non-participating component give lifelong guaranteed rates at the time of purchase, making it easier for consumers to make an informed decision. As a result of the basic features and consistent terms and conditions. It is likely to see a reduction in mis-selling of life insurance products.

saral pension yojna life insurance
life insurance

Annuity programs ensure a pleasant lifestyle for their users, even after their retirement. After receiving a lump sum payment, a policyholder can select between two types of annuities: a life annuity that pays out 100% of the purchase price or a joint life last survivor annuity that pays out 100% of the purchase price on the death of the last survivor.

For individuals who desire to extend the benefit to their spouse, the combined life option is ideal. The lifetime guarantee on the annuity payable, regardless of future interest rate fluctuations, makes the program extremely appealing. The policy’s minimum and maximum admission ages are 40 and 80 years, respectively.

Safeguard against volatility

Policyholders have the option of receiving guaranteed income on a yearly, half-yearly, quarterly, or monthly basis. In the event of financial trouble, it provides a loan to the policyholder after six months of purchase.

There is an option to surrender the policy at any time after six months. In case the annuitant, or the spouse, or any of the annuitant’s children is diagnosed with one of the specified critical illnesses. . After deducting the outstanding loan amount and any loan interest, the annuitant will get 95% of the purchase price upon surrender. The policy will be canceled once the surrender value is paid.

A policyholder can borrow money against their policy. As long as the maximum loan amount does not exceed 50% of the yearly annuity amount payable under the policy. The annuity amount payable under the insurance will cover the loan interest. It will accrue according to the frequency of annuity payments under the policy. The policy’s claim proceeds will aid the repayment of outstanding debt. The annuitant, on the other hand, has the option of repaying the loan principal at any moment during the term of the annuity payments. For more such updates, keep watching this space!