The daily routine of two neighbors watering plants leads to an interesting conversation.
Sindu: Each plant is unique and has its own requirements in terms of sunlight, water and nutrients.
Bindu: Yes. There is no standard procedure to follow when it comes to plant care.
Sindu: I agree. I think that’s why gardening is an art. But on other issues, standardization may work for the better, like insurance.
Bindu: Yes, you’re right. It is so difficult to understand each insurance product and its characteristics, what it covers, what it does not cover and, finally, making a choice.
Sindu: That is true. In recent months, the insurance regulator IRDAI has introduced guidelines for standard insurance policies to be launched by insurers. These products will help you overcome the challenge you just mentioned.
Bindu: By standard policies you refer to those in which coverage is the same between insurers, right?
Sindu: Yes. They are equal not only in terms of coverage, but also in other resources, including passengers, policy distribution methods and policy names.
Bindu: OK. What are the standard products we have?
Sindu: So far, the regulator has introduced Arogya Sanjeevani (standard health policy), Saral Jeevan Bima (standard term insurance), Saral Pension (annuity product) and other products, such as personal accident coverage and home insurance. IRDAI even established guidelines for Covid-19’s standard policies Corona Kavach and Corona Rakshak. Standard cyber insurance coverage is also likely to be launched.
Bindu: OK. If they are the same features and coverage across all insurers, it doesn’t matter which insurer we choose, does it?
Sindu: Maybe not! Although IRDAI has established guidelines for coverage and resources, the premium to be charged for the policy is at the discretion of the insurer. Therefore, you can select an insurer based on the premium charged.
Bindu: Oh! I did not know that the premium could be different with each insurer.
Sindu: There is a big difference in the premium between insurers for the same policy. This may be due to the difference in factors such as the integration process, medical check-up, chain hospitals and claims settlement processes followed by each insurer.
Bindu: But, so to speak, these standard policies are useful for those who have no basic policy and for those who have no clue about insurance or selection policies.
Sindu: This is so true. Basic insurance is better than nothing.