After the outbreak of COVID-19 pandemic, there has been a general perception that in the times ahead, the need to buy life insurance will go up. “Never before life insurance was seen with this importance as it is seen and valued today under the given circumstances. People are now more concerned and looking forward to buying a life insurance policy. Investors have started understanding the significance of Term Life plan as it is a guaranteed way of providing financial protection to your loved ones in case of an untimely eventuality,” says Rakesh Goyal, Director, Probus Insurance, Insurtech Broking Company.
Buying insurance online, offline
While more and more people may look forward to buying life insurance policies, the need to maintain social distancing norms may still be in place. So, will people prefer buying life cover through a digital medium or will they still stick to face-to-face interaction with life insurance agency people before buying? “All insurance companies and other entities in the insurance space have now shifted the entire process online, including even those operations which were earlier carried out offline. Whether providing a product quotation, product information, or pre-sales advisory support, all are done through a chatbot. The process of filling the proposal form to policy issuance and providing a soft copy, everything is now online, which is now easier and customer-friendly,” says Goyal.
For those who still have to visit the offices of insurance companies, the insurers are gearing up with the necessary infrastructure to service their policyholders in the present environment. “With restrictions being eased in Green and Orange zones, potential customers can now purchase life insurance from our offices. We have committed to a phase-wise opening of offices while complying with the guidelines issued by the Ministry of Home Affairs (MHA). We have also taken various precautions to ensure that the general health and well-being of our employees is monitored closely. Social distancing is being practised without any exceptions across all our offices,” says Manu Lavanya, Director & Chief Operations Officer, Max Life.
An important part of the policy issuance process is the medical underwriting. Depending on the age of the buyer and the sum assured opted for, medical underwriting is required before the policy is issued. “Most of the insurance companies have revised their medical guidelines according to the current scenario. Insurance companies are maximising the percentage of policy issuance with Tele-Medical but at the same time, they are also not letting the overall scrutiny from being affected. Furthermore, when it comes to cases where physical medical is mandatory, insurance companies are in regular touch with customers for the same,” informs Goyal.
Sometimes, a buyer is required to visit a medical centre or a hospital and undergo physical activity such as treadmill tests, ECG etc and give a blood sample. “Physical medical tests are now being conducted in Green and Orange zones where we have reopened offices. Alternatively, we have also installed a TeleMER protocol for policy issuance which ensures remote medical underwriting for new customers buying policies during this time. This is a telemedical verification process wherein questions regarding prior health conditions and illnesses are asked to customers by certified doctors. In addition to convenience, tele-medical also ensures customers do not have to visit diagnostic centers during such challenging times,” says Lavanya.
Some insurers depend on third-party data as well. “AEGON Life has been open to alternative methods of Underwriting which involve data-driven approach & leveraging on 3rd party data like a credit bureau, Industry database, etc.,” says Satishwar Balakrishnan, CFO, and Principal Officer, Aegon Life Insurance.
Another importation part of the life insurance buying process is the completion of KYC norms. “The e-KYC is an initiative to make the process of buying policy quicker and easier by doing the KYC process online without the need of physically meeting the customer. The IRDAI has now allowed 29 insurance companies to adapt this process to meet the KYC requirements. The process has replaced a bunch of documents such as address proof, photograph and identity proof with just Aadhaar. For a situation like now, wherein the customer cannot step out of the house and people are adapting online services owing to lockdown and social distancing, this is useful and helpful for customers when it comes to buying an insurance policy,” informs Goyal.
What to do
One should not wait for a pandemic situation to remind that life insurance is necessary for anyone who has financial dependents. Most financial planners suggest keeping a life cover of at least ten times of net annual take-home income also taking long term goals into the calculation. A term insurance plan that comes with a low premium and high cover fits the bill for those who wish to buy life insurance. “AEGON Life was one of the first companies to launch Term insurance on a large scale. Using our expertise and experience in the Term insurance category, we were able to achieve no change in pricing and increased our penetration in the industry,” informs Balakrishnan.