Disadvantages Of Insurance

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Insurance is a complex product representing a promise to compensate the insured or third party according to specified terms and conditions in the event of an occurrence of a covered contingency. It is that time of the year when everyone is working with a single goal in mind – Tax planning. It is during this time when all are hard crunched for time and are seeking options to invest the required amount, and produce the receipt to HR in time to avail the tax benefits for the year. In doing so, a majority of us end up purchasing insurances that may or may not suit our requirements. It is important to first identify the need and invest in the right insurance product that caters to one’s requirement. Apart from risk coverage many seek investment…show more content…
While the new ‘traditional products’ regime has made the system more transparent, insurers are sceptical about prospective policyholders’ adaptability to the new norms. Hence, the largest insurer, LIC, is also ensuring that its business performance does not have any impact in the last quarter, which is usually the most productive quarter in terms of new premiums. Insurance is seen as a savings and protection tool by a majority of the insured households. The most important benefit of insurance, as perceived against other forms of savings, was its usefulness in an emergency. Increased competition, improved financial literacy and the digital world have collapsed the gap between the insurers and the buyers that existed until a few years ago. Many distributors fall short of convincing customers about the need for life insurance products, leading to low conversion ratios. Customer-centricity should reflect in the products at the design stage as well. At HDFC Life, we have taken steps in this direction and come up with specific products for young aspirants, urban women and wisdom investor segments. The principles of customer-centricity need to be embedded into the culture of the organisation. Insurers also need to work with partners to put in place more stringent risk management practices to avoid instances of mis-selling and unethical…show more content…
After liberalization, privatization and globalization, it has been duly realised by all the insurance players that customer satisfaction is the pivotal element for enhancing business performance. Life Insurance Corporation of India (LIC) still continues to be the dominant life insurer in the liberalized scenario of Indian insurance. With greater choice and awareness, there is continuous increase in the customers’ expectations and they demand better quality. First, the insurance business is built on a large set of complex internal processes. Most of these are available as digital, automated processes operating inside the insurer. Insurances therefore have an almost fully digital product. As a result of this, much of the insurance business data is available in digital form and therefore can be made available to other digital systems easily, including mobile

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