Insurance from banks? Not right choice

If you are planning to buy an insurance product, do not blindly trust what the bank employees and insurance agents advise. They do not know about the insurance product in depth. Bank employees sell financial products on bancassurance because they have signed an agreement with the insurance companies. They don’t recommend these products to meet the needs and convenience of the customers but only to meet their targets. It is not that the products sold through bancassurance are bad. Just like a medicine is not effective on every patient, not all financial products are useful for everyone.

Insurance industry regulator IRDA is taking new measures to improve this sector. Insurance companies are being given relaxation in norms related to launch of new products. Insurance policies are being sold through new channels.

Through the new measures, IRDA aims to double the level of insurance penetration in the next five years. Insurance penetration in the country was 4.2 percent in 2020-21. Penetration level of life insurance products was 3.2 per cent. While that of non-life insurance products was only 1 per cent. Insurance penetration means the contribution of insurance premiums to the total GDP of the country. In order to increase the scope of insurance in the country, IRDA took a big step and allowed commercial banks to sell insurance policies. Banks are selling products of nine life insurance companies and nine general and health insurance companies. These products are being sold with bancassurance.

If you are buying a product on Bancassurance, then you need to understand very well that it is not easy to buy and sell such insurance products. They are not selling consumer products. You cannot switch your policy every year. Before buying an insurance product, do your homework.  make sure that the policy you are buying is useful for you in every way.

Jitendra Solanki, a certified financial planner, says that bank employees and insurance agents who sell products on  bancassurance do not know in depth  about such  products. Never rush to buy an insurance policy. Do not buy any policy even on the suggestion of another person. Go to the website or branch of that company and check out its features. It would be better to choose the option of comparing more than one policy.

Health insurance products are being sold on a large scale on banc assurance. Such policies are sold  as group insurance policies. Therefore, this cover is available at about half the price of that sold by individual companies. But if you are admitted to the hospital, there will be no help from the bank. You will have to yourself file your claim. So, it is very important to know what services the insurance company will provide  after you have bought the policy.

Actually, insurance is not just that you buy a policy and forget about it. After you have bought the policy. You should stay in touch with the insurance company so that your questions can be answered. You should go to the company’s website and understand the terms, conditions and grievance resolution process. Do not blindly trust the insurance agent or bank employee. Assess policies according to your needs. Take a final decision only after doing all the homework.