Mumbai: The Insurance Regulatory and Development Authority (IRDA) has asked life insurance firms to make the more affordable ''term'' policies popular. Mr C.S. Rao, Chairman, IRDA, told insurers to offer more than just investment-oriented products. Term policies offer pure life cover at a very low premium as compared to investment products. Insurers have so far been pushing either endowment products or unit-linked insurance plans and marketing the tax saving aspect of these products.
Unit-linked insurance plans and endowment plans currently account for the bulk of the policies sold today. In the case of a term policy, the premium is low and the sum assured is payable only on the death of the insured. Endowment policies carry a higher premium and offer the sum assured and accrued bonuses after the stipulated period of the policy or death of the insured, whichever is first. A senior official at a private life insurance company said that customers often think buying a term policy is a waste of money.
Unit-linked insurance plans and endowment plans currently account for the bulk of the policies sold today. In the case of a term policy, the premium is low and the sum assured is payable only on the death of the insured. Endowment policies carry a higher premium and offer the sum assured and accrued bonuses after the stipulated period of the policy or death of the insured, whichever is first. A senior official at a private life insurance company said that customers often think buying a term policy is a waste of money.
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