Why ULIP mis-selling has become rampant ?

To increase the penetration of insurance in India, Insurance Regulatory and Development Authority (Irdai) had directed insurers to launch uniform insurance products. While insurance is need of the hour, people hesitate from signing up for it. The technicalities associated with the terms and conditions of different insurers make it difficult for a common man to comprehend the benefits and zero down to one plan. Taking note of the prevailing scenario, Irdai directed insurance companies to come out with a standardized product. Here’s a list of 5 such policies:

Saraj Jeevan Bima Yojana: This is a pure term plan and comes without any maturity benefit. Anyone aged between 18 years and 65 years can sign up for it for a sum assured between Rs 5 lakhs and Rs 25 lakhs.

Arogya Sanjeevani: This is a standard health insurance plan and covers healthcare expenses from Rs 1 lakh to up to Rs 5 lakhs. The coverage includes ambulance cost, room rent, hospitalization expenses and ICU services among others. Besides all new-age treatments like stem cell, robotic surgery, and cataract are also covered. The premium starts from Rs 3,500 per month and can go up to Rs 10,000. The policy also has a 5% co-pay option, where the policyholder will pay just 5% of the expenses.

Policies that will be rolled out from April 1, 2021:

Standard travel insurance policy: The Irdai has directed insurance companies to launch a standard travel insurance policy for both domestic and overseas travelers, where subscribers will be charged a flat premium. The subscriber can choose to cover either travel or both travel and stay. The option to buy an individual plan or family floater will also be made available. Missed flight, baggage loss, hospitalization during domestic travel among others will also be covered.

Saral Suraksha Yojana: This is a standardized personal accident cover, which will be available with all insurance companies from April 1. The policy will offer a sum assured between Rs 2.5 lakh and Rs 1 crore. In case of permanent disability, the subscriber will be entitled to the entire sum assured. Besides, hospitalization expenses and kids’ education will also be covered in the policy.

Saral Pension Yojana: This is a standard, single premium pension plan i.e. the subscriber will have to pay the entire premium at the time of buying the policy and he will receive a fixed lifetime pension. The subscriber can choose from monthly, quarterly, and half-yearly options. The plan comes with two options–life annuity and joint-life annuity. The life annuity option offers 100% return of purchase price to the insured. This option will have only one annuitant and after his death, the base premium will be given to the nominee. The joint-life annuity option will have two annuitants and in case of death of the primary annuitant, the secondary annuitant will continue receiving the pension. After the death of the secondary annuitant, the nominee receives the base price of the plan.