If I was An IRDA Chairman:

In the childhood,all of us may have written an eassy “If I was A prime Minister Of India….”.What we can write the ideal things that I could have done.Today,I have tried another eassy,not about prime minister but IRDA Chairman.IRDA (Insurance Regulatory Development Authority Of India) regulates the functioning of insurance companies in India.This is not critics but the address of common grivance faced by common policy holders.

1.If I was an IRDA chairman,I will ask general insurance companies to offer insurance on fixed deposits.Currently there is limited insurance of Rs.1 Lakh per bank combining all accounts.Its really impractical to keep money at number of banks to get the insurance.RBI is not doing anything about to enhance the limit,at least depositors might have done something to safeguard their money.I think people will not take term insurance but do something to protect their money in banks.

2.I think free look period of 15 days is very less.It should be at least 90 days so that I can comfortably open the document,read/understand and return to company.If there is a waiting period of 90 days then why not free look period also.

3.I will ban banks from selling insurance.If I went bank to ask for any tax saving product then bank peoples will first keep insurance form before me rather than available tax saver fixed deposits with them.They are really misusing the database they have.They are themselves moving money away from the banks and shouting about cash crunch.

4.About ULIPs,I will ask insurance companies to offer different incentives for insurance component and investment component.Commission received for investment component should be as competitive as with mutual fund agents while for insurance component they should receive commisson similar to term insurance.It will make ULIPs more competitive and cost effective and offer something to its investors on maturity.As advisor will receive commission only when policy holder pays premium each time ,advisor will try that policy holder will remain active for longer term.

5.Aim of pension plans should be to cover the risk of long living only.There should not be any space for insurance component in this product.I would have made it pure investment or saving product.

6.About term insurance,I would have appoint the commitee of different actuaries and decide a fixed premium for different sum assured and make  same rates applicable  for all companies.For same sum assured one company is charging Rs.15,000 while other is charging Rs.6000/-..doesn’t it look annoying?

7.I would have scrap the system of indicative yield of 6 & 10%.These indicative returns are being shown as real returns and investors are being  fooled.

As already stated,this post is an attempt to address the problems of common policy holders.You wish to add anything kindly add below in comment section.