Why in news?

The Insurance Regulatory and Development Authority of India (IRDAI) has proposed to price Bima Vistaar at Rs 1,500 per policy. Bima Vistaar is an ambitious all-in-one affordable mass product aimed at the rural areas of the country.

What’s in today’s article?

• Insurance penetration in India
• Bima Vistaar

Insurance penetration in India - Statistics

• In the financial year 2022-23 (FY23), India’s overall insurance penetration was down at 4 per cent from the level of 4.2 per cent in FY22.
  • This is much below the global insurance penetration of 6.8 per cent.
• As per IRDAI, the insurance density increased from $78 in 2020-21 to $91 in 2021-22.In FY23, it increased to $92.
  • Insurance density is a key measure of a country's insurance sector development.
  • It is calculated by dividing the total insurance premium by the total population of a country.

Bima Vistaar

• Background
  • To further boost the growth towards achieving the objective of insurance for all, IRDAI has been working on the concept of Bima Trinity.
    • Bima Trinity is the result of the initiative by IRDAI in late 2022 in setting up a committee to explore and recommend on how to bring about synergies in the working and operations of insurance companies.
  • Bima Trinity initiative consists of 3 programs: Bima Sugam, Bima Vistaar, and Bima Vahak.
    • Bima Sugam -An online marketplace that allows customers to compare and purchase policies, settle claims, and renew policies.
    • Bima Vahak -A women-centric workforce operating at the Gram Sabha level to educate and convince women about the benefits of comprehensive insurance, particularly Bima Vistaar.
• About Bima Vistaar
• It is a bundled policy that covers life, health, property, and accidents.
• It provides defined benefits for each risk category, ensuring quick claim payouts without surveyors.
• As a social safety net product, Bima Vistaar targets the untapped geographies.
• Features of Bima Vistaar
  • The product Bima Vistaar includes:
    • life cover with a premium of Rs 820,
    • health cover at Rs 500,
    • personal accident cover at Rs 100 and
    • property cover at Rs 80.
  • If taken for the entire family on a floater basis, the policy will cost Rs 2,420, with an additional Rs 900 charged for the rest of the family members.
  • The sum assured for life, personal accident and property covers is Rs 2 lakh each.
  • The health cover, known as hospi cash, offers a sum assured of Rs 500 for 10 days, with a maximum amount of Rs 5,000 available without producing bills or documents.
• Significance
  • Bima Vistaar policy underscores its importance in safeguarding individuals and families against various risks and uncertainties.
  • This initiative not only encourages more people to invest in insurance for their protection but also promotes financial inclusion.
  • The competitive & reasonable pricing of Bima Vistaar is expected to benefit many individuals and families.

Conclusion

By leveraging the expertise and reach of intermediaries, such as brokers, agents, and insurance advisors, Bima Vistaar has potential to reach and serve the diverse needs of Indian population. It is expected that unlike micro insurance products, it will generate a large sales volume.  Now that the premium has been decided, it will be possible to do a cost benefit analysis of the product for its long-term sustainability.