With an overall insurance penetration of just 3.76% (approx.) in the year 2020, the insurance sector in India is still largely untapped. The story is not very different in the case of term plans as well. However, this low penetration can also be viewed as a big opportunity for consistent growth for years to come.
The term plans, in particular, are becoming popular post-Covid-19 due to greater awareness about them and the easy affordability of premiums.
As the term plans poise themselves to witness significant growth in the upcoming times, they are likely to evolve in different ways to stay relevant for the current entrants to the working population.
Greater Stress on Digitalization
While insurance providers have been offering term plans for a while, the Covid-19 and the prolonged lockdown have helped the general population and industry veterans accelerate digitalization.
In a post-Covid-19 world, the traditional model of providing insurance and the associated services is likely to get obsolete with time. Therefore, evolving to a digital-only model is likely to be the way to move forward.
Furthermore, the young generation prefers a digital experience in every aspect of life. Therefore, it can be assumed that this dual thrust from the user and the service provider will transform the term insurance segment, with a bulk of the ecosystem moving online.
While a separate health insurance plan can cater to the medical emergencies of an individual, many people want their term plan to protect them against certain major illnesses.
Therefore, term plans are likely to witness a renewed interest in their critical illness rider benefits. While many reputed firms already offer critical insurance riders, all the firms might follow suit in future.
Greater Coverage Options
While insurance service providers strive to offer the best bargain in term plans to attract customers, they also require to provide wider coverage options. Good term plans already come with a wide range of coverage to choose from, such as
- Full Death Benefit
- Death Benefit with Sum Assured
- Premium Waiver Benefit
Term plans are likely to provide and improve such coverage options in future as well.
Term plans in 2021 and onwards are likely to be more flexible in providing life cover.
For example, some innovative term plans allow their customer to increase or decrease the life cover as and when desired, subject to some terms.
Such innovation and flexibility in a term plan are likely to continue, with some reputed firms being the torchbearer of positive change.
With more and more people opting for term plans, the insurance providers are likely to grow and fine-tune their operations through the continuous process of learning and evolution. The public is likely to be positively affected by this development in terms of getting more quality options while buying the desired plan.