If you are planning tax-savings through life insurance, you have fewer choices this year.
As a result of new product norms for life insurance companies which came into effect from January 1, the number of products available in the market is less than a quarter of what was available last year.
According to a senior official of the Insurance Regulatory and Development Authority (IRDA), the new products launched so far in the market are about 60, which may go up to 75 to 80 in the next two months.
Last year, there were 450-500 products. Generally, the last quarter of every year is good for insurance business as many people invest to get tax incentives.
IRDA, however, has done its part. It had cleared all the products (over 400) in line with the new norms other than those which were sent this month. It is for the insurers to plan and launch them, says the official.
According to Rituraj Bhattacharya, who heads the products division at Bajaj Allianz Life Insurance, the industry might take its own time to phase out the launches. “We also need to look into training the sales force and other market related aspects. The number of products available will increase over a period of time,” he said.
P Nandagopal, Chief Executive Officer, India First Life Insurance, also agrees that there are fewer tax-saving products. “However, the perception of insurance is also changing and not many might look for life insurance from the tax-savings perspective unlike earlier,” he says.
But the last-quarter always has a relation to income tax, argues M Vignesh, a senior agent with the Life Insurance Corporation. “Many customers who come into tax bracket and who start earning buy life insurance for only tax-saving. So, this quarter, they will have little choice unless new products are launched,’’ he adds.
Meanwhile, insurers are trying hard to push their products with catchy promos. A leading private insurer has put up a hoarding saying onion prices are changing so is the insurance. Bajaj Allianz Life will be launching a campaign called ‘Future Save’ shortly while the LIC is flooding news media with many advertisements!