Insurance penetration in India decreased to 4% in FY-23 compared to 4.2% in FY-22, whereas the global insurance penetration stood at 6.8%. On the other hand, the insurance density, measured as the ratio of premiums collected to the total population, increased from $91 in FY22 to $92 in FY23. This could be attributed to various factors such as Covid-19, which created huge awareness among the general public, but now it seems that the fear among the public has been reduced to a certain extent as the World has returned to normal and people are delaying their insurance purchase. Other factors may include exorbitant premiums, employer-sponsored health insurance schemes, and government-sponsored schemes.
To improve insurance penetration in India, the Insurance Regulator and Development Authority of India (IRDAI) has introduced Bima Vistaar. This all-in-one insurance product is aimed at mass customers, mainly those residing in rural and semi-urban areas. It combines life, health, personal accident, and property insurance. IRDAI aims to provide a basic safety net with Bima Vistaar and, at the same time, increase insurance penetration in India.
What’s on this page?
Here is an Overview of the Product- Bima Vistaar:
| Item | Life | Health | Personal Accident | Property |
| Coverage/ Sum Insured | Rs. 2 Lakhs | Rs. 5000 | Rs. 2 Lakhs | Rs. 2 Lakhs |
| Covers | Death | Hospital Cash | Disability | Damage/Loss to the property |
| Available as | Single Payment | Rs. 500 for 10 days | Single Payment | Single Payment |
| Individual Premium | Rs. 820 | Rs. 500 | Rs. 100 | Rs. 80 |
| Overall Per Person Premium | Rs. 1500/- | Rs. 1500/- | Rs. 1500/- | Rs. 1500/- |
| Family Floater Premium | Rs. 2420/- | Rs. 2420/- | Rs. 2420/- | Rs. 2420/- |
| Claims Bills | Necessary | Not required | Necessary | Necessary |
| Agent Commission for selling Bima Vistaar | 10% | 10% | 10% | 10% |
| Distribution by | Bima Vahak | Bima Vahak | Bima Vahak | Bima Vahak |
| Availability in Online portal | Bima Sugam | Bima Sugam | Bima Sugam | Bima Sugam |
Claim Settlement in Bima Vistaar
India’s insurance regulatory and development authority is also addressing one of the main issues in the insurance purchase process- claim settlement. Insurance claim settlement is a cumbersome process for even an educated individual who can understand it. Since the product is aimed at mass people and mainly focuses on rural and semi-urban areas, making the claim settlement process hassle-free is important. For this purpose, Bima Vistaar would be settled on a parametric basis instead of a non-parametric basis.
- On a parametric basis, the claim payout is based on the magnitude of the event rather than the magnitude of the losses. This means that if the magnitude of an event is higher, the entire claim amount would be settled without considering the actual loss incurred by the insured customer.
- In Bima Vaahak, with a 25% magnitude of damage, 50% of the sum insured would be paid automatically. With more than 40% of the damage, a 100% sum insured or Rs.2 Lakhs would be paid to the policyholder.
- IRDAI, along with the Life Insurance Council and the General Insurance Council, is working to create a UPI-like moment for insurance in India to increase insurance penetration.
FAQs:
<strong>How much would the premium be charged if a family wants to take the Bima Vistaar policy?</strong>
A family floater Bima Vistar insurance policy would cost around Rs.2420, including Rs.2 Lakhs term, personal accident and property insurance, and Rs.5000 hospital cash medical insurance.
<strong>What are the returns in Bima Vistar?</strong>
Bima Vistar, launched by IRDAI, is a non-participating policy that includes life, health, personal accident, and property insurance. There would not be any maternity benefit under the policy, and the sum insured would be paid only if a claim is made.
<strong>What does the health insurance section contain in the Bima Vahak policy?</strong>
The health insurance section of a Bima Vahak policy consists of a hospital cash plan in which the policyholder would be paid Rs.500 per day for a maximum of 10 days if admitted to a hospital during the policy period. Hospital cash differs from health insurance sum insured in which the sum insured would be paid depending on the amount spent on hospitalization.
<strong>How to purchase a Bima Vistaar policy?</strong>
Bima Vistar policy would be sold initially by Bima Vahaks and then made available on online platforms, including Bima Sugam. IRDAI plans to have at least one Bima Vahak for every village who would go door to door to recommend the product.
<strong>What is the basis for claim settlement in Bima Vahak?</strong>
The claim settlement in Bima Vahak is based on the event’s magnitude rather than the loss’s magnitude. The higher the event’s magnitude, the higher the settlement amount. This would reduce insurers’ operational costs as they need not verify each claim and then settle it on an indemnity basis.
