The product 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.
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The Insurance Regulatory and Development Authority of India (Irdai) unveiled its groundbreaking initiative, Bima Vistaar, a holistic and affordable insurance product tailored for the rural communities of India. Priced at a modest Rs 1,500 per policy. Bima Vistaar provides affordable and holistic insurance coverage, ensuring that rural populations have access to essential financial protection. This groundbreaking move by Irdai demonstrates a commitment to addressing the insurance needs of India’s underserved communities, promoting financial inclusion and security.
Bima Vistaar premium details
The product 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 pegged at Rs 2 lakh each, while the health cover, referred to as hospi cash, offers a sum assured of Rs 500 for 10 days, with a maximum claim of Rs 5,000 without the hassle of producing bills.
Moreover, to encourage wider adoption and distribution, agents selling Bima Vistaar policies are entitled to a 10% commission.
This strategy aims to promote the accessibility and popularity of the product among the target demographic, fostering financial inclusion and security in rural India.
Claim settlements
The claim settlement is proposed to be done differently for different segments. For the property part of the combo solution will be on a parametric basis, ensuring timely payouts based on the magnitude of the event.
The announcement of Bima Vistaar was made at a summit of insurance CEOs, led by IRDAI chairman Debasish Panda.
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, according to a Swiss Re Sigma report. This is much below the global insurance penetration of 6.8 per cent. In FY23, the insurance density in India increased from $91 in FY22 to $92.
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Since, Bima Vistar is intended to be a mass product for increasing insurance penetration in the country , 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. It is also necessary to find a reinsurance solution the product, said industry analysts.
