New guidelines have made Ulips customer friendly

The new guidelines have made Ulips a very customer-friendly investment tool. Some of the notable features are enhanced minimum sum assured,an increased lock-in period of five years and capping of surrender charges which are extremely beneficial to policyholders. In addition to these,the capping of expense guidelines has brought down the cost of Ulips for the customer,even if he holds the policy for a period of 5-7 years. Besides,Ulips have the advantage of compulsory life cover. These guidelines are applicable only to customers who have purchased Ulips on or after September1 this year and will not affect other customers in any way.

As mortality charges for those over 55 years have now turned quite high,will the popularity of Ulips among older people come down? What should they do now?

It is a fact that mortality value is based on the age attained by the policyholder. However,mortality charge is based on the ‘sum at risk’,which is the sum assured minus the fund value at that time. This should not impact the popularity of the product,but will only make Ulips attractive as it provides a life cover for a longer duration of time,especially at an age when it is most required.

How will raising the lock-in period of Ulips to five years reduce mis-selling?

Ulips are essentially long-term vehicles for life cover and investment and induces forced saving. Hence,it becomes attractive to investors looking at building a long-term corpus. The increased lock-in period will,in a way,reduce mis-selling as investors will continue to be more focused on protection and invest for longer periods. This increase in the lock-in period will also help improve retention ratios since age9nts’ commissions will be dependent on customer loyalty. This would motivate the agents to encourage their customers to consistently renew their policies and keep them in force.

How should the distribution network be sensitised in order to sell the right product to the right customer?

It is important to sensitise distributors to sell insurance according to the customer’s financial goals and position. We train our intermediaries to first identify the needs of the customer. For this,we have created financial assessment and planning tools that help us understand the savings and investment objectives of the customer. This will help the intermediary to suggest an appropriate solution.

Consumers seem to be dissatisfied with health insurance services after some hospitals stopped the cashless facility. What should have been done to avert such a standoff and how will the matter be resolved now?

Bajaj Allianz continues to offer cashless facilities in its network of over 2,500 hospitals across the country. We deal with hospitals directly through our in-house Health Administration Team,thereby eliminating TPAs and related customer issues from the process.