The
insurer’s main focus is on protection and not investment
Reliance Life insurance is ready to launch
four new products with innovative riders which will eventually increase the protection
of the policy holder. The company is
expecting IRDA clearance soon. The riders have been developed with inputs from
its strategic partner Nippon
Life, Japan’s largest life insurer.
The riders offered with the products are -
premium waiver benefit, family income benefit and term rider. The customers
have to pay extra premium to utilize the benefits of these riders. The insurer
expects that the add-on feature will increase the emphasis on protection.
The premium waiver benefit will be a
compulsory rider offered with money back plan. In a normal money back plan, if
a policy holder avails this product for 20 years, then he would regularly get
returns on 5th, 10th, 15th and 20th
year. At the end of the term, he would get the remaining money back plus bonus.
But if the policy holder takes money back plan
of Rs 1 Lakh with premium waiver benefit, then the sum assured becomes Rs 3
Lakh. The customer has to pay extra premium for enjoying this benefit. At the end of the term, the policy holder
will receive Rs 2 Lakh plus bonus and not Rs 1 Lakh plus bonus. In case of demise
or permanent disability of a policy holder, the policy continues for the
stipulated time even though the customer is unable to pay the premium. In such a
case, the premium is paid by the insurer on behalf of the policy holder. At the
end of the policy term, the customer would get the bonus plus sum assured.
In the family income benefit rider, in case of
unfavorable condition (demise or permanent disability) the family of the policy
holder will receive 1% of the sum assured every month till the end of the
policy term.
The term rider is mainly for piggy backing on original term policy. The main motive of the insurer is to emphasize on protection than investment. For the current year till August, the contribution of traditional products has been 72 percent. The insurer wants the contribution of traditional products to be between 50% and 70% every year.