Multiple policies for basic cover affecting insurance spread: Irda chief

HYDERABAD: A single comprehensive policy covering basic insurance requirements like life and health will help penetration of insurance products as multiple policies for various covers are cumbersome, Irda chief T S Vijayan said today.

"Currently we observe that a typical general insurance product covers specific risks of fire, health. Similarly, natural death is covered separately by life insurers.

"This approach leaves no option but to take multiple policies to obtain basic cover which is very cumbersome and thus appears to be one of the major roadblocks in increasing the insurance penetration," Vijayan said during his address at the 7th Global Insurance Summit organised by Assocham.

"It would be more effective to have single policy, with options for customisation, which covers all basic insurance needs," he said.

He also said that lack of awareness is one of the prime reasons for poor performance of micro insurance products.

Vijayan said though Irda has allowed a tie-up of life and non-life insurers to offer micro insurance products, there has been no significant progress in that area.

On micro-insurance products Vijayan said, "During the last financial year, life insurance companies issued more than 5 million individual micro-insurance products and covered more nearly 14 million people".