Canara HSBC Oriental Bank of Commerce Life Insurance Company plans to launch a pure term insurance product, with return of premium, in April in the wake of the insurance regulator coming out with guidelines for the same.
The Gurugram (Haryana)-headquartered life insurer will shortly approach the Insurance Regulatory and Development Authority of India (IRDAI) to get approval for the product, said a top official.
IRDAI guidelines
Referring to IRDAI’s November 2016 guidelines on point of sale for life insurance products, Anuj Mathur, Chief Executive Officer, Canara HSBC OBC Life, said: “With term return of premium (ROP), if nothing has happened (no insured event — death — occurs during the policy tenure), whatever premium you have paid you will get it back.”
For example, for a 20-year term policy with a sum assured of ₹50,000, the annualised premium could be, say, ₹2,000. If the insured event does not occur, the policyholder will get back the premium paid (₹24,000) over the 20-year period.
“In this particular product, the upper limit for sum assured is ₹15 lakh. And (there is) no underwriting. You just walk into the branch and give your particulars to the branch manager. So, this product will be technology driven, with online submission of particulars, online (Aadhaar-based) authentication and across the counter policy issuance.
He added that no medical (test) is required because the company has that kind of risk appetite and the (policy) volumes will be big too.
“We are talking of big numbers. So, there the mortality also gets spread out. So, we are keeping it (policy) very simple, which will click with the common man in Canara Bank or in OBC. That is how we are targeting this product,” said Mathur.
Biz outlook
The companyis expecting to end FY17 with new business income of about ₹630 crore as against ₹445 crore in the previous year. It is targeting new business income of about ₹800 crore in FY18.
The CEO said gross written premium will touch ₹2,400 crore (new business plus renewals) in FY17 as against ₹1,850 crore last year.
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