0:01

You're listening to a Mint

0:03

podcast brought to you by

0:05

HD Smartcast. It's a pure

0:08

risk mitigation problem. It's

0:10

basically you take care or life

0:12

insurance or for that matter any

0:15

insurance is basically a risk mitigation

0:17

product which is supposed to take

0:19

care of any unforeseen event. If

0:22

something is supposed to happen, if

0:24

you are very well know that,

0:26

say, five years down the line,

0:28

this is going to happen, you

0:31

will start planning for it. You

0:33

have to add a lot more

0:35

customers. In fact, if the majority

0:38

of the population actually buys a

0:40

term plan, it can actually become

0:42

cheaper. Yeah, more people will come

0:44

obviously then. But currently the number

0:47

of people to actually buy a

0:49

term plan is still not very

0:51

high. In unit link, the fund

0:53

can also go down. In case

0:55

of a power, the guarantee component

0:57

might be a little lower, but

0:59

there is a possibility of an

1:01

upside. When we talk about life

1:04

insurance, then experts suggest buying

1:06

term life insurance policies, in

1:08

which if something happens to

1:10

a policy holder, then his

1:12

or her family members get

1:14

the life cover. Now, if

1:16

the policyholder survives the policy

1:18

period, then the policyholder and

1:20

the family, they get nothing.

1:22

This is the reason why

1:24

people prefer buying savings link

1:27

insurance policies like eulips or

1:29

endowment plans, in which if

1:31

a policyholder survives the policy

1:33

period, then they get some amount

1:35

as maturity. But making term life insurance

1:37

policies make better sense and there are

1:40

some life insurance companies which focus more

1:42

on their term insurance business over their

1:44

Europe or endowment. I have MDN CEO

1:47

of Bandon Life, Satishwur, his company Banda

1:49

Life is one such insurance company. Welcome

1:51

on the show today and today we'll

1:54

talk all about term life insurance policies.

1:56

So maybe let's begin with product mix

1:58

in your company when it comes to

2:00

term your lips and endowments Thanks for

2:03

the introduction first. So see two things

2:05

one is yes, we I actually look

2:07

at product mix more in terms of

2:10

number of policies, which basically means the

2:12

number of customers that you have on

2:14

board. A number of policies sold. So

2:17

number of customers that you are actually

2:19

on board, right? Because your term size,

2:21

ticket sizes are much smaller than the

2:24

savings component. So if I look at

2:26

on those basis, if I look at

2:28

my product mix, we are more than

2:31

50% actually term policies. All right, meaning

2:33

you are selling more term insurance policies

2:35

over your lips and end terms of

2:37

number of policies. did some major changes

2:40

to make that happen. But broadly, coming

2:42

back to your question, the product makes

2:44

more than 50% his term, say closely

2:47

around 55 odd percent, another 25% which

2:49

non-power savings and the balance is more

2:51

towards power and unit link. If you

2:54

can explain power and non-power because to

2:56

maybe audience they won't understand, participate. Let

2:58

me actually give you the entire concept

3:01

on life insurance itself, right? broadly you

3:03

can categorize life insurance products into two

3:05

buckets. One is the term plan or

3:08

which is the simplest form of life

3:10

insurance, which is the purest form of

3:12

life insurance, where you basically pay a

3:14

premium. And in case if there is

3:17

death of the policy holder, the dependence

3:19

of family holders or the nominees, they

3:21

actually get a lump sum. And normally

3:24

the multiple of the premium that you

3:26

pay. and the sum assured or the

3:28

life cover that you get against this

3:31

life insurance policy is say 400, 500

3:33

times of that premium. So it's a

3:35

pure risk mitigation product. It's basically you

3:38

take care or life insurance or for

3:40

that matter any insurance is basically a

3:42

risk mitigation product which is supposed to

3:45

take care of any unforeseen event. If

3:47

something is supposed to happen, if you're

3:49

very well know that, say five years

3:51

down the line, this is going to

3:54

happen. will start planning for it. You

3:56

don't get insurance for it. So this

3:58

insurance is a risk mitigation product. The

4:01

risk of me dying early. That's what

4:03

specifically the term life insurance product take

4:05

care of. Abroadly life insurance actually takes

4:08

care of two extreme things. One is

4:10

dying too early or living too long.

4:12

Now how does it take care of

4:15

living too long? Living too long is

4:17

basically in the form of annuity. Right.

4:19

So you basically create a corpus. using

4:22

that corpus or a lump sum you

4:24

create a huge amount of money and

4:26

using that corpus you basically start getting

4:28

monthly income post your earning age right

4:31

that's where the annuity comes and this

4:33

is where the third category comes in

4:35

which is basically creation of the lump

4:38

sum right which is basically all your

4:40

accumulation product to the savings product so

4:42

broadly three product categories one is say

4:45

term plan which is the purest form

4:47

of life insurance you pay a premium

4:49

get a lump sum in case of

4:52

death of the policyholder, the family is

4:54

taken care of at least in terms

4:56

of the financial dependencies, right? So financial

4:59

well-being is taken care of, emotional well-being

5:01

can't, but at least there is no

5:03

financial well-being. Second is the annuity product

5:05

where you basically take care of your

5:08

retired age and you get monthly income

5:10

or annual income on a regular basis.

5:12

Still the time you are alive, right?

5:15

Third is the accumulation product, which is

5:17

also called as a savings product. I

5:19

believe that within savings link there are

5:22

par and non-par. Yeah, so annuity is

5:24

largely non-par, right? So annuity is more

5:26

or less a single premium product and

5:29

then on steady income, but then you

5:31

have variations where you basically start building

5:33

the corpus for the annuity and then

5:36

start getting the annuity, right? So both

5:38

can come. So savings is more building

5:40

that corpus. par and non-par again like

5:42

par stands for participating and non-par stands

5:45

for non-participating yeah so participating meaning a

5:47

company so whatever profits company earns they

5:49

they share it with the correct let

5:52

me put it the other way round

5:54

Let me first explain non-participating. So non-participating

5:56

is very simple, basically says this is

5:59

the kind of premium that I will

6:01

pay over the next five years, ten

6:03

years, fifteen years. What are the number

6:06

of the premium payment term that you

6:08

choose for? And then this is the

6:10

money that I will get. So the

6:13

money that I as a customer, as

6:15

a policyholder, I have to pay, that

6:17

is identified. And the money I as

6:19

again a policyholder post this period, the

6:22

money that I will get, you can

6:24

also decide whether I get it as

6:26

a cash pack back in terms of...

6:29

say monthly income or an annual income

6:31

or I can also lump sum right

6:33

so these are guaranteed you're up front

6:35

knowing when you buy the policy you

6:37

exactly know what is the amount of

6:39

premium that you will be paying and

6:41

what's the kind of money that you

6:43

will get right and the whole whatever

6:46

investment management or the risk associated with

6:48

interest rate movements anything is the responsibility

6:50

of the life insurance company to take

6:52

care of right so it's guaranteed for

6:54

the customer and that's that's the non-part

6:56

definition So what you get is

6:58

the other one, which is participating,

7:00

where the payment terms or basically the

7:03

premiums that you pay, that more

7:05

or less remains same as the

7:07

non-power, but the maturity or the

7:09

maturity proceeds or the benefits that

7:11

you get, that can change. Now

7:14

in that case is where the

7:16

pool of money that gets created

7:18

under that segment, the participating policy

7:20

segment, that also gets invested into

7:22

the market. As I said in

7:25

the earlier one. the outcome is guaranteed.

7:27

In this case, the policyholder also

7:29

participates along with the

7:31

life insurance company, where in

7:34

case if the interest earnings is

7:36

wonderful, right, you actually do

7:38

much better. The environment or

7:40

the market environment is something

7:42

which actually enables you to

7:44

earn more. That benefits also

7:46

gets shared between the policyholder

7:48

and the company. Similarly, in

7:50

case the experience of the

7:52

number of people who continue

7:54

to stay with that. product.

7:56

If that happens, that experiences,

7:58

all the experiences. experiences

8:01

can be in the form of

8:03

investment income. Experience because there is

8:05

a death cover associated experience can

8:07

also be in the form of

8:09

mortality which is the death. When

8:11

you price a product you assume that

8:13

certain amount of people will not kind

8:15

of complete the whole tenure but can

8:18

on account of say death or because

8:20

of certain other aspects they might exit.

8:22

So all those things are also called

8:24

as participating. This has an impact on

8:27

the end maturity amount. the customer as

8:29

well as company, they kind of pull

8:31

it together and then those experiences gets

8:33

factored in. That's the reason it's called

8:36

as participating. So they actually participate but

8:38

some base guarantee is given. It's not

8:40

that it is absolutely no guarantee. So

8:43

there is some amount of base guarantee

8:45

given. and more profits can go upside.

8:47

Well, the base guarantee and you can

8:49

actually get much about that. There is

8:52

a possibility that and this much about

8:54

can vary based on what the actual

8:56

experience is. There is a base

8:58

guarantee which is given when you buy a

9:00

book. Okay, now coming back to term

9:02

insurance, I believe that term insurance is

9:04

not about whether you should buy it

9:07

or not, but whether you will get

9:09

it or not. So when I bought

9:11

my own term insurance policy, then I

9:13

realize the process is quite stringent. It

9:15

takes time you have to first fill

9:17

up all, you have to declare so

9:20

many information, then proper medical checkup also

9:22

gets done, then again under writing takes

9:24

some time. So the process is stringent,

9:26

how to simplify it, so that more

9:28

penetration and term insurance can happen. So

9:30

how many years earlier did you buy

9:33

the policy? I bought very recently two

9:35

or three months ago. So a lot

9:37

of development has actually happened and

9:39

you will see the process being

9:41

made much simpler. In fact earlier

9:44

if you notice say four or

9:46

five years earlier or even ten

9:48

years prior life insurance especially the

9:51

term plan was more kind of

9:53

was catering towards the salary

9:55

segment because the formal form

9:57

of employment there is income

10:00

and those kind of things, right? So

10:02

I can understand this challenge. But over

10:04

the years, and if you actually take

10:06

us, take our own example, and we

10:08

figured out that this is a supply

10:11

side issue, and we figured out that

10:13

we need a solution, and this is

10:15

where the whole digital and data-enabled underwriting

10:17

has actually helped us. So what we

10:20

are talking about is broadly, if I

10:22

want to simplify. When you do an

10:24

underwriting, there are two parts of underwriting,

10:26

right. and as I said insurance especially

10:28

term plan first let me explain the

10:31

product again term plan is a risk

10:33

mitigation product right so when you buy

10:35

a term plan you're basically is supposed

10:37

to take care of an unforeseen event

10:39

not a certain event right there is

10:42

a possibility of an event can happen

10:44

or an event can't happen right this

10:46

is this is where a term plan

10:48

comes in otherwise how do you justify

10:51

a 10,000 rupees and a one kor

10:53

cover right if it is a certain

10:55

event the premium doesn't work so it's

10:57

a It's a pooling mechanism. A lot

10:59

of people buy and some of them

11:02

actually die. Then in that case, it's

11:04

a pool which basically takes care of

11:06

it. Now it's only fair that this

11:08

entire set of people are buying a

11:11

policy. There is no anti-selection. What do

11:13

I mean by that is they're all

11:15

when homogeneous group. When I say homogeneous

11:17

age of course is factored in accordingly.

11:19

You have an actual science which basically

11:22

talks about... what age and what is

11:24

the kind of mortality rate you factor

11:26

that in which is considering that space

11:28

so whenever you have somebody who is

11:31

an anti-selection that can skew that thing

11:33

and that's the reason why you do

11:35

a lot of a lot of underwriting

11:37

to kind of take care that somebody

11:39

who is not in his deathbed or

11:42

we also have cartels which are basically

11:44

working so those are those are fraud

11:46

element but irrespective there is a there

11:48

is a huge amount of customer segment

11:51

who genuinely needed and genuinely there right

11:53

So, broadly, two underwriting. One is the

11:55

health angle, which is basically ensuring that

11:57

the health parameters are found because... that

11:59

is a certain certainty in terms of

12:02

death naturally it can't be because it

12:04

has to be an unforeseen event right

12:06

so that can't happen so that's the

12:08

reason why the health happens the other

12:10

aspect where the documentation has been a

12:12

concern because health irrespective which you know

12:14

it's a simple one you get your

12:16

medicals done and that's it right as

12:19

far as the other one where the

12:21

documentation comes in is basically health insurance

12:23

or sorry the life insurance right especially

12:25

the term insurance is again as a

12:27

risk mitigation tool and it is supposed

12:29

to take care of the income which

12:31

will not be available to the dependents

12:34

if the policy holder dies. Right?

12:36

It's ideally supposed to take care

12:38

of that income. Yeah. It's not

12:41

that one can go and buy five croir.

12:43

Correct. So that is... So that is... So

12:45

if I am, if I am earning say

12:47

a lakh rupee a month or a

12:50

lakh rupee a year just for simplicity

12:52

purposes, right? say a 10 time or

12:54

a 15 time multiple based on your

12:57

age. Suppose if I'm very young, I

12:59

might actually even suggest a 25 times

13:01

policy. But if I am more in

13:04

a middle-aged guy, say anywhere between 35

13:06

to 45, and there I would suggest

13:08

a 15 times or a 10 times

13:11

cover. Now in this case, middle-aged is

13:13

35 actually is a young age, right?

13:15

We call it as middle-age because

13:17

the insurable age is largely

13:20

your earning period. right? The time

13:22

when you're actually working and not

13:24

the entire life. So it is

13:26

supposed to take care of this

13:28

income stream if this stops because

13:30

of death. The life insurance policy

13:32

will kick in and ensure that

13:35

the dependence still get that money.

13:37

Now to ensure that a person who

13:39

is actually needing a 50 lakh

13:41

rupee cover or a one-croer cover

13:43

doesn't actually then apply for a

13:46

10-croer cover or somebody who is

13:48

actually applying even for a one-croer

13:50

cover. His income and the summer

13:53

show that is asking for, those

13:55

are in kind of sync, is

13:57

where the financial underwriting happens. Right?

14:00

basically establishing what your current earning is.

14:02

Still pool has to get widened. So that

14:04

screening is important, that is there, you need

14:06

to create that pool and no mismatch of

14:09

people policyholders coming up front. But if you

14:11

look at self-employed. Then when we apply for

14:13

term insurance, then they ask for salary slips,

14:16

asking for your income tax returns. But how

14:18

do self-employed get good insurance? Because in lot

14:20

of cases, they don't get it. Even though

14:22

they are earning well, but still they don't

14:25

get it. This is where, as you said,

14:27

the pool has to become bigger, which basically

14:29

means that we have to add a lot

14:32

more customers. In fact, if majority of the

14:34

population actually buys a term plan, it can

14:36

actually become cheaper. Yeah, more people will come

14:38

obviously then. But currently the number of people

14:41

who actually buy a term plan is still

14:43

not very high. But in our case, if

14:45

you actually look at, and that's the one

14:48

piece basically said, a larger population in our

14:50

country are actually in the non-formal income stream

14:52

or rather basically non-salaried. And that's where we

14:54

call them a self-employed. But I would actually

14:57

define the definition a little further, self-employed for

14:59

us, self-employed for us, there is a dependency.

15:01

I think that needs to be covered. It

15:03

might not directly be associated with actually an

15:06

earning. For example, if a homemaker, the breadwinner

15:08

is actually very much dependent on the homemaker

15:10

to go and actually make that earning. So

15:13

there is some, so you can't put a

15:15

value to it, but then there is kind

15:17

of a lot of dependency and that actually

15:19

encourages and enables the breadwinner to go out

15:22

there and make the living, right? So to

15:24

that extent, there is a value, which we

15:26

basically claim it as these 50% of the

15:29

breadwinners income, something on those. But is it

15:31

absolutely right? It's a proxy, right? It kind

15:33

of helps. So similarly students. There is a

15:35

lot of education that has become costlier. So

15:38

parents might have funded it or they might

15:40

have borrowed it. So when they reach a

15:42

specific age, there is a lot of investment

15:45

which has already gone. I'm not saying that

15:47

that is more to take care of his

15:49

future income, but in case if something happens

15:51

at an early age, it's a huge amount

15:54

of burden on the parents. So even students

15:56

we are covering. So anybody where there is

15:58

kind of a dependency coming in, that comes

16:00

in. As far as the income determination is

16:03

concerned, this is where we moved into a

16:05

lot of things which is called as a

16:07

data-driven strategy. So one it of course became

16:10

digital and the other one is data because

16:12

even the self-employed segment or they now have

16:14

started using the digital means a lot. So

16:16

that kind of helps us do that. Just

16:19

to give a flavor for us, right, in

16:21

our customer segment, more than 60% the self-employed

16:23

segment over the last two years because we

16:26

introduced this whole data-driven underwriting model around two

16:28

years back. Okay so you have sole term

16:30

insurance to self-employed and the self-employed segment is

16:32

now more than 60% right so more than

16:35

60% is actually self-employed which if you actually

16:37

look at our own data say close to

16:39

two or three years prior it used to

16:42

be more than 90% salaried. Okay so it

16:44

has happened in last two three years. There

16:46

has been a very conscious shift in terms

16:48

of catering. to that specific customer segment, right?

16:51

And enabling those on, which is, for us,

16:53

we call it as the zero, doc, zero,

16:55

ops model. So how does it work out?

16:58

How do you then? So we basically look

17:00

at third party data sources. The way you

17:02

can actually now borrow money, right, even without

17:04

actually having those very, very formal documentation, right?

17:07

A similar model. Credit underwriting has improved. Correct.

17:09

So this is basically we have also similar

17:11

borrowed on the similar line. So there are

17:13

various different parameters. that kind of tracking their

17:16

expenses, their banking, transaction data, that again becomes

17:18

documentation. Right? But there are certain behavioral treat

17:20

which comes to the way for example, I'm

17:23

just giving this an example, but there

17:25

are multiple data sources

17:27

that we follow. For

17:29

example, the Sibyl score,

17:32

right? So that's again,

17:34

which you can actually

17:36

get it much easily

17:39

rather than uploading a

17:41

document, right? But there

17:43

are other similar pieces

17:45

which are data sources.

17:48

We tied up with

17:50

some 20 odd data

17:52

sources, is the customer

17:55

basically provides a consent

17:57

and then we get

17:59

those sources. Not every,

18:01

all the 20 data

18:04

sources always doesn't get

18:06

a hit. You will

18:08

get a hit from

18:10

say four or five

18:13

of them. And that

18:15

gives us enough confidence

18:17

in terms of going

18:20

with the non -medical

18:22

underwriting without asking for

18:24

any documentation. And for

18:26

same risk profile, same

18:29

age, premium for a

18:31

salary than a self -employed

18:33

will differ same. No,

18:36

for us it's the

18:38

same one. So the

18:40

product is common. It's

18:42

the underwriting which has

18:45

actually enabled the

18:47

self -employed to come and buy. In

18:49

fact, for us, the product, the

18:52

primary, the base pricing is the same.

18:54

In fact, for self -employed, we came

18:56

up with this proposal of a

18:58

10 % discount on the first year

19:00

commission or the first year premium, sorry.

19:02

All right, that's interesting. Because we

19:04

want to do specifically bring out saying

19:07

that we have designed this product.

19:09

proud segment and you are catering to

19:11

it. Because the mortality, that we

19:13

haven't distinguished. So that for the age

19:15

and a specific health profile, those

19:17

remain common. So that we have not

19:20

distinguished. But yes, it's the data -driven

19:22

underwriting through data sources, the way

19:24

you set credit. We also introduced something

19:26

where the data itself is not

19:28

very limited. We get into an interview

19:30

session. That's the way even if

19:32

you notice credit, assessment happens, right? So

19:35

we do that. - Okay, proper video

19:37

interview. Oh, video interview, the question.

19:39

Understanding the financial situation, the work, et

19:41

cetera. The CKYC has become digital.

19:43

So that gives us more confidence. So

19:45

anything, in fact, rather than having

19:47

scanned images, if a source of, if

19:50

a data actually comes from the

19:52

relevant source directly, the confidence on the

19:54

data goes up. Correct. And that's

19:56

what we have kind of built into

19:58

our processes. And it's working. It's

20:00

actually working. All right, so self -employed,

20:02

understood homemaker. very simple 50% of the earning member earning spouse and

20:05

then students how do you do under writing in case of students students

20:07

we basically look at what is the

20:09

kind of course that is doing right

20:11

so professional courses it we don't directly

20:13

start with a huge number because the

20:15

initial needs might be much lower okay

20:18

somebody's pursuing NBA studying at IAT designs

20:20

or any other yeah so across the

20:22

course but then you will kind of so

20:24

it's more based on the future prospect Exactly,

20:26

so you will try to identify their

20:29

future running potential and impact on parents,

20:31

that is how you will do that.

20:33

So some immediate pieces, so it's more

20:35

to take care of any sudden impact,

20:37

the family gets some more time to

20:39

settle down on those lines. Right. And

20:41

now about some other left out segments.

20:44

So I have seen a lot of

20:46

people have talked to me about this,

20:48

that for example, take a case of

20:51

organ donation. So I know a lady

20:53

who donated organ to her father. Now

20:55

she has maintained a good life so

20:58

far and she still maintains good life

21:00

and health parameters are strong. Everything is

21:02

fine, but she is not able to

21:05

get a term policy. So this is

21:07

one thing because she has donated

21:09

an organ. Similarly, somebody may have

21:11

had a major surgery and that

21:13

surgery itself became a reason for

21:15

them to maintain a healthy lifestyle.

21:17

Now, they also don't get term

21:20

insurance even though they are quite

21:22

healthy now. Similarly, could be other,

21:24

a person may have gone through

21:26

a brain stroke, then again, they

21:28

will not get term insurance. So

21:30

how to tackle this challenge? Because

21:32

again, a lot of population then

21:34

again gets excluded. Maybe it's taking

21:36

higher premium, but at least they

21:39

should get the term insurance. The

21:41

easiest solution? I think it's start

21:43

early. That's what we have been

21:45

promoting, a lack of awareness of our

21:48

different reasons. I would like to counter that,

21:50

right? So in fact, if you actually ask

21:52

anybody in the market or anybody

21:54

in the field, wherever you meet any

21:56

of your friends, relatives, whomever you know,

21:59

or even any... general in your

22:01

meeting somebody a stranger right asking

22:03

what is insurance he will exactly

22:05

tell you what is insurance I

22:07

don't think that's an awareness issue

22:09

yeah ask him do you need

22:11

it if you ask insurance everybody

22:13

think it's a term insurance but

22:15

they have some negative position about

22:17

it they'll they know an insurance

22:19

but then they say pass a

22:21

miltoni which is not true at

22:23

all yeah Those are the only

22:25

cases where there has been a

22:27

very grave non-disclosure. Not a minor

22:29

non-disclosure. There has been a very

22:31

grave... At least in life insurance.

22:33

This is a very well-governed. So

22:36

I can say with confidence that

22:38

any claim that we would have

22:40

reviewed, though our claim settlement ratio

22:42

is 99.66% right? Any claim that

22:44

we would have rejected. That's either...

22:46

It has been a fraud case,

22:48

a very clear fraud case, where

22:50

a person is about to die

22:52

and then you buy a life

22:54

insurance policy for him, right? And

22:56

that's a cartel. Or you're already

22:58

dead, even that case has come

23:00

through. So the moment you try

23:02

and ease your underwriting, this kind

23:04

of fraud instance is coming. Or

23:06

the second one is basically, there

23:08

has been some major health hazard

23:10

that has happened, right? Or the

23:13

way you said a major surgery,

23:15

and that has not been disclosed.

23:17

So those are the kind of

23:19

cases where it comes. So the

23:21

disclosure becomes critical. Whatever it is,

23:23

you need to kind of disclose

23:25

especially all those health related questions

23:27

and your income related questions, right?

23:29

Those become very critical and disclosure

23:31

is as honestly as possible. Yeah,

23:33

that is there. But if that

23:35

is there, claims is 100% guaranteed.

23:37

There is no way. Life insurance,

23:39

I agree that in very less

23:41

cases. Claim will be rejected, no

23:43

ways there. But then coming back

23:45

to the health falla thing. So

23:47

of course this ideal solution starts

23:50

early so that because now as

23:52

I said, this has become an

23:54

event which has happened in your

23:56

own example or rather if you

23:58

just check health before this. and

24:00

health after this instance though you're

24:02

maintaining a good lifestyle and everything

24:04

that's because of that instance right

24:06

will I ever be as I

24:08

was earlier right so that's the reason

24:10

why and as I said in the

24:12

earlier case it's the pool of people

24:14

where we need to avoid anti-selection because

24:16

then the impact is taken on the

24:19

rest of the team right it's kind

24:21

of in a way participating so has

24:23

this study been done in under writing

24:25

that they are more at risk So,

24:27

obviously, with the health advancement that has

24:29

happened, right, a lot of things has

24:31

changed. So, earlier it used to be

24:33

very difficult, but now for all minor

24:35

surgeries, for example, let's call it a

24:38

surgery where you can, happens in a

24:40

day itself, you can come out of

24:42

the treatment and back home in a

24:44

day or something like that. I'll just

24:46

terms, in the simple terms, minor surgery.

24:49

There, within a year, from that surgery,

24:51

surgery, it's normalized. The premium is normally

24:53

normalized. for any kind of major surgeries.

24:55

The earlier, it used to be more

24:57

than five years. So if you wait

25:00

for five years and post five years,

25:02

it's basically more or less than normal

25:04

term. And within this major also, there

25:07

are some, for example, a bypass. Now

25:09

the waiting time is only one year.

25:11

So with the advancements coming in, where

25:13

the confidence levels are going

25:15

up, right, there it is now started

25:18

coming in. There it is now

25:20

started coming. We will have to

25:22

wait for the health advancement which

25:24

gives us much more confident because

25:26

you would have also heard relapse,

25:28

right? So those are the cases which

25:30

are still coming through. Yeah. And that's

25:32

it. The best solution is start early.

25:34

Start very early because it in a

25:37

way, right? The trigger itself is a

25:39

health hazard, which is if a trigger

25:41

would have been some death in the

25:43

family, that's a different story because

25:46

that's awareness. This one is

25:48

a little difficult. But having said

25:50

that. quite a few cases are now

25:52

getting covered because of the health advancement.

25:54

So the confidence in terms of the

25:57

life insurance companies to also cover that

25:59

has increased. also see that all

26:01

these cases, the restriction is largely

26:03

till the age 60. You will

26:05

not try, which is very ideal,

26:07

you should also buy a policy

26:10

only for your earning age, you

26:12

will see a trend that people

26:14

are actually trying to buy till

26:16

80, 90 or even that times

26:18

100, right? So it's a certain

26:20

event, naturally your pricing will be

26:23

higher. It's ideal age 60, 65,

26:25

up to age 60, 65. Okay,

26:27

now if somebody is not able

26:29

to buy it, they are not

26:31

eligible for term insurance, then what

26:33

is the second best option? Let

26:35

me actually address it a little

26:38

lengthy answer though. I'll just use

26:40

this as an opportunity to see

26:42

a pure term, a pure term

26:44

plan is a pure risk mitigation

26:46

tool. It is supposed to take

26:48

care of the income stream to

26:51

continue for the family. in case

26:53

of the policyholder's death. That's the

26:55

simplest of the concept. So ideally

26:57

if, and it should ideally be

26:59

brought in at an early stage

27:01

because you have not yet kind

27:03

of accumulated wealth, in a normal

27:06

personal lifestyle, if I have to

27:08

do my own financial planning, right,

27:10

the moment I started working or

27:12

even I am getting into advanced

27:14

education, right, is where I would

27:16

want to buy a term plan,

27:19

right, because I have not yet

27:21

started, I have not accumulated wealth,

27:23

but parallel the moment I start

27:25

earning. I will actually also in

27:27

parallel start accumulating wealth. Now assume

27:29

a scenario where by age 50,

27:31

right, I have accumulated enough wealth,

27:34

which basically means that in case

27:36

if something happens to me when

27:38

I am age 45 or say

27:40

age 50, let's continue with that

27:42

same example. In that case my

27:44

family is not going to struggle

27:47

for a steady financial stream of

27:49

income because I've created enough wealth.

27:51

or accumulated enough wealth which can

27:53

take care of it. So you

27:55

don't actually need an insurance in

27:57

that case. Insurance is more relevant.

28:00

When you have not yet accumulated

28:02

wealth, it's a risk meeting. And

28:04

that's how ideally every individual should

28:07

plan his financial journey. And there

28:09

are of course various other savings

28:11

and wealth creation opportunities that you

28:14

should do, but it enables the

28:16

wealth accumulation to happen. By that time,

28:18

if something happens, it's taken care of.

28:20

The family doesn't have to suffer. In

28:22

this skin area, where we're talking about is

28:25

largely at a younger age, this doesn't

28:27

happen. The major surgery is largely happens at

28:29

a later stage. So in case if

28:31

you buy an insurance policy up front,

28:33

this incident is taken care of. If somebody

28:35

has not been able and they can't

28:37

get a term plan later, the option is

28:40

largely savings product. a savings product now.

28:42

But in savings products which one?

28:44

That's what I want to focus

28:46

on. So both. It is more...

28:48

Don't you think that it's high

28:50

sum-insured ullip plans? High sum-insured ullip

28:52

plans will also have similar underwriting

28:54

as term plan. Okay. So up

28:56

to 20 times is where the

28:58

underwriting can be a little level

29:00

because the risk which the company

29:02

is taking 20. 20 times of

29:05

the premium number. Whereas in the

29:07

other case, it's say 40-50 times

29:09

of the premium number, naturally the

29:11

underwriting process will be more stringent

29:13

or similar to a term. As far

29:16

as par or yole or non-par, that

29:18

is more the customer's appetite, the

29:20

risk appetite. Because premium is

29:23

huge. Premium, every time it's a

29:25

10-time cover, right? So what is that he

29:27

wants to do or he or she wants

29:29

to do more in terms of what is

29:32

his risk appetite? In unit link? The fund

29:34

can also go down. It can go up,

29:36

but it can also go down. Similarly, in

29:38

the non-par segment, you have a guaranteed one.

29:41

In case of a par, the guarantee component

29:43

might be a little lower, but there is

29:45

a possibility of an upside. So what is

29:47

that? I am more comfortable with as a

29:50

customer and choose that one. So any of

29:52

the product category, the 20 times cover,

29:54

largely it's available in mutling to

29:56

that extent, yes. But a savings

29:58

product is the option. Okay.

30:00

Thank you so

30:02

much, Ateesha, for

30:05

sharing such great

30:07

insights with us.

30:09

Really interesting conversation

30:11

with you. Thank

30:14

you very much. such

30:16

great insights with us. Really interesting

30:20

To stay updated on this

30:22

podcast, follow us at htsmartcast

30:25

on all the major social

30:27

media much. To listen to more

30:29

such more such log on to

30:31

www on to .com.