Mr.Narendra Modi is pushing for DIGITAL India, Should Your Insurance Also Be Digital?

August 5, 15

Mr.Narendra Modi is pushing for DIGITAL India, Should Your Insurance Also Be Digital?

Greetings from Hitesh! As per PTI, yesterday Pakistani Troops violated ceasefire and resorted to heavy firing and mortar shelling on 12 border outposts along the international Border in Jammu. In West Bengal due to Flood – many human lives were lost. While taking about August Market scenario – we had said that due to MARS we expect such incidences. We always keep you ahead of the market experts

Digital India:-

Mr.Modi is pushing for Digital India and tom, dick and harry are talking about going DIGITAL in everything you do!! Be it shopping clothes / groceries / electronics / banking or Insurance and many other things which I can’t write here.

Let me deal with Buying Insurance Online and keeping your Policies with REPOSITORIES (the way we keep share in DEMAT form in Depository).

Yesterday, I read an article in MINT. It talks about 5 advantages of going for DIGITAL Insurance. They are as under.

1.   Cost – if you buy online – you will remove the AGENT and you will save the cost of his commission.

2.   No Mis-selling- Since you are buying yourself – you will THINK and buy. So no AGENT mis-selling.

3.   Policies in DEMAT account – Electronic Policies – so, it is SAFE and Long Lasting then PAPER Policies.

4.   Post Sales Services - no need to depend on AGENT as everything is FAST and online. You deposit premium online and you go for claim settlement also online!!

5.   Fast Processing – since company gets info through email or their customer service applications – they can process your claims fast.

What is our View?

Time and again I have been observing that people can talk about almost anything in India – for or against and they can be appreciated for that. People will follow them also. We always lack the COMPREHENSIVE thinking on any issue and are not capable to think Long Term Consequences of anything we do.

According to me the above benefits do not addresses the insurance issue in Comprehensive Manner and the NOVICE reader will be taken for a ride by reading such articles. Let me start with the BASIC.

Why do you buy Insurance?

I can think of following reasons.

1.   To take care of your family needs – in case you die early.

2.   To take care of your retirement needs – in case you live long.

3.   To take care of Education and Marriage needs of your CHILD.

4.   To take care of your medical expenses – in case you have to go through some medical treatment.

5.   There are other insurance for Fire/ Theft and many things – to address the risk of that particular area.

Now, when does this events take place?

If you look at the DEATH/MEDICAL TREATMENT / FIRE/ THEFT – it can happen anytime. It can be the next day also or it can take 30 years also. Nothing can be said about it. That’s why we are taking INSURANCE.

In most cases it takes longer period of time – that’s why INSURANCE Companies are making super profit!! In short, all insurance contracts are for long term and they are renewed periodically.

Let us keep the above in MIND and deal with the ADVANTAGES Mentioned in the ARTICLE.

Cost Advantage:-

If you are buying a BOOK – you buy it from FLIPKART and gets 40% discount while your bookseller will give you only 10% discount. This makes sense as you get the book, you pay the money and your CONTRACT is over. This applies to anything you buy online – branded clothes / shoes / mobiles etc.,etc.

In case of INSURANCE – CONTRACT becomes operational only and only when the event takes place!! Till that time - your policy is nothing but A PROMISE by insurance company to you.

The main issue here is – when the event takes place – say a DEATH – the person who has taken ONLINE insurance is NO-MORE. How to find out about his insurance details? ( Here the writer is assuming that WIFE and KIDS are TECH SAVVY and FATHER HAS informed all about his insurance and  given his password to his wife and kids!!!)

Just to give you the PERSPECTIVE – the Internet penetration in India as per the 2014 report is just 14%!! So, as such 86% have no Internet access or are not geared up to use the same. In other words, NO online for major population as of now!! Moreover, most INTERNET things ( particularly insurance)  are in ENGLISH. Here also we are assuming that all are ENGLISH LEARNED!!

In case of MEDICAL issues also – say you have a HEART ATTACK – will you have the sense to remember your online policy details or your family members will have time to do that with serenity of mind?

Traditionally, insurance is sold at home. AGENT comes to your home to sell you the policy. Normally he is your known guy or your friend. All your family members know him and they have their details. In case of any emergency – you just have to call your agent and he can work with SERENITY of mind under emergency, as he is not directly affected by the event.

Let me ask you another question – how many of you believe that you are going to DIE? We always believe that we are going to live for ETERNITY. In such case, to buy LIFE Insurance depending on your HUMAN LIFE VALUE is very less without proper guidance.

The AGENT is the only guy who reminds you politely about it. He has to remind you at least 9 times – so that you listen to him 1 time!! (Insurance selling statistics shows this).

If he does all these for you and earn money honestly from INSURANCE COMPANY – I think that COST is BEENFIT and not COST as said in the ARTICLE.

MIS-SELLING:-

Another Point Writer is making Mis-selling. Here the assumption is that since you are buying yourself – you will buy it properly!!

Do you think you are buying COLGATE Toothpaste or LUX Soap out of your choice? Not at all, my dear. Apparently, it looks so. But you are bombarded with ADRVERTISEMENTS everyday. So, naturally, when you go to shop – you ask for COLGATE or LUX Or Lifebouy. They are shaping your MIND through invisible FORCES!!

What about the mis-selling by a company? Look at MAGGIE. After 25 years – we have been told that it is not wroth eating in INDIA!! Recently a guy from GUJARAT bought an IPHONE online from a leading site and he got stone inside!! He had already paid it online!!

Another mis-selling happens – you buy the same TV as your neighbour bought. You buy the same policy, which your friend has bought!! In short, MIS-SELLING is larger phenomenon and by REMOVING AGENT – you are making it more complex.

More over, Insurance companies give their terms and conditions in SMALL Letters. The wordings are in legal terminology. To understand the same for a NORMAL EDUCATED GUY is difficult.

In the above scenarios – to assume that you can take a CALL INDEPENDENTLY is too much. LIFE Insurance is the MOST IMPORTANT decision of your life. You need some expert for the same. If at all you want to go for online – appoint an advisor, take his views and go for it.

DEMAT POLICIES:-

This is another theme coming into the market. Argument for demat policies are that – you save COST / PAPER / FIRE and THEFT Proof / long lasting etc., etc.

According to me – LIFE insurance is a proof of my love to my family. Assume that you are showing your policy documents to your wife and explaining the benefits to her and showing her name as NOMINEE on the document – how will your wife FEEL? Just visualize scenario. My experience shows that she feels more attached.

Show a MARRIAGE and EDUCATION Policy to your CHILD – explain him or her the benefits – your child will love you more from that moment onwards. Just do it and tell me. HE or she will feel more responsible / serious about his / her career.

With DEMAT policies – this will not be possible. Insurance company are in business for many years – they should find out the long lasting paper and they must spend those money for that. It’s not worth saving PAPER COST!!

The way TECHNOLOGY is advancing – CYBER THEFT will also refine their skills. So, to assume that it is THEFT Proof or not possible to manipulate is novice. Moreover, who will pay for the DEMAT account CHARGES and SERVICE TAX ( now 14%) on the same? I think all they want is to shift the POLICY COST TO YOU!!

Just to take you 20 years BACK – how many times you used to read the LETTER of your relatives/friends? How many times you used to read the DIWALI Greeting CARDS? You used to keep it and cherish the moment. In current time – how many TEXT or WHATSAPP or email you read and KEEP IT?

Post Sales Services / Fast Processing:-

With the proper agent – I think you will have faster services in INDIA than online.

My Personal Call:-

There are just two ways to be successful in life. You must use somebody’s time and somebody’s money as much as you can. Just look at any successful guy – he would have done these two only.

With the INTERNET / ONLINE penetration – you are doing – DO IT ALL YOURSELF. You are wasting your precious time for the petty issues. With online – you are losing your DELEGATION SKILL / personal relationships and hindering your GROWTH.

When you shop online your EGO gets a boosts that you are in CONTROL of the situation!! This is 100% false. Some invisible forces are making you do what you are doing. So, use online services with proper senses.

Have a Great MID WEEK.

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Live With Passion…. Invest With Passion.

Hitesh Parikh