In the last quarter of 2008, a flurry of single-premium products were launched. Life Insurance Corporation introduced Jeevan Aastha; Aegon Religare, Guaranteed Return Plan; IDBI Fortis, Bondsurance; and Reliance Life, Guaranteed Return Plan. More companies are expected to bring in such plans that lock in your returns for a given tenure (usually five to 10 years).

Plans that offer guaranteed additions are making a comeback. “Fear psychosis has gripped customer sentiment. We expect products that offer premium guarantee, return guarantee, or NAV guarantee to become popular this year,” says Pranav Mishra, senior vice president, product and sales development, ICICI Prudential Life insurance.

This year you could also see a few novel concepts. Says Shekhar Bhandari, head of tied agency, Kotak Life Insurance: “To get more business, companies could introduce products based on unique concepts like payments based on the best NAV in the last three years. You could have dynamic floor fund, where funds are automatically transferred to debt or equity depending on the customer’s risk profile and market conditions.”

Recent policy changes like the reduction in solvency margin will also work in customers’ favour. “Reduction in solvency margin will help pull up sales of pension and health products. It is also expected to lower the costs of Ulips,” says R. Kannan, member-actuary, Insurance Regulatory and Development Authority (IRDA).

Pension. The year will also see the opening up of the new pension system (NPS) by the Pension Fund Regulatory and Development Authority (PFRDA) to private sector workers. NPS will not only come with lower charges but will also offer flexibility in terms of fund options and fund managers. “We will have to see how it is executed. But as of now it looks very attractive. Customers will have the choice to not only change the fund but also the fund manager without paying any extra cost,” says Bhandari.

... contd.