A committee appointed by regulator IRDAI has suggested over a dozen low-cost "micro insurance" modules with a view to expand protection plans for uncovered population and small businesses.
The committee has suggested that the insurers should be allowed to adopt a modular approach using various permutations and combinations for Combi MI (Micro Insurance) products. 'MI' aims to protect low-income people with insurance products that are affordable. The objective of MI is to empower people to cope with and recover from common risks such as death of the breadwinner, paying for treatment of serious illnesses, reconstructing destroyed homes and businesses, among others.
A one-stop solution to meet the insurance protection needs of these targeted groups will go a long way in achieving the objective of increasing insurance penetration in these strata of society, the panel said in its report.
"There is a case to have a Combi MI product which can be developed on a modular basis, giving flexibility to the insurer to offer coverage to different groups and individuals as per their specific protection needs," the report said.
The panel has recommended 14 standard modules and suggested that such products may be sold by insurers either on individual basis or group basis.
Insurers, it said, may follow a modular approach using various permutations and combinations, leaving the choice to the proposer.Certain standard products prescribed by the Insurance Regulatory and Development Authority of India (IRDAI) can be offered as modules.