Insurance policies find few takers amid Covid

PATNA: With people looking for ways to reduce their expenditure amid Covid-19 pandemic, even renewal of insurance policies has taken a back seat, let alone buying new ones.

Contrary to the popular belief that there would be a rise in demand for health insurance policies amid the pandemic, policy holders are faced with the dual challenge of renewing their old policies and buying new ones to avail tax benefits.

“Some of my existing well-to-do clients have defaulted on premium payments, let alone acquiring new ones. The pandemic has spared none. From business to households, everyone is short of cash at the moment,” said Anil Sinha, an insurance agent based in Patel Nagar. With liquidity crisis on the rise and no concession available on premium rates, people in the age group of 31-45 years, who are the prime target market for policy sellers, are finding it difficult to renew their insurance policies.

Patliputra Colony resident Shiv Narayan Prasad, a private sector employee, said, “Even though I have taken a salary cut of 30%, the household expenses haven’t gone down. After prioritising all my expenses, I am finding it difficult to pay the premium amount of my life insurance policy.” The economic uncertainty amid pandemic has changed the investing patterns of the households with many preferring to retain cash in the short-term over investing it in long-term insurance policies.

Shyam Sinha, a resident of Phulwarisharif, said, “The average lock-in period for any type of insurance policy is not less than five years. In an emergency like Covid-19, I would rather prefer some cash in hand than locking my money in a policy.” The prevailing scenario has also severely affected the plight of insurance agents in the city with most of them falling short of sales target and quarterly commission.

Since insurance agents are not paid any salary by their companies and earn only through commissions received from selling policies, their condition is pitiable. A significant proportion of the insurance agent workforce in the city comprises retired professionals and senior citizens who sell policies in their network. Those who are not tech-savvy are finding it difficult to adapt to new technologies.

Dinesh Prasad, a retired bank employee who started selling policies after retirement, said, “Earlier I used to meet my clients in person. Now, I have no other option but to make phone calls to them. Also, my company has launched a digital platform for enrolment of new policies. I am trying to get used to this new technology.”

Source: The Times of India

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