Standard Products Revealed By IRDA

Enhancing insurance access in rural area, Insurance Regulatory and Development Authority (IRDA) revealed the standard products which are to be sold through the life insurance companies with about one lakh common service centers. Saving product and a term plan are the two kinds of standard product sold with a low ticket size in the sale. These products of the distribution model are to be prefixed as CSC by IRDA for exclusive classification. And, all the insurers will be required to file their product under this tab for the distribution purpose.

Delighted with the change, Rajesh Sud, MD of Max Life Insurance has taken this as a positive chance to grow companies beyond cities. This way they can easily target the relevant customers. He added that it is a voluntary model.

According to IRDA, there is a commission to be paid along with service charges to continue the post sale services of the policy under CSC and the maximum commission would 5% of the premium paid which is to be submitted only for the 1st year and nothing to be deposited from 2nd year onwards. Also, every activity performed by CSC will be having some fixed service charge.

CSC’s standard product would has the maximum premium of Rs 20,000 with a tenure lying between 5-15 yrs and the maximum sum assured for term plan would be Rs 2 lakh. The guidelines and business will be reviewed with time.