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Customers forced to buy insurance policies with other products

April 26 2012

Indians since many years have been unknowingly forced to buy certain insurances that is bundled with services and other products. For instance, an individual opting for home loan is forced to take a home protection cover. Why this forced act? Is it to prove the importance of insurance when purchasing an asset or is it something more to this? The reasons may be many, but what one should know is the fact that IRDA (Insurance Regulatory and Development Authority) too is concerned on the same and hence it has come to a decision that such bundling forces do no good to any customer but vis-a-vis the dealers surely earn better perks and commissions through forceful bundled insurance deals.

IRDA has also pin pointed to the fact the lack of transparency is the core reason behind such a worry. IRDA explains, when insurance is clubbed with goods or services the customer is unable to recognize or understand in detail about the price of that actual insurance policy, it's benefits and features. It has also been noticed that such bundled policies not just affect the common man's pockets without their notice but it also affects the repute of insurance industry. Simply putting,when the insurance company and the dealers make a nexus the company may usually accept to reimburse through claims in times of damages, but if one may notice it is the dealer who bears the fruit of profit and benefits with car repairs while the car insurance companies actually bleed.

To avoid falling prey to such deals, it is important for a customer to understand such deals. Even if an individual is recommended to purchase an insurance policy along with the existing goods or services he/she should study that option and understand its importance or relevance in his/her life. Also, there may be times when the deal offered is best and appropriately suitable, so he/she should know to accept such offers. This may just be ones jackpot or luck if he/she gets through the best bundled policy with goods or services. But, why wait to be lucky; India should learn to understand and segregate the good from the bad and IRDA should come up with stringent regulations and ensure to work on two aspects: firstly- Transparency in deals and secondly it should not be a compulsion for any customer to purchase the covers.

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