Tarannum Hasib – What to look out for when buying an insurance?

Vivek Law: Hello and welcome to this very special series Finance Made Simple. Joining me today is Tarannum Hasib who is the Chief Distribution Officer at Canara HSBC Life Insurance. Thanks very much, Tarannum, it's a pleasure talking to you. You know one of the things the pandemic did is make people sit up and take note of the fact that they aren't insured. We've always talked about the very low levels of penetration of insurance in our country and to some extent, COVID changed things. At least people started thinking about the need for insurance. So, my question to you is since you are the person who's the touchpoint with customers - what should a customer look at before buying life insurance?

Tarannum Hasib: One of the most important things for every financial decision and insurance of course is one of the financial decisions, your current state, and your current financial situation - awareness of that is also extremely important. Because a lot of people do not assess their current financial situation. And once you do that you can figure out your goals because an insurance product it's a long-duration product extremely important for any investor to understand what is the end purpose for which he's investing. So, I think the future goal with an understanding of your existing current financial situation is extremely important and that is why we do human value analysis so that we understand what is the future need of the customer and then sell a product accordingly. For an insurance product, it's extremely important for a consumer and a customer to understand what is the duration of the product for which he wants to pay. Since this is a long-term product and the best returns are earned if you are invested long. So, I think that is a typical aspect. In the world today, we see that people want quick returns for everything and that's the psyche but I think for an insurance product if you have a long duration in mind I think you can optimize your returns well. And that needs to be understood when a customer is purchasing insurance. I think it is very important to understand the terms and conditions and especially the charges involved in every different product so that there is no surprise for the consumer when he's purchasing. So, charges and transparency of terms and conditions he should ask the advisor or the banker from who he is purchasing or online also just understand the terms and conditions. And also the claim process because the claim process is extremely important. So, one should figure out what are the different claim settlement policies the company follows and what are the processes and timelines involved for any company to settle claims. One important aspect like you said in the pandemic what increases demand for term insurance apart from savings. So, typically you buy term insurance to replenish the income of your family if an unforeseen event happens to the breadwinner. So, that is very important to assess that what is the lifestyle you would want your family to maintain once an unfortunate event happens and you're no more. So, the Sum Assured is very essential. In the erstwhile days, we've seen people taking very minimal Sum Assured, and later on, god forbid something goes wrong then the money available at that time is not sufficient to maintain the lifestyle of the family. And the term insurance premiums are way cheaper. So, very important for the customer and consumer to understand the difference between savings need and a term need and then buy a product.

Vivek Law: Alright, Tarannum. We leave it there. Thank you very much for joining me and sharing your thoughts and perspective on a very important subject. Thank you once again.

Tarannum Hasib: Thank you so much, Vivek. It was a pleasure.