Life Insurance Marketing in India (C) The Changing Product & Pricing Norms

Product Innovations Contd...

According to company sources, it planned to offer high quality service to customers. This way, it could distinguish itself from others on the service plank along with the product aspects. The company also offered its customers a choice between the base products (the company offered two products – the endowment policy and the money back policy) each of which would be accompanied by four riders (critical illness, accidental death benefit, waiver of premium and double sum assured), according to the requirements of the customer. HDFC Standard Life offered 14 pre-packaged products from which customer could choose the one that best suited their needs. Also, the customers were allowed mix and match the benefits in order to create a most suitable product according to their needs. The company also planned to introduce unit-linked products and individual pension products after the required amendments were made to the Insurance Bill.

According to insurance agents of different companies, investors had started showing interest in the products being offered by private insurers. ICICI Prudential's products were classified under four categories: savings plans, protection plans, retirement plans, investment plans.

Savings plans provided the option of savings along with insurance, protection plans provided protection, retirement plans were meant to provide regular income to an individual after a certain time period and investment plans enabled individuals to invest their money in the market and receive high returns. According to an insurance agent, ICICI policies had an edge over LIC's policies meant for long-term investors, because ICICI offered compound interest while LIC offered simple interest.

It was reported that, for a 20-year endowment policy, ICICI Prudential Save 'n' Protect, the annual premium was lower than that of LIC's endowment policy. ICICI even offered accident benefit and disability benefit riders with a marginally higher premium of Rs 270 per annum. ICICI Prudential also launched a pension plan 'ICICI Pru Forever' which would provide the policyholder a fixed income after a certain period of time with additional riders such as critical illness benefit, major surgical benefit, accident and disability benefit. Tata AIG came up with whole life policy known as MahaLife, which would provide life cover for 100 years, with guaranteed annual payments of 5% of the sum assured each year from the 13^th year for the rest of the policyholder's life.

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Case Details

Case Code : MKTG028
Themes: Pricing
Case Length : 14 Pages
Period : 2000-2002
Organization : ICICI Prudential, Max New York Life, ETC
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Insurance

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