With Bhutanese becoming more saving-oriented and future-savvy, the Royal Insurance Corporation of Bhutan (RICB) recorded Nu 15bn as assurance and a total number of policy holders at 109,039 as of August this year.
Millennium education policy and money bag policy are the most saleable life insurance services in the country as of now.
Currently, there are around 24 products under the life insurance scheme. Some are term insurance policy, whole life policy and endowment policy and combination of both term and endowment policy.
Life insurance plans aim to make up for the financial loss to a family in the event of unfortunate death to the assured and for old age provision.
The General Manager under the life insurance department of RICBL, Karma Sonam Tshering said that the most availed product is millennium education. This policy is targeted for children from aged zero to 10 years availed by either of the parents.
The maximum sum assured is Nu 1mn and minimum Nu 30,000. The benefit of this policy is that the investment comes with interest, life cover if there is death of a child and a parent and it is also personal income tax deductable.
GM said that the second most popular product is money bag policy. Money bag policy can be availed by people if they are aged 18 years and above.
He said that according to their age and financial capacity, the sum assured can be chosen. In between, policy holders get survival benefits after every three and four years depending upon the term of the policy.
Some of the factors of the policy are lesser the term more amount people have to pay and more the term less amount the people have to pay. It will also depend on value of the insurance: higher the value of insurance, higher the premium
Chief underwriter at life insurance department Sabita Lama said that the trend of insurance culture is improving over time and now the people are more saving-oriented.
However, she said that it is challenging for them to create insurance awareness since their products are intangible and selling future promises.
“Clients don’t come forward since there is insurance illiteracy,” she said.
She added that to create awareness on the policy the company has appointed sales executives. They consist of 60% of the total business and play a very important role.
These sales executives are paid commission depending on the amount of business they bring to the company.
The latest insurance policy RICB has launched is insurance on priority sector lending.
“We give insurance to people who avail the PSL loans. We cover the risk of human life,” Sabita Lama said, “However we are not paying the loan defaults.”
Of the total number of life policy holders, 60% consists of millennium education and 18% consists of money bag as of today.
Similarly the out of the total amount assured, 40% consists of millennium education and 18% consists of money bag policy.
Now the RICB has also taken over the rural life insurance. It is provided to all citizens aged 8 years and above.
For a total premium of Nu 195 the citizens pay an amount of Nu. 87 and the balance Nu 108 is paid by government as subsidy premium against the sum assured Nu 30,000.
For the rural life insurance, collection of premium starts on September 1 to October 31 every year.
Dechen Dolkar from Thimphu