The Insurance Regulatory and Development Authority of India (IRDAI) has introduced direct plans in the insurance sector. The aim of these processes is to offer more choices to customers and increase transparency in the market. Direct plans will enable customers to buy insurance policies directly from insurers, even without the intervention of intermediaries such as agents and brokers.
The introduction of direct plans is expected to cut down the expenses of insurance policies as customers will be able to save on the commission charged paid to intermediaries. This move will also stabilize competition in the insurance market, as well insurers will now have to compete on price and quality to attract customers.
Customers now can access to a wider range of products, which they can either compare or choose based on their needs and budget with the simple implementation of direct plans. This will empower customers to make more informed decisions and also avoid being influenced by agents or brokers who may push policies that may not be suitable for them.
The IRDAI has told that insurers offer direct plans for all their products, along with that insurers are required to clearly mention the difference in the premium rates between direct and regular plans. Insurers also need to disclose the commission paid to intermediaries for selling their policies.
Direct plans are expected to benefit customers who are tech-savvy and prefer to buy insurance policies online. The introduction of direct plans is a step towards digitization of the process making it more accessible and convenient for customers.
In all, this introduction of direct plans in the insurance sector is a positive move towards increasing transparency and offering more choices to customers. This move may also help in promoting healthy competition in the market and may ultimately result in better products and services being offered to customers at lower prices.