Life Insurance is one product that most of us will not see pay off. If you reach the age of 100, most life insurance will endow and you will receive the death benefit as if you had died. However your beneficiary of your life policy will receive the death benefit as a result of your premature demise. Evaluating your individual need for life insurance is important. Spend some time reviewing your current policies and seek help when you have questions about the benefits and features of your current plan. Be proactive instead of reactive to changes in your financial future, and adjust your life insurance program when it is warranted.
"Some point in life, death is evitable. Prepare for it, embrace it, but do not let it catch you off guard. One day the maze we travel through, we will solve, as we make our grand exit."
"Some point in life, death is evitable. Prepare for it, embrace it, but do not let it catch you off guard. One day the maze we travel through, we will solve, as we make our grand exit."
A life without insurance
Life insurance in India, for whatever reasons, has limited acceptability, even situation is more worsen in rural areas. Rural people don’t know ,what is life insurance. Even when any advisors approached them to explain about the need of life insurance most of the people says “Hame Kya Jarurat Hai Insurance lene ki, hamere pass baap dada ki Jameen jaydad hai, hamere baccho ka liye bahut hai hamare jane ke baad”.
Most of the people could not believe to own death, but it is universal truth.
Yet another set of people realize why they need insurance because they are single.
Some people have question mark/condition that life insurance is all about death benefit only.
The problem is that none of us know when we are going to die. You can leave your family in pain without taking life insurance. Life would be hell when bread & butter earner dies without any financial support to nurture the family after he dies.
Enough life insurance should be purchased in order to meet the future liabilities after the death of bread & butter earner to his family.
Life insurance in India, for whatever reasons, has limited acceptability, even situation is more worsen in rural areas. Rural people don’t know ,what is life insurance. Even when any advisors approached them to explain about the need of life insurance most of the people says “Hame Kya Jarurat Hai Insurance lene ki, hamere pass baap dada ki Jameen jaydad hai, hamere baccho ka liye bahut hai hamare jane ke baad”.
Most of the people could not believe to own death, but it is universal truth.
Yet another set of people realize why they need insurance because they are single.
Some people have question mark/condition that life insurance is all about death benefit only.
The problem is that none of us know when we are going to die. You can leave your family in pain without taking life insurance. Life would be hell when bread & butter earner dies without any financial support to nurture the family after he dies.
Enough life insurance should be purchased in order to meet the future liabilities after the death of bread & butter earner to his family.
4 A’s Approach of Indian Rural Market
The Indian rural market with its vast size and demand base provides a huge opportunity for Indian insurance companies which cannot be ignored. The rural population is nearly three times more than urban.
The importance of rural market can be understood by the FMCG angle. Rural market accounts nearly 70 % of toilet-soap users.
Rural market looks attractive but not without its problems: -
· Low per capita income
· Large number of daily wage earners
· Seasonal consumption harvesting
· Poor roads
· Power problem
The Indian rural market with its vast size and demand base provides a huge opportunity for Indian insurance companies which cannot be ignored. The rural population is nearly three times more than urban.
The importance of rural market can be understood by the FMCG angle. Rural market accounts nearly 70 % of toilet-soap users.
Rural market looks attractive but not without its problems: -
· Low per capita income
· Large number of daily wage earners
· Seasonal consumption harvesting
· Poor roads
· Power problem
4 A’s approach can be more help in understanding the rural market
1. Availability
2. Affordability
3. Acceptability
4. Awareness
1. Availability
2. Affordability
3. Acceptability
4. Awareness
Availability
This is very tough job to ensure the availability of product and services. India with huge village population, finding them is not easy.
Example: -India’s largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its brand reach the interiors of the rural market. To service remote villages, stokies use autorickshaws, bullock-carts and even boats in the backward in Kerala.
Coco-cola, which consider rural India as a future growth driver, has eveoled a hub and spoke distribution model to reach the villages.
This is very tough job to ensure the availability of product and services. India with huge village population, finding them is not easy.
Example: -India’s largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its brand reach the interiors of the rural market. To service remote villages, stokies use autorickshaws, bullock-carts and even boats in the backward in Kerala.
Coco-cola, which consider rural India as a future growth driver, has eveoled a hub and spoke distribution model to reach the villages.
Affordability
Affordability is the second challenge for the product or service in rural market. Products need to be affordable to the rural consumer with low income group.
Example: -Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs. 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh
HLL has launched its largest selling soap Lifebuoy Rs. 2 for 50 gm. The move is mainly targeted at the Rural Market
Affordability is the second challenge for the product or service in rural market. Products need to be affordable to the rural consumer with low income group.
Example: -Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs. 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh
HLL has launched its largest selling soap Lifebuoy Rs. 2 for 50 gm. The move is mainly targeted at the Rural Market
Acceptability
Acceptability is the third challenge for the product or service in rural market. There is need to offer products that suit the rural market.
Example: - L.G Electronics is the best example for customization. In 1998, it developed a customized TV for rural market and christened it sampoorna. It was a runway hit selling
1, 00,000 in the very first year.
Because of the lack of electricity and refrigerators in the rural areas, Coco-cola provides low- cost ice boxes – a tin box for new outlets and thermocol box seasonal outlets.
The insurance companies that have tailor-made products for the rural market have performed well. HDFC insurance LIFE topped private insurers by selling policies worth Rs. 3.5 crores in total premium. The company tied up with non-governmental organizations and offered reasonably- priced policies in the nature of group insurance covers. With large parts of rural India inaccessible to conventional advertising media, building awareness is another challenge.
Acceptability is the third challenge for the product or service in rural market. There is need to offer products that suit the rural market.
Example: - L.G Electronics is the best example for customization. In 1998, it developed a customized TV for rural market and christened it sampoorna. It was a runway hit selling
1, 00,000 in the very first year.
Because of the lack of electricity and refrigerators in the rural areas, Coco-cola provides low- cost ice boxes – a tin box for new outlets and thermocol box seasonal outlets.
The insurance companies that have tailor-made products for the rural market have performed well. HDFC insurance LIFE topped private insurers by selling policies worth Rs. 3.5 crores in total premium. The company tied up with non-governmental organizations and offered reasonably- priced policies in the nature of group insurance covers. With large parts of rural India inaccessible to conventional advertising media, building awareness is another challenge.
Awareness
Hindustan Lever relies on its own company-organized media. These are promotional events organized by stockiest. Godrej consumer products, which is trying to push its soap brands into the interiors areas, uses Radio to reach the local people in their language.
Coco-cola uses combination of TV, cinema and radio to reach the local people in their language.
Coco-cola advertising its ‘magical’ price point of Rs. 5 per bottle in all media.
L.G. Electronics uses vans and road shows to rural rural customers. The company uses local language advertising.
Philips India uses wall writing and radio advertising to drive its growth in rural areas.
Hindustan Lever relies on its own company-organized media. These are promotional events organized by stockiest. Godrej consumer products, which is trying to push its soap brands into the interiors areas, uses Radio to reach the local people in their language.
Coco-cola uses combination of TV, cinema and radio to reach the local people in their language.
Coco-cola advertising its ‘magical’ price point of Rs. 5 per bottle in all media.
L.G. Electronics uses vans and road shows to rural rural customers. The company uses local language advertising.
Philips India uses wall writing and radio advertising to drive its growth in rural areas.
My views
This is my personal view on my personal experience whether you agreed or not. Rural Market has huge potential to approach for Life Insurance but problem is that If I will be Advisor of some Life Insurance and approached to rural people then answer will “life insurance lene se mujhe kitna beyaj (interest) milega” and if I say you will get death benefit when u died and if u will not die you will get sum assured after maturity then his answer will be “merne tak ka koan dekhta hai, agar me kisi ko beyaj (interest) pe paisa do tho mujhe 3-4 % beyaj (interest ) mahine (monthly) ka milega, kya life insurance mujhe isse jayada beyaj (interest) milega tho hi me insurance karatha hu”.This is the real conversation held with rural customer in month of May, 2008 in Jaipur.
This is my personal view on my personal experience whether you agreed or not. Rural Market has huge potential to approach for Life Insurance but problem is that If I will be Advisor of some Life Insurance and approached to rural people then answer will “life insurance lene se mujhe kitna beyaj (interest) milega” and if I say you will get death benefit when u died and if u will not die you will get sum assured after maturity then his answer will be “merne tak ka koan dekhta hai, agar me kisi ko beyaj (interest) pe paisa do tho mujhe 3-4 % beyaj (interest ) mahine (monthly) ka milega, kya life insurance mujhe isse jayada beyaj (interest) milega tho hi me insurance karatha hu”.This is the real conversation held with rural customer in month of May, 2008 in Jaipur.
2 comments:
welcome to the blogging world..great start..keep posting more articles.
Hi pankaj
A well thought blog on insurance, I like the concept of $ A's but see if you can connect all the A's with Life Insurance, And working on last part will be really dificult for the Insurance company, don't you think ?
waiting for ur next blog
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