Vibha Padalkar, MD & CEO of HDFC Life Insurance, discusses the impact of recent tax changes on the insurance industry. She believes that while tax benefits may influence short-term behavior, they will not stop people from saving in the long run. She notes that Indians have a cultural habit of saving for the future, and this mindset will not change easily. Padalkar also emphasizes the importance of having a savings plan, particularly in volatile markets, and highlights the benefits of investing in a long-term insurance product.
Regarding HDFC Life’s pension product, SAGA, Padalkar explains that it offers a unique feature of providing both accumulation and guaranteed annuity rate lock-in at inception, which sets it apart from the National Pension System (NPS). She notes that SAGA’s guaranteed annuity rate lock-in option is particularly beneficial in today’s low-interest rate environment, where future interest rates may be lower.
In terms of the current market volatility, Padalkar believes that it will push people towards insurance products, citing the inverse correlation between equity markets and traditional insurance products. She advises diversifying investments and not putting all eggs in one basket.
When it comes to investment strategies, Padalkar emphasizes that a single, comprehensive plan is more effective than mixing and matching multiple products. She warns against procrastination, as it can have serious consequences, and advises that people opt for a single insurance product that meets their needs, rather than multiple term plans and mutual funds.
Regarding policies with no medical tests, Padalkar notes that HDFC Life prefers to be thorough in its underwriting process, ensuring that claims are not denied later. She highlights that many insurers may approach underwriting differently, allowing easy entry and scrutinizing claims later, which can lead to difficulties in payouts.
Finally, Padalkar discusses the issue of mis-selling and how HDFC Life addresses it. She notes that while mis-selling is a concern, it accounts for less than 0.5% of the company’s total business, and the company takes extra precautions with vulnerable segments, such as individuals with low incomes and senior citizens. She also highlights the importance of simplified communication and 100% verification calls to ensure policyholders understand their policies clearly.