Insurance companies move to fill pension products slot

To fill the void of pension products, life insurance companies are pitching monthly income plans and traditional whole life products as retirement solutions. Companies are seeing huge demand for monthly income plans since the past few months. And, till there are proper pension plans, the industry expects the demand for MIPs to rise consistently.

Monthly income schemes offer payouts at regular intervals post the premium-paying period. The premium-paying period is limited after which the payouts begin. “In the absence of pension products, we are structuring accumulation, endowment products and customers can buy annuities for monthly pensions,” said Tarun Chugh, chief distribution officer, ICICI Prudential Life Insurance. “This retirement niche is about 20% of our total business.”

As the IRDA has asked insurance companies to offer minimum guaranteed returns on unit-linked insurance policies, life insurers are projecting long-term savings options as retirement products coupled with monthly income plans.

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