Private Insurance Companies Safe?

POSTED BY Ram ON May 3, 2012 10:17 pm COMMENTS (2)

This might have been asked several times but I just want to highlight that when we buy a term insurance for 35 years or maybe even more than that, we’re assuming that the insurance company will not pack bags and leave India. How safe is that assumption?

I was reading in Outlook Money’s recent issue that private insurance players are “fully safe” and that they won’t just leave. What gives them that assurance?

I mean, can a company not go bankrupt? What happens to an insured person if that happens? One might argue that the likes of HDFC or ICICI are safer in that respect, but we all know that the best deals are from Aegon Religare and Aviva.


2 replies on this article “Private Insurance Companies Safe?”

  1. Dear Ram, instead of directly answering your query, I w’d like you to search for AMP SANMAR & HDFC Chubb.

    Please post down your findings in this discussion.



  2. We have discussed this several times before.

    IRDA regulates the insurance industry and the companies and even last week they raised the reserve amount companies must set aside which was to impact the profits for the industry. There is very little reason to worry unless an epidemic disease starts claiming lives in a very large scale. [War and acts of terrorism are excluded in most insurance policies].

    In the worst case some company is breaking apart – this is my personal opinion – nothing official or coming from an authoritative source – we have our regular scapegoat LIC for the rescue. Govt/IRDA will force LIC to take up the failing firm’s business and the premiums may be increased big time. But the policies will be honored. This last para is strictly my personal opinion though.

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