Key considerations for getting bancassurance

In Bangladesh, bancassurance is gradually becoming a popular and convenient way for customers to purchase insurance products through their banks. This service allows individuals to access both life and non-life insurance policies directly from their trusted banking institutions, often alongside their regular banking transactions. If you are thinking about getting bancassurance—that is, buying insurance through a bank—it is important to understand the process and the key factors that will help you make a well-informed decision tailored to your needs.

Bancassurance refers to the partnership between banks and insurance companies that enables banks to sell insurance products to their customers. This means that when you visit your bank for everyday banking activities or loan services, you can also explore insurance options such as life insurance, health insurance, motor insurance, or travel insurance. Many banks in Bangladesh, including prominent names like Eastern Bank Limited and BRAC Bank, have started offering these services to make insurance more accessible and convenient for their customers.

Opening an insurance policy through bancassurance is designed to be straightforward and customer-friendly. Typically, you would begin by visiting your bank branch or using the bank's online platform, where bank staff can guide you through the available insurance products. You will need to provide identification documents such as your National ID card or passport. Thanks to the electronic Know Your Customer (e-KYC) system introduced by Bangladesh Bank, this process is often quick and requires minimal paperwork—sometimes completed within just a few minutes.

Once you have selected the insurance product that suits your requirements, you will complete a simple application form. Premium payments can often be linked directly to your bank account, allowing for convenient automatic deductions. After completing the process, you will receive your insurance policy documents either physically or digitally, which will outline the coverage, terms, and conditions of your policy.

Before committing to a bancassurance policy, it is essential to consider several important factors. Understanding the coverage and exclusions of the policy is critical. Every insurance product has specific terms detailing what risks are covered and what is excluded. For example, a health insurance policy might not cover certain pre-existing conditions or specific treatments. It is important to ask the bank representative to explain these details clearly and to clarify any doubts you may have.

Another key consideration is the insurer's claim settlement record. In Bangladesh, life insurance companies generally have higher claim settlement rates compared to non-life insurers. Knowing how efficiently and fairly claims are settled can save you significant stress in difficult times. You can request this information from your bank or check reports published by the Insurance Development and Regulatory Authority (IDRA).

It is also wise to compare premiums and benefits offered through bancassurance with those available from other insurance providers or agents. While bancassurance offers the convenience of purchasing insurance through your bank, premiums and benefits can sometimes vary. Ensuring that the policy provides good value for money and meets your financial goals is essential.

You should also consider your financial needs and budget. Insurance should be affordable and appropriate for your situation. Avoid purchasing policies that are too expensive or provide coverage you do not need. Reflect on your current and future financial responsibilities—such as protecting your family, securing a loan, or covering health expenses—and choose a product that aligns with these priorities.

Understanding the payment terms is equally important. Many bancassurance products allow premiums to be automatically deducted from your bank account, which is convenient. However, you should be aware of the payment frequency—whether monthly, quarterly, or yearly—and the consequences of missing payments, as some policies may lapse if premiums are not paid on time.

Finally, inquire about policy servicing and customer support. It is helpful to know how you can access assistance, make changes to your policy, or file claims. Banks typically provide dedicated bancassurance units or contact points, but understanding the process and expected timelines will help you manage your policy effectively.