You may soon be able to insure your life as well as your motor pump by buying a single policy.

The Insurance Regulatory and Development Authority (IRDA) is currently toying with the idea of allowing insurance companies to issue composite policies for micro-insurance.

In India micro-insurance is defined by the size of the policy (Rs 5,000-Rs 50,000 sum assured) and covers health, household, fire and motor insurance portfolios that are non-commercial or of lower asset value. In what could be considered the integration of life and general insurance, the IRDA will soon issue broad guidelines authorizing composite products for micro-insurance.

As per the new regulation, individual companies will now be allowed to design composite products within broad parameters. They will be branded as micro-insurance products for “file and use.” A single agency system can sell these packaged composite products.

Currently, only in the case of health insurance, a life insurance company can purchase a health rider from a general insurer and attach it to its base product.

The new micro-insurance regulations on the anvil allow cross selling of insurance products by life and general insurance products. According to analysts, the introduction of a composite product with a life and general insurance component, would further cement the tie-up between life and general insurance companies.

Though the proposed micro-insurance regulation is being awaited, the four public sector general insurance companies are keen on tying up with LIC in the area of micro-insurance.

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