Team AckoSep 1, 2021
Those who seek insurance policies are usually advised to choose a comprehensive cover. This is applicable across insurance verticals such as Car Insurance, Health Insurance, etc. However, what if there was a non-comprehensive insurance policy that was also productive? Yes, such policies do exist. They go by names such as Bite-sized Insurance, Sachet Insurance, or Small-ticket Insurance.
A Bite-sized Insurance Policy covers specific needs for a comparatively shorter duration. Such policies are available at a lower premium and can often be purchased from online insurers using a smartphone without the need for documentation or tests.
As the name suggests, such policies are available in ‘sachets’ instead of the entire package. Thus, if a Comprehensive Health Insurance policy is a long-term package, a Dengue Insurance Policy is a short-term sachet.
Bite-sized/Sachet/Small-ticket Insurance is a category. It is not restricted to Health or Car Insurance. Thus, the cover of such a plan and the duration will vary as per the chosen policy. For example, while buying a smartphone from your preferred online e-commerce platform, you can also buy a Mobile Screen Protection Insurance Policy. As such insurance plans are specific, they will have limited but focused insurance coverage. Here’s a list of some relevant insurance products available in the market.
Cybercrime is on the rise. Such a plan is designed to insure you against losses faced due to cyber-attacks and online frauds.
Technological advancements have resulted in high-end phones. Nowadays, most phones come with a touchscreen feature. The screen’s clarity and size are a big factor as there’s a lot of content being consumed via smartphones. Thus, there’s a dedicated cover to insure screen damage.
This is a disease-specific Health Insurance Policy. It can be purchased from the insurance company’s app or website.
This plan insures passengers (seated in the hired cab) in case of accidents, loss of baggage, etc. It comes at a nominal cost and can be purchased for cab rides.
A dedicated Travel Insurance Policy for your backpack.
Bite-sized/Sachet/Small-ticket Insurance plans are directed towards millennials. They are non-traditional insurance products and are ideal for those who want to start building their insurance portfolio.
The entry barriers to such plans are almost negligible. For example, unlike some health insurance plans where you need to undergo a health test before the insurer insures you, there is no such requirement for bite-sized plans.
The exact eligibility for the plan will depend upon the type of policy you are about to buy. For example, you will be required to book a cab to buy cab-ride insurance.
There are two prominent reasons why you can opt for such policies. One, they cater to an unmet need. Second, it is beneficial from an insurance portfolio standpoint.
Long-term plans cater to a wider audience. Whereas short-term bite-sized plans cater to a niche audience. They fill the need gap. For instance, Cab-ride Insurance caters to a specific audience and offers a product that was not available in the traditional sense.
If you are new to the world of insurance, Bite-sized Insurance Policies are a great way to get introduced to it. Once you are comfortable buying insurance policies and understand them better, you can expand your portfolio and include other, long-term plans.
For example, you can buy a Dengue Insurance policy if the threat of the disease is prevalent in your location in addition to a Comprehensive Health Insurance Cover for an extensive cover. Suppose you fall prey to dengue and want to claim, you can use the bite-sized plan for claim settlement instead of the Comprehensive Plan. Not claiming against the Comprehensive Plan will help you receive the No Claim Bonus while renewing the policy.
As Bite-sized/Sachet/Small-ticket Insurance Policies are standard policies with almost no scope for customization, the premium for such plans is also usually the same for all policy seekers. Such policies do not need excessive underwriting and pricing as they are often straightforward insurance policies with simple terms and conditions.
Here are the prominent features of Small-ticket Insurance Policies.
Such plans are perfect for temporary requirements. There is no commitment needed for long-term continuity. They are need-based and can be a good entry point to understand the benefits associated with insurance policies.
You can avail such policies without spending much to buy them. They are affordable and offer great value for money. For example, Cab-ride insurance can be as low as Rs. 1 for every cab ride.
The process of purchasing such plans is super simple. There is no paperwork involved, nor is there a need to upload documents. Simply tap, pay, and receive your online policy.
Since such policies are straightforward with comparatively fewer complications, they are easy to claim. They can be raised directly via smartphones provided the insurer has the facility.
Here’s a list of things you need to keep in mind before buying Sachet-based Insurance Products.
Purchase from an authorized insurance seller.
Prefer a digital-first insurer for a convenient insurance experience.
Check out the terms and conditions of the plan before buying and claiming.
If there’s an overlap in the cover with your existing policy, make sure you want to go for it or not by considering the pros and cons of such an overlap. For example, buying Dengue Insurance even if you have Comprehensive Health Insurance.
Do not purchase if you do not feel the need for it. Buying it simply because it is affordable and easily purchasable might be counterproductive.
As such plans are usually attached to a particular product or service, you need to purchase them after purchasing the product/service or along with it. For example, you can purchase Cab-ride insurance while booking the cab, and buy Mobile Screen Insurance while buying the Mobile.
Some products like the Dengue Cover can be purchased from the insurer. Thus, the exact process concerning how to buy Bite-sized Insurance will depend upon the type of insurance plan you want to buy. For any assistance, you can contact the insurer directly. Do not buy the plan without understanding the cover and the terms and conditions.
Micro Insurance is a special category of insurance policies created by the IRDAI. Such policies are designed for economically vulnerable sections of society. Such policies have a sum assured of Rs. 50000 or lower. They are offered by intermediaries such as Non-governmental Organizations, Self-help Groups, and Micro-finance Institutions.
Bite-sized Insurance is designed like a short-term and niche insurance product. Unlike a Micro Insurance product, it is not specially designed for the economically vulnerable sections.
Mentioned below is a list of queries related to Bite-sized insurance.
Q1) Is there a difference between Bite-sized Insurance and Small-ticket Insurance?
No, they are different names for the same policy. Such a policy is also known as Sachet Insurance.
Q2) What is the main objective of this type of insurance?
The main objective of such policies is to offer specific insurance coverage at a low cost. As such policies require short-term commitment, they can be a good option to introduce people to the concept of insurance.
Q3) Can I buy a Sachet Insurance Policy as a health cover even though I already have an annual health plan?
Yes, you can buy Sachet Insurance for better health portfolio management. If you have a Sachet Insurance Policy for a specific disease, you can claim against it if you are hospitalized due to the disease instead of claiming against your annual health plan. You can keep that plan claim-less and benefit from the related No Claim Bonus, which is a renewal discount.
Q4) What is an example of ‘health insurance in a sachet’ policy?
Dengue cover is an example of Sachet-sized Health Insurance Plans.
Q5) Are senior citizens allowed to purchase Bite-sized Insurance?
The entry barriers for such plans are low. In most cases, senior citizens can avail such plans. For example, age is not a concern while buying a Cab-ride Cover or Mobile Screen Cover. However, it might be considered for health-specific plans.
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