NULIPs Have The Tax Advantage Over Mutual Funds: Dhirendra Mahyavanshi, Co-Founder, Turtlemint

Tell us a bit about your business model. You’ve adopted an “Advisory” approach. What led to this decision?
Insurance is a high involvement and complex product. Our data analysis showed that people do a lot of research about the products online, however, when it comes to purchasing, they still prefer to do it offline. An advisor plays a role of a facilitator in helping to understand the requirement of the customer and to decide on buying the right product. Again, post-sales can be done online.

We saw a definite need to have a mix of technology and human touch and took this opportunity into our business model.  Thus, we went back to our business model to empower the insurance advisor community with technology, which has given us an overwhelming response from the financial advisory community.

On the life insurance front, what products do you focus on? Do you deal with pure risk products, or savings products too?
We focus on term plans, endowment plans, Child Insurance plans, ULIPs as well as Pension plans in life insurance front. So, yes we deal in both risk as well as savings plans, depending on the need of the customer.

You raised a substantial funding round earlier this year. How do you intend to utilise the funds? At what stage do you expect to be cash-positive?
We have been doing and will continue investing in technology along with expanding our network of agents, create good quality and consistent content to develop the skills of the entire insurance agent community to empower them. 

We plan to develop online training programs in vernacular languages as well, which would create entrepreneurial opportunities in tier 2 and tier 3 cities of India. 

We are well-funded to achieve our milestones.

What’s your take on the “new age ULIP’s”? Are they worth considering?
The so-called “new age ULIPs” or NULIPs, as they are coined, is definitely better than their older counterparts. This is because, along with the benefits or flexibility in terms of switch options, partial withdrawal, etc. NULIPs have much lower charges than before. Even the flexibilities are higher and the charges for these flexibilities are almost zero in some cases. 

NULIPs have the tax advantage over mutual funds, as before and hence is considered to be quite powerful. With an EEE tax benefit and no STCG or LTCG tax implication, they are surely worth considering to be a part of one’s healthy financial portfolio.

Is the insure-tech space getting overcrowded? Do you see consolidation or exits lying ahead?
The insure-tech space has a LONG way to go. The Insurance penetration in India is a meagre 3.69% in 2016-17 as per the IRDAI and the tech space has just taken its baby steps. There is a huge opportunity for insurance sector per se. Insure-tech companies are enabling insurance as a product to reach out to citizens of India. 

It's exciting to see a lot of new players attack different problems in this space from the creation of new micro or event-based insurance products, to digital underwriting & distribution models, and even claims processing. We are just at the start of this explosion in insurance innovation and it will take some time for the winners and losers to clearly emerge.  However, it will be an exciting time for consumers as they will get far superior products, friendlier payment terms, and faster claims processing.

Lastly, tell us about some of your achievements in fiscal ’19. What kind of premiums did you clock?
We have sold more than 7 lakhs policies in the fiscal year 2019 and our current annualized premium collection is Rs 800 crores.