Non-traditional products involved shift from traditional products in terms of

Solution(By Examveda Team)

As the limitations of traditional life insurance plans became obvious, a number of shifts occurred in the product profiles of life insurers. These have been summarised below:
(a) Unbundling: This trend involved separation of the protection and savings elements, and consequently the development of the products which stressed on protection of savings, rather than a vague mix of both.
(b) Investment linkage: The second trend was the shift towards investment linked products which linked benefits to policyholders with an index of investment performance. There was consequently a shift in the way life insurance was positioned.
(c) Transparency: Unbundling also ushered greater visibility in the rate of return and in the charges made by the companies for their services (like expenses, etc.). All these were explicitly spelt out and thus, could be compared.
(d) Non-standard products: The fourth major trend has a shift from rigid to flexible product structures which is also seen as a move towards non-standard products. When we speak of non-standard, it is with respect to the degree of choice which a customer can exercise with respect to designing the structure and benefits of the policy.