The Insurance Regulatory and Development Authority (IRDA) today allowed insurance companies to offer 'Health plus Life Combi Product', a policy that would provide life cover along with health insurance to subscribers.
Under the guidelines issued by the IRDA, the life and non-life insurance firms can come together to offer health-plus-life cover.
"It is envisaged that the proposed product class will enhance the penetration of personal lines of insurance business with a wider product choice to policyholders," it said while issuing the guidelines.
Under the existing structure, non-life insurers do not provide pure life insurance products.
The IRDA notified the guidelines following representations by the insurance companies for an "umbrella of a single product" to give more choice to a policy subscriber.
The guidelines added that it would be mandatory for life and non-life insurance companies to enter into agreements before offering the new product to subscriber.
"The combo products do help the policyholders and Would help in increase the penetration of health insurance in the country," said Life Insurance Council secretary general S B Mathur.
IRDA further said the combi products may be promoted by all Life Insurance and non-Life insurance companies.
"A tie up is permitted between one life insurer and one non-life insurer only. Thus, a life insurer is permitted to tie up with only one non-life insurer and vice-versa," IRDA said.
The regulator further said between these two insurers any number of combi products may be promoted.
Insurers forming the tie-up shall obtain prior IRDA approval by duly filing the copy of the agreement entered in this regard.
The insurance regulator said the product may be offered both as individual policy and on group insurance basis and would have a free look option as outlined in the regulation.
The sale of the combi products can be made through direct marketing channels, brokers and composite individual and corporate agents, common to both insurers.
However, these products are not allowed to be marketed through 'bank referral' arrangements, IRDA said.
The regulator further said the guidelines do not apply to micro insurance products which are governed by IRDA (Micro Insurance) Regulations, 2005.
