 "Life Insurance, Insurance")
Good news for policyholders! The Insurance Regulatory and Development Authority of India (Irdai) on Wednesday announced that all life insurance savings products must now include a policy loan option, helping policyholders meet their liquidity requirements.
“This is an important step in the series of reforms taken up by the insurance regulator with the interests of the policyholders at the core. A conducive environment is now facilitated to spur innovation, and enhance customer experience and satisfaction,” Irdai said.
Key takeaways
1. Extended free look period
The free look period, which allows policyholders to review the terms and conditions of their policy, has been extended from 15 days to 30 days. This gives more time to make informed decisions.
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2. Partial withdrawals for pension products
Policyholders can now make partial withdrawals under pension products to meet specific financial needs for significant life events, such as:
— Higher education or marriage of children
— Purchase or construction of a residential house/flat
— Medical expenses and treatment of critical illnesses
3. Reasonable surrender values
When surrendering policies, Irdai will ensure that the process is fair and provides value for money for both surrendering and continuing policyholders.
4. Grievance Redressal Systems
Insurers are required to have robust systems for addressing policyholder grievances. If an insurer does not appeal against the award of the insurance ombudsman and fails to implement it within 30 days, they will incur a penalty of Rs 5,000 per day payable to the complainant.
5. Enhancing persistency and preventing mis-selling
Insurance companies must implement mechanisms to improve policy persistency, curb mis-selling, and avoid financial losses to policyholders. This also aims to enhance long-term benefits for policyholders.
