Life Insurance Policies: According to the master circular, the facility of partial withdrawal has been allowed under pension products. This will help policyholders to meet their specific financial needs for important life events such as higher education or marriage of children; purchase / construction of residential house / flat; medical expenses
Insurance regulator IRDAI has now made the facility of policy loan mandatory in all life insurance saving products. This means that it will help policyholders to meet cash related needs. IRDAI has today issued a master circular on June 12 consolidating all the regulations regarding life insurance policies. It states that the ‘free-look’ period is now 30 days. Earlier this period was 15 days. In the ‘free-look’ period, time is given to review the terms and conditions of the policy.
IRDA statement
The new master circular comes after a similar process done by the regulator for general insurance policies. IRDA said, “This is an important step in the series of reforms taken by the insurance regulator keeping in mind the interests of policyholders. Now a favorable environment is available to promote innovation, enhance customer experience and satisfaction.”
According to the master circular, the facility of partial withdrawal has been allowed under pension products. This will help policyholders to meet their specific financial needs for important life events such as higher education or marriage of children; purchase / construction of residential house / flat; medical expenses and treatment of critical illness.
There will be a strong system to resolve the complaints of policyholders
IRDA said that in case of closure of the policy… a reasonable and valuable amount should be ensured for both the policyholders who close it and the policyholders who continue it. Apart from this, the regulator said that there should be a strong system to resolve the complaints of policyholders.
The circular said, “If the insurer does not appeal against the decision of the Insurance Ombudsman and does not implement it within 30 days, the complainant will have to pay a penalty of Rs 5,000 per day.” Insurance companies were asked to put in place mechanisms to improve consistency, curb mis-selling and protect policyholders from financial losses and enhance long-term benefits for them.
