Irdai said the free look period, which provides time to review the policy terms and conditions, is 30 days as against 15 days earlier.
The insurance regulator IRDAI announced on Wednesday that all life insurance savings products must now include a policy loan option, allowing policyholders to access liquidity when needed.
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In a master circular consolidating all regulations related to life insurance policies, the Insurance Regulatory and Development Authority of India (IRDAI) announced that the free look period, allowing policyholders to review the terms and conditions, has been extended from 15 days to 30 days.
The latest master circular follows a similar exercise by the regulator for general insurance policies.
“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.
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According to the master circular, the facility of partial withdrawal under pension products is allowed enabling the policyholders to meet their specific financial needs for important life events like higher education or marriage of children; purchase/ construction of residential house/flat; medical expenses, and treatment of critical illness.
In case of surrender of policies, reasonableness and value for money is to be ensured for both surrendering policyholders and continuing policyholders, IRDAI said.
Further, the regulator said robust systems should be in place for the grievance redressal of policyholders.
“In case the insurer does not appeal against the award of insurance ombudsman and does not implement the same within 30 days, a penalty of Rs 5,000 per day shall be payable to the complainant,” the circular said.
Insurance companies have also been asked to put in place mechanisms to improve persistence, curb mis-selling and avoid financial loss to the policyholders and enhance long-term benefits to them.
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General Insurance Companies Can’t Reject Claims for Want of Documents
General insurance companies cannot reject claims for want of documents, IRDAI said on Tuesday.
The comprehensive master circular on general insurance business also repeals 13 circulars.
IRDAI said the provision of easy-to-understand insurance products tailored to meet the individual needs of the customers, providing them with ample choices and enhancing their insurance experience has now been enabled.
“No claim shall be rejected for want of documents. Required documents are to be called at the time of underwriting the proposal. The customer may be asked to submit only those documents necessary and related to claim settlement (if cashless is not available),” the circular said.
Further, retail customers can cancel the policy anytime by informing the insurer. The insurer can cancel the policy only on grounds of established fraud.
The insurer should refund a proportionate premium for the unexpired policy period on cancellation, the circular said.
IRDAI has also provided strict timelines for the settlement of claims, including for the appointment of surveyors and submission of their reports.
(With PTI inputs)
