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Tag: IRDAI

  • IRDAI Introduces Higher Surrender Payouts On Early Exit From Life Insurance Policies | Personal Finance News

    New Delhi: If you have an insurance policy, the Insurance Regulatory and Development Authority of India (IRDAI) brings great news for you. If you decide to exit your life insurance policy early then you’ll receive more money back. In an effort to benefit policyholders, the IRDAI has mandated a higher special surrender value (SSV) for traditional endowment policies.

    This means that even if you choose to exit your policy after just one year, you’ll get a portion of your premium refunded. This change comes after extensive discussions and proposals, ensuring that policyholders are better protected and receive fairer returns when they surrender their policies early. (Also Read: Petrol, Diesel Price Hike: Karnataka Government Raises Fuel Rates By Rs 3 Per Litre)

    “While we anticipate a gross impact of approximately 100 bps on the company’s new business margin (NBM) due to higher surrender value on early exits, we are confident in our ability to largely mitigate this impact without compromising the value proposition for our customers,” an HDFC Life spokesperson said Moneycontrol. “We expect these measures to positively impact the long-term growth prospects for the industry.” (Also Read: SBI Customers, ALERT! Your Home Loan, Personal Loan EMIs To Go Up As Bank Raises Lending Rates By 10 Basis Points)

    “Given that substantial number of policyholders surrender their policies in early years, this regulation would immensely benefit those policyholders in particular,” An anonymous source from a private life insurance company told Moneycontrol. “The increase will also be applicable to surrender in latter years, albeit the quantum of such increase will be comparatively lower.”

    The IRDAI has announced that the special surrender value (SSV) should be at least equal to the present value of the paid-up sum assured and any future benefits, such as regular income payouts. Previously, life insurers opposed this move and argued that these products are designed for long-term goals and not for providing liquidity, according to Moneycontrol.

    “Reserving will have to go up and more capital will be required,”The CEO of a leading private life insurance company told Moneycontrol. The CEO further added “The upfront charges are high and it is difficult to recoup the commissions paid in the initial years,”.

    Further, the insurance regulator now requires life insurers to provide a Customer Information Sheet (CIS) to customers which is similar to what health and general insurers do. This sheet will clearly explain clauses, policy benefits, premiums, and terms and conditions in simple and concise language.

    The IRDAI also allowed insurers to design a variety of new products, including index-linked plans and variable annuity payout options. The regulator introduced stricter penalties for insurers regarding customer grievances.

  • No Insurance Claim To Be Rejected For Lack Of Documents: IRDAI | Personal Finance News

    New Delhi: Insurance Regulatory and Development Authority of India (IRDAI) has released a master circular that shall apply to every single existing general insurance product and every add-on cover.

    The IRDAI Circular issued on 11 June added that no claim shall be rejected for want of documents. All the required documents shall be called at the time of underwriting the proposal. The customer may be asked to submit only those documents that are directly related to the claim settlement such as claim form, driving license, permit, fitness, FIR, un-traced report, fire brigade report, post mortem report, books of accounts, stock register, wage register, repair bills (only in cases where cashless is not available), wherever applicable.

    The circular on IRDAI (Insurance Products) Regulations 2024 –General Insurance that replaces all earlier Guidelines/circulars of General Insurance Products, is applicable immediately.

  • Good News For Senior citizens: Health Insurance Now Available For Individuals Over 65 | Personal Finance News

    New Delhi: Starting from April 1, 2024, The Insurance Regulatory and Development Authority of India (IRDAI) has removed the age cap on health insurance policies, ANI reported. Previously, the purchase of new insurance policies was limited to the age of 65. But after the recent changes which came into effect from April 1, 2024 individuals of any age can now purchase new health insurance policies.

    “Insurers shall ensure that they offer health insurance products to cater to all age groups. Insurers may design products specifically for senior citizens, students, children, maternity, and any other group as specified by the Competent Authority” stated a notification issued by the IRDAI. (Also Read: How Much Return Will You Get By Investing In SBI’s FDs? Check Here)

    IRDAI has also directed health insurance providers to offer customized policies for specific groups like senior citizens and set up dedicated channels to address their claims and concerns. (Also Read: ICICI Bank Revises Service Charges For Savings Accounts: Check New Rates And Effective Date)

    “It’s a welcome change since it now opens Avenue for people above 65 to seek health cover. Insurers based on their Board approved Underwriting guidelines can cover people above 65. The coverage is subject to offer and acceptance between the Insured and Insurer based on affordability for the senior citizens and viability for Insurers.” according to an expert in the industry.

    The insurers after the recent notification have been restricted from denying to issue policies to individuals who are suffering with severe medical conditions such as cancer, AIDS, renal or heart failure.

    As per the notification, IRDAI has reduced the waiting period of health insurance from 48 months to 36 months. All pre-existing conditions must be covered after a 26 month period regardless of whether the policyholder disclosed them initially or not, according to the insurance regulator.

    Insurance companies are prohibited from offering indemnity-based health policies which cover hospital expenses. They are only allowed to offer benefit-based policies instead of indemnity-based health policies. This will provide fixed costs when a covered disease occurs.

  • New Insurance Policies To Go Digital From April 1: Here’s All You Need To Know | Personal Finance News

    New Delhi: Many changes will take place along with the kickstart of the new financial year. One of them is changes in new insurance policy. Starting April 1, 2024, purchasing insurance will undergo a digital transformation as insurers are now mandated to issue policies solely in digital form.

    This move, in line with the Insurance Regulatory and Development Authority of India’s (IRDAI) Protection of Policyholders’ Interests regulations, aims to streamline insurance processes and enhance policyholder convenience. (Also Read: New Tax Rules From April 1: Did You Know About Basic Exemption Limit? Check Here)

    What Is E-Insurance Accounts?

    E-insurance accounts involve the issuance and holding of policies in digital format. While many private insurers already offer e-insurance accounts, policyholders now have the option to purchase and manage their policies digitally through designated insurance repositories. (Also Read: 5 Financial Changes Coming In April 2024: Here’s All You Need To Know)

    What New It Brings?

    With the implementation of the new regulations, insurance companies are obligated to issue policies exclusively in electronic format. IRDAI’s final regulations stipulate that insurers must issue all policies digitally, regardless of whether the proposal is submitted electronically or through other means.

    Is There An Option For Physical Policies?

    Despite the shift towards digital issuance, policyholders still have the choice to hold their policies in physical form. They can opt for physical copies while filling out proposal forms for insurance purchases, ensuring flexibility for those who prefer traditional documentation.

    How One Can Purchase An E-Insurance Account?

    Opening an e-insurance account is a straightforward process and can be done at the time of purchasing a new policy. Additionally, existing physical insurance policies can be converted into electronic form, enabling policyholders to manage all their policies digitally.

    What Is The Cost Of Switching To E-Insurance Account?

    The transition to digital insurance comes at no additional cost to policyholders. Opening an e-insurance account is free of charge, offering a cost-effective and convenient way to access and manage insurance policies.