IRDA has talked about making it mandatory to mention the free look period and nominee for issuing the policy. The regulator has prepared a draft and sought opinion from insurance companies on this.
There is a relief news for crores of customers taking life insurance. Insurance regulatory body Insurance Regulatory and Development Authority (IRDAI) on Wednesday proposed to increase the ‘free look’ period for withdrawing the policy from 15 days to 30 days and make nomination for life insurance policies mandatory.
At present, if an insured is not satisfied with the terms and conditions of the policy, he can withdraw from it within the ‘free look’ period of 15 days from the date of receipt of the policy document. Whereas in case of electronic policy this period is 30 days.
IRDAI has prepared a draft.
Insurance Regulatory and Development Authority of India (IRDAI) has issued a draft and proposed to integrate several provisions of various rules related to insurance. Regarding protecting the interests of policyholders, the draft says, ‘The free-look period for policies obtained through any means will be 30 days from the date of receipt of the policy document.’
What is free look period?
Actually, free look period is the period in which a customer can return the policy if he is not satisfied with the terms and conditions after purchasing the policy. Applicable only on life insurance policies or health insurance policies of at least 3 years.
Apart from this, IRDAI has also talked about making it mandatory to mention the nominee for issuing the policy in this draft. Accordingly, nomination provisions related to general insurance and health insurance policies have been introduced.
According to this draft proposal, the insurance company should collect details of the insured’s bank accounts at the proposal stage itself to enable electronic transfer of policy refunds and payment of insurance claims.
Along with this, IRDAI has also proposed to eliminate the need for insurance companies to give information about their advertisements to the regulator. The insurance regulator has invited comments on these proposals till March 4, 2024.
