There is big news for those buying insurance. Insurance regulator IRDAI recently notified 8 new rules. Under this, the charges to be levied on surrendering the policy will have to be declared in advance. Let us tell you what effect these rules will have on you?
There is big news for those buying insurance. Now the policy holder will not get much money on surrendering the policy. The Insurance Regulator of India (IRDA) has recently notified several rules related to the insurance sector. This also includes charges related to return or surrender of the insurance policy. In such a situation, let us tell you what effect the major changes in the insurance policy will have on you?
Actually, under IRDAI rules, insurance companies have to disclose the insurance surrender charges in advance. Under the IRDA (Insurance Products) Regulations, 2024, six rules have been combined into an integrated framework. Its objective is to enable insurance companies to respond quickly to emerging market demands, improve ease of doing business and promote insurance.
Tell us the surrender charge in advance
IRDAI said that these rules promote better functioning in product design and pricing. This includes strengthening the rules related to guaranteed value and special withdrawal value on policy surrender. It also ensures that insurers adopt concrete activities for effective monitoring and due diligence.
New rules will come into effect from April 1
These rules will come into effect from April 1, 2024. These stipulate that if the policy is returned or refunded within three years of purchase, the return value is likely to be the same or even less. It says that policies which are surrendered from the fourth to the seventh year may see a slight increase in their withdrawal value.
Return value in insurance refers to the amount paid by insurance companies to the policyholder if he terminates the policy before its maturity date. If the policyholder surrenders during the policy term, the earning and savings portion is paid to him.
Changes made in the interest of policyholders
IRDAI, in its meeting held on March 19, approved eight principle-based integrated rules after a comprehensive review of the regulatory framework for the insurance sector. These rules cover important areas such as protection of policyholders’ interests, rural and social sector responsibilities, registration with the electronic insurance market, insurance products and operation of overseas reinsurance branches, assessment of insurance risks and premiums, aspects of finance, investment and company operations. Are included.
IRDAI said in the statement, this is an important step in the regulatory system. In this, 34 rules have been changed with six rules. Also, two new rules have been brought for clarity in the regulatory scenario. It said that this step has been taken after extensive consultations with various stakeholders including the insurance industry, experts and the public.
Attention Insurance Customers! Policy surrender value formula changed, IRDAI released final rules
