Insurance regulatory agency IRDA is continuously implementing new rules regarding major changes in the insurance sector of the country.
The implementation of this proposal of IRDA is likely to have a significant adverse impact on the margins of companies. The reason is that right now there is no clear rule in this regard and customers have to depend on the wishes of the companies.
Insurance regulatory agency IRDA is continuously implementing new rules regarding major changes in the insurance sector of the country. In this sequence, a good news for the customers taking life insurance is that they can get more amount than before if they surrender the insurance policy prematurely. IRDA has prepared a proposal for new rules in this regard.
You will get good returns on surrendering the policy
According to the proposal, there will be a provision to give a fair return to the customers if they surrender the policy before the stipulated time. What this fair return will be will be determined based on many factors like how many years the policy was in operation, how much premium was paid etc. But it is certain that customers will get more money than what they currently get on returning these policies.
Margins of companies will be adversely affected
The implementation of this proposal of IRDA is likely to have a significant adverse impact on the margins of companies. The reason is that right now there is no clear rule in this regard and customers have to depend on the wishes of the companies. This is the reason why as soon as this information became public on Thursday, there was a downward trend in the shares of insurance companies in the stock market.
Non-linked insurance policies (policies that are linked to the stock market or other investment instruments) have lower returns and generally if the customer returns before their maturity period for some reason, the amount returned by the company is the principal amount. Is less than. Now the formula given by IRDAI can ensure that minimum loss is incurred by the customers. The most important thing is that arbitrary calculations by companies in this regard will be stopped.
Yes, additional premium amount will also be charged from customers for this facility. The Insurance Regulatory Agency has clearly stated that no insurance company can discriminate against its customers on the basis that it is returning their products. If the insurance products of the above category have been operated for seven years, then even if they are surrendered by the customers, at least 90 percent of the total premium paid will be refunded.
If any other benefit has been given to the customers as per the contract, then it can be deducted from this. Up to 50 percent of the total premium can be returned within four to seven years. Regarding single premium products, it has been said that there can be a provision to return up to 75 percent of the premium amount till the third year, and up to 90 percent of the premium amount after the fourth year.
