The Insurance Regulatory and Development Authority of India (IRDAI) on Wednesday issued a master circular regarding life insurance. The circular states that the facility of policy loan is now mandatory for all life insurance saving products.
The Insurance Regulatory and Development Authority of India (IRDAI) has issued a master circular regarding life insurance. The circular states that the facility of policy loan is now mandatory for all life insurance saving products. This means that now policy holders will get help in meeting their cash related requirements. Apart from this, IRDAI said that the free look period for all policy holders to review the terms and conditions has been increased from 15 days to 30 days.
IRDAI’s new master circular is an important step in the series of reforms taken by the insurance regulator keeping in mind the interests of the policyholders. Now it is conducive to promoting innovation, enhancing customer experience and satisfaction. According to the master circular, the insurance regulator has taken this step to make life insurance simple and easy to understand for the people.
Facility of partial withdrawal also
Partial withdrawal facility has been provided under pension products, which will help policyholders to meet their financial needs for important life events such as higher education or marriage of children, purchase/construction of residential house/flat, medical expenses and treatment of critical illness. As per the new guidelines, life insurance companies are required to provide riders to provide wider options to policy holders.
Strong system for resolving complaints
IRDA said that in case of closure of the policy, there should be a special system for both the policyholders who discontinue the policy and the policyholders who continue the policy, under which the policyholders can get a fixed amount. Apart from this, the regulator said that there should be a strong system for resolving the complaints of policyholders.
Penalty of Rs 5000
The circular said that if the insurer does not appeal against the decision of the Insurance Ombudsman and does not implement it within 30 days, then the complainant will have to pay a penalty of Rs 5000 every day. Insurance companies were asked to establish a system to improve continuity, curb mis-selling and protect policyholders from financial loss and increase long term benefits for them.
