In a progressive move towards making life insurance simple, easy to understand, enhance transparency for a well-informed decision by a prospect/policyholder, the Insurance Regulatory and Development Authority of India (IRDAI) has issued a Master Circular on the life insurance business. The key highlights of the circular are as follows:
- Customer Information Sheet (CIS) has been introduced which provides policy-related information in simple and easily understandable language, explaining various policy benefits and terms and conditions so that the policyholders can find a snapshot of the policy in one place.
- Facility of policy loan is now mandatory in all life insurance savings products enabling policyholders to meet liquidity requirements.
- Health riders for covering health-related contingencies/emergencies without recourse to surrendering the policies is possible.
- Facility of partial withdrawal under pension products is now allowed enabling the policyholders to meet their specific financial needs for important life events like higher education or marriage of children; purchase/construction of the residential house/flat; medical expenses, and treatment of critical illness.
- In case of surrenders, reasonableness and value for money to be ensured for both surrendering policyholders and continuing policyholders.
- Free look period which provides time to review the policy terms and conditions is enhanced to 30 days from 15 days.
- Robust systems to be in place for Grievance Redressal.
Please refer to the full text of the Master Circular on the IRDAI website at (https://irdai.gov.in/web/guest/document-detail?documentId=5032913).
