Buying life insurance becomes simpler and easier – thanks to IRDAI.
As on one side, Covid-19 has put almost all industries into distress situations; on the other hand, the pandemic has pushed digitisation in a massive way across all sectors. Similarly, in the insurance sector, the Insurance Regulatory and Development Authority of India (IRDAI) has introduced several initiatives to ensure seamless selling and buying life insurance along with claim settlement. And one such measure that the apex body has rolled out recently is issuing and cancelling of life insurance policy online or even settling claim online. Keeping in mind the new normalcy of social distancing and no physical touch, IRDAI has taken this step to solve the problem of printing and dispatching the policy documents in its physical form. So, let’s understand what the new initiatives mean.
E-approval of proposal forms
IRDAI stated in its circular that issuing life insurance policies, including term insurances in the traditional way through agents and other intermediaries, has become difficult due to Covid-19. Filling up the form physically, obtaining signatures on them and then dispatching or moving the papers physically has been affected. Due to Covid-19 pandemic, meeting with people person to person is not normal anymore, and thus customers are quite apprehensive in meeting anyone in person. While the applicant details can be taken through phone or video call, but getting a signature is a challenge.
Therefore, to solve all such issues, insurance providers suggested having a digital system to validate the details through one-time password (OTP) or by sending a verification link to the customer which can be used in place of wet signatures.
The apex body has now allowed the insurers to issue insurance policies digitally without getting signatures on the hard copy of the forms. Insurers need to send the complete set of proposal form on the registered email id of the applicant or mobile number in the form of an email or a link. The applicant then needs to consent by clicking the link to confirm the OTP shared. Insurers need to develop a mechanism to share the link or generate the OTP. The regulator has further instructed the insurance providers to maintain certifiable and legally valid evidence for the consent of the proposer received on the proposal form.
The insurers are also not allowed to accept any payment until the applicant has given his or her consent. Usually, customers give cheque along with the filled proposal form, but now they don’t need to pay the premium until they have given their consent. The regulator also stated that the insurers would be responsible for carrying out the calls for pre-issuance of the policy for all prospects and ensure the suitability of the product. IRDAI has permitted this move on an experimental basis till December 31.
As per IRDAI, the insurance providers are facing difficulties to print and dispatch policy documents, making way for the digital mediums to do business in the life insurance industry. In 2016, IRDAI stated that if the policies are solicited using an electronic mode, then the insurers need to send the policy electronically and also to dispatch a hard copy was made necessary. But now insurance providers can email the life insurance policy documents.
Earlier due to pandemic, the insurers were not able to send the policy documents on time, which resulted in the extension of the 15-day-free look period. However, the free look up period has now extended to 30 days starting from the date of receipt of the electronic policy. Additionally, the customers now can even return the policy electronically wherein they just need to write an email instead of returning the policy agreement through courier or in person.
What does it mean for you?
It refers to that insurers are not mandated to send the policy documents physically anymore once they have the policyholder’s consent. In case the policyholder demands a hard copy, then the insurer will have to issue without any charges. Opting for digital methods means a reduction in the operational cost for processing the policy and saving a lot of time. This will also increase transparency as the customers, and the insurers can directly get in touch with each other. Insurance providers are in the view that this simplification of the process might encourage more people to buy life insurance.
Going the digital way is indeed the need of the hour as digital is the new mode to adapt the new normal. With the help of digitisation, you can easily access your important policy documents, buy life insurance, or even cancel the policy online from anywhere at any time. BimaKaro.in is one such digitally-driven platform which offers a variety of services starting from free policy quotes, comparing policy, and buying a term plan online. Visit BimaKaro.in today to know more about the platform and also for all your insurance queries.