Life insurance: Customer-friendly norms, better products in 2019


  • Surrender, annuity norms
    All protection-oriented non-linked products will have guaranteed surrender value. If the premium has been paid for two consecutive years, the policy will acquire a guaranteed surrender value.
  • Faster claims process
    IRDAI has issued a circular asking insurers to give policyholders an option to receive payment of claims in instalments under certain policies such as personal accident and benefit-based health insurance covers.
  • Plain-vanilla policies
    The regulator has issued a master circular for point of sales products and persons for life insurance. (POSP-LI). The products will be plain-vanilla life insurance policies where each benefit is predefined and disclosed upfront at the time of sale and is easy to understand.
  • Regulatory sandbox
    In order to experiment with innovative approaches including fintech solutions, IRDAI has created a regulatory sandbox. It will provide flexibility in dealing with regulatory requirements and focus on the core issue of policyholder protection.

Here’s how your insurance policy will look like in 2020


  • Lower depreciation for motor-own damage segment and driving-based cover
    IRDAI has now proposed that in case of private cars, there will be no depreciation for the first three years. So, the sum-insured will be the listed price of the vehicle. For two-wheelers, the sum-insured may be 95 percent of the vehicle’s listed price up to six months of the purchase.
    IRDAI has said that it is perceived that linking insurance premiums to traflc violations committed by an individual could reduce road accidents and change driver behaviour.
  • Quicker settlement of insurance claims
    Soon, motor insurance claims of up to Rs 75,000 will not require any assessment of losses by a surveyor.
  • Flexible health and fitness benefits
    Standard health insurance products could now offer a 5 percent increase in the cover for each claim-free policy period. The IRDAI has proposed that the sum insured under a standard policy can be raised every year, provided the policy is continuously renewed without a break.
    In another related regulation, the IRDAI has proposed to allow fitness related discounts. The insurance regulator has floated a draft proposal that will allow insurers to give premium discounts in health insurance for those living a fit lifestyle.

Source: Money Control, Financial Express

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