Key Insurance Rights You Should Know Before Buying a Policy

CIS: A key document for policyholders | The Customer Information Sheet (CIS) plays a vital role in ensuring transparency for policyholders. It provides a summary of the policy’s key features, benefits, exclusions and important information such as the free look period and claims procedure. IRDAI mandates that the CIS for life insurance policies should conform to the format specified in ‘Schedule D’ of the Insurance Act to ensure uniformity across insurers.

No premium deposit requirement | Under the new guidelines, policyholders are not required to pay a premium deposit along with the proposal form. However, an exception applies to policies where the risk coverage starts immediately after receipt of the premium.

Electronic insurance and document delivery | All insurance policies will now be issued in electronic format, with digital signatures acceptable. Customers can request physical copies if they prefer, giving them flexibility in managing their insurance documents. For life insurance policies, insurers must issue the policy within 15 days of accepting the proposal form. Along with the policy document, policyholders will receive several key documents, including a cover letter explaining the free trial period, a copy of the submitted proposal form, and an illustration of the benefits.

Scope of the free consultation period | IRDAI has emphasized a 30-day free look period for life and health insurance policies. During this time, you can review the terms and conditions of the policy and decide whether you want to continue with the policy or request changes. This period allows policyholders to reconsider their decision if they are not completely satisfied with the terms of the policy.

Deadlines for settling life insurance claims | IRDAI has laid down specific time limits for life insurance claims. Death claims, where no investigation is required, are required to be settled within 15 days of the claim being filed. In cases requiring investigation, the claim is required to be settled within 45 days.

Requests for partial surrender or withdrawal must be resolved within seven days, and benefits such as maturity, survivorship, annuity payments and income must be provided on the due date. In cases where claims are delayed beyond the stipulated time limits, the claimant is entitled to receive interest at the bank rate plus 2% from the date of notification to the date of payment. Insurers are required to pay this interest along with the claim amount automatically.

Faster, cashless health insurance claims | For health policyholders, the new guidelines streamline the cashless claims process. Insurers must decide on requests for cashless authorisation within one hour of receipt, and final authorisation for discharge must be granted within three hours of the hospital’s request. The insured should not have to wait for discharge due to delays in processing the claim. In cases where a delay occurs, the insurer will bear the additional hospital costs. In unfortunate situations where the insured dies during treatment, insurers are obliged to process the claim immediately and ensure that the body of the deceased is released without delay.

Customer Service and Complaint Resolution | The new guidelines place particular emphasis on customer service and complaints resolution. The CIS must include clear instructions on how policyholders can lodge complaints, along with the contact details of the Insurance Ombudsman. This ensures that policyholders can easily seek a solution in the event of a dispute.