Irda is the Insurance Regulatory Development Authority of India. The circular released by Irda provides the policyholder as well as the prospective policyholder all the information regarding the amounts deducted for various charges for each policy year so that the insured is well informed or the prospective policyholder is able to make an informed decision. This is an attempt to standardize the disclosures which would lead to greater transparency and build customer confidence in the industry.
These provisions are applicable to all unit linked products (existing and new) with effect from 1st February 2009.
Following are the list of provisions to be ensured by the insurers:
- Life Insurance Companies have to conform to the proposed format (attached below) which will provide complete details of the charges to be paid and amount that will be available for investment each policy year.
- Information specific to the particular policyholder should be used.
- Insurers need to give figures about the guaranteed benefits as well as non-guaranteed benefits for each year with regards to interest rates by the Life Insurance Council’s circular. Currently, interest rates used for benefit illustration are 6% and 10%. (The table attached below is used).
- The policyholder has to sign the tables with person selling on the day when he/she signs the proposal form. The tables will be part of the policy document and thus a copy has to be sent to the holder along with the policy document.
PS: Information obtained from IRDA site.
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Tags: IRDA