LIFE INSURANCE: Need-based cover
All life insurance companies will have to adopt a standard proposal form for a new business. The new form issued by the Insurance Regulatory and Development Authority (Irda) will contain four parts. The first section will contain mandatory details of the proposer like name, address, contact details and basic health details. In the second part, the proposer will have to submit a specialised health information like physical deformity, any accident requiring treatment, if absent from work for more than a week in last two years due to any illness, etc. The third section will be the suitability analysis like affordable contribution, span of work, income expenditure, financial details and the identified insurance needs. The final section will be product-proposed details like protection needs, life stage, details of commitment for the current and future needs, etc.
The agent will have to ensure that all the risk elements and details of charges are explained to the proposer. Irda says the objective of the standard proposal form for individual policies in life insurance is to ensure that it takes into consideration all the relevant questions that are required to understand the need for a particular product and make a recommendation to the prospect bringing in transparency and protect the prospects’ interest.
The new standard proposal, as of now, will apply to individual policies issued by life insurance companies, irrespective of the segment and type of the product. The obligations under the the new regulations will apply to insurers and intermediaries.
The regulator has made
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