surrender value of any subsisting bonus.
For pension products, companies will have to offer insurance cover throughout the deferment period or offer riders. The sum of all rider premiums attached to the pension product cannot exceed 15% of the premium paid for the pension policy. Such rider premiums will be separately accounted for and cannot be included in arriving at the assured benefit.
To revive a discontinued policy, the insurer will collect all due and unpaid premiums without charging any interest or fee. However, the insurer can levy policy administration and premium allocation charges and any guarantee charge, if such a guarantee is reinstated.
For policies that have not completed two years of revival period at the end of the lock-in, the insurer will have to take written consent from the policyholder to revive the policy immediately or within the two-year period.
Anup Rau, chief executive officer of Reliance Life Insurance, says the new guidelines will serve the long-term purpose of life insurance protection and fulfillment of long-term goals. “The new guidelines will promote need-based selling and higher life insurance cover, offer better surrender values and improved disclosures and provide simpler and more customer-friendly insurance plans,” he says.
Health insurance: Some modifications
The insurance regulator has done some modification to the new regulations on health insurance issued in February. Under the revised guidelines, all new individual health insurance policies, except those with a tenure of less than a year, will have a free-look period and this will be applicable at the inception of the policy. Also, cumulative bonus will not be allowed on benefit-based policies with the exception of personal accident cover.
Irda has also clarified that health insurance providers will have to provide coverage to non-allopathic treatments. But to avail of the cover, the policyholder will have to get the treatment done in a government hospital or in any institute recognised by the government or any accredited institute by the Quality Council of India or the National Accredition Board on Health.
The revised guidelines, which were issued in response to representations by the industry to the regulator, will be applicable with immediate effect.
What the guidelines say
* All new insurance products will be divided into three broad categories — traditional, variable and unit-linked plans
* Insurers will have to withdraw all existing products and come out with new ones
* However, they will continue to renew old policies where the contract had already been made