The Year 2020 – Insurance: Ironing out the kinks in the insurance armour

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December 30, 2020 3:00 AM

From standardisation of insurance products to digitisation of onboarding policyholders, Irdai has made it easier to select and purchase the right insurance product

The insurance regulator had allowed all life insurance companies to get customer’s consent without requiring a wet signature on the hard copy of the proposal form.The insurance regulator had allowed all life insurance companies to get customer’s consent without requiring a wet signature on the hard copy of the proposal form.

The Covid-19 pandemic has led to faster digitisation of the insurance industry; the insurance regulator has come out with standard products and individuals are buying comprehensive health insurance policies and protection plans.

Standardisation of products
All general and standalone health insurance companies launched a standard health insurance policy known as Arogya Sanjeevani. The policy provides a basic health cover of Rs 1 lakh to Rs 5 lakh and there are no deductibles. The policy covers hospitalisation expenses such as room, boarding and nursing at 2% of the sum insured, maximum up to Rs 5,000 each day. It also covers fees of doctors, surgeons, anaesthetists, etc. For intensive care units, the expenses will be 5% of the sum insured up to Rs 10,000 a day. Even pre-hospitalisation medical expenses 30 days prior to the date of hospitalisation will be admissible.

General and standalone health insurers launched Corona Kavach, an indemnity health insurance policy which covers hospitalisation and home care treatment expenses in case the policyholder is tested positive of Covid-19 infection. The tenure is of 3.5 months, 6.5 months and 9.5 months. Insurers also launched Corona Rakshak, a single premium policy which pays 100% of the sum insured as lumpsum in case the policyholder tests Covid-19 positive that requires hospitalisation of 72 hours or more.

Non-life insurers will soon launch a standard health insurance policy for vector-borne diseases such as dengue, malaria, filaria, chikungunya, etc. The minimum sum assured will be Rs 10,000 and maximum will be Rs 2 lakh. The policy will have a fixed term of one year with a waiting period of 15 days and can be renewed.

The insurance regulator has issued guidelines for standard individual term life insurance policy Saral Jeevan Bima. All life insurance companies will have to mandatorily offer this policy from January next year. Saral Jeevan Bima will be a non-linked non-participating individual pure risk premium life insurance plan which will pay the sum assured in lump sum to the nominee in case of the life assured’s death during the policy term. The minimum entry age will be 18 years and the maximum age 65 years. The policy term will be 5-40 years and the maximum maturity age 70 years. The minimum sum assured will be Rs 5 lakh and the maximum will be Rs 25 lakh.

From April next year, general and standalone health insurance companies will offer a standard personal accident cover. The standard product will have a basic mandatory cover, the minimum sum insured will be Rs 2.5 lakh and the maximum Rs 1 crore. The death benefit will be equal to 100% of the sum insured and will be paid on death of the insured person due to an injury sustained in an accident during the policy period. For permanent total disablement, the benefit will be 100% of the sum insured.

Digitisation of onboarding
In order to make the compliance processes of onboarding easier and reduce the paperwork, the insurance regulator has asked all insurance companies to use video-based identification process (VBIP) for doing know your customer (KYC) process. The authorised person of the insurance company doing the VBIP for KYC will have to record the video and take photographs of the customer present for identification and obtain the identification information through Aadhaar. The live location of the customer or geotagging will be captured to ensure that the customer is physically present in India.

The insurance regulator had allowed all life insurance companies to get customer’s consent without requiring a wet signature on the hard copy of the proposal form. The completed proposal form can be sent to the customer’s registered e-mail ID or mobile number in the form of an e-mail or a message with a link. If the prospective customer wishes to consent, then he can click the confirmation link or validate the one-time password. Insurers can issue electronic or e-policies to the customers on their e-mail IDs during the current financial year to address the difficulties faced by the companies in printing and dispatch of policy documents.

For the benefit of policyholders, health insurance companies will have to offer reward points to policyholders who maintain good health and regularly take part in various wellness and fitness programmes. The rewards could be redeemable vouchers for health supplements, membership in yoga centers, gymnasiums, sports clubs or fitness centers.

Also, to address mis-selling of indemnity-based health insurance policies and increasing out-of-pocket expenses incurred by policyholders during treatment, the insurance regulator had directed all insurers to standardise the terms for all policies they underwrite. It has also directed them to include telemedicine as part of claim settlement of policy.

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