The life insurance regulations permit the policyholder to cancel the policy within 15 days of receiving the policy document. This was, however, relevant on a physical copy of the policy report obtained through the insured. Now, the Insurance Regulatory and Development Authority of India (IRDAI) has allowed insurers to issue the policy report on e-mail and the insured can even get it cancelled within the free look period.
The Insurance Regulatory and Development Authority of India (IRDAI) states that in the wake of the rising scenario of Covid19 Global Pandemic and taking into account the feedback obtained from the Life Insurers expressing difficulties in printing and dispatch of policy report. The regulator has allowed an exemption from the requirement to issue policy report, copy of proposal form in physical form. This step to undertake digital ability of doing commercial enterprise is additionally in the interests of policyholders and other stakeholders. This exemption of sending digital insurance policies rather of the physical copy of the policy report will be valid for all insurance policies issued during Financial Year 2020-21.
The exemption is subject to the following rules:
1. Life Insurer confirming the date of receipt of digital policy report by the policyholder via PIVC or other means and maintaining the proof so that Free Look duration may also be calculated from that date.
2. 30 days Free Look duration may also be allowed for all such digital policy documents.
3. Return of digital policy report by mail through policyholder with clear intention of cancellation of policy will be legitimate for Free Look Cancellation.
4. Express consent of the policyholder to acquire digital policy bond is required. If policy holder insists on hard copy, the same has to be issued without any charges.
5. Policy report is to be sent to the e-mail identity submitted via the proposer.
If the insured has not made any declare during the free appear period, the insured shall be entitled to
1. A refund of the premium paid much less any costs incurred through the insurer on medical examination of the insured persons and the stamp obligation expenses.
2. Where the risk has already commenced and the choice of return of the policy is exercised through the policyholder, a deduction toward the proportionate risk premium for duration on cover.
3. Where only a section of the insurance coverage has commenced, such proportionate premium commensurate with the insurance coverage during such period.
4. In recognize of unit linked policy, in addition to the above deductions, the insurer shall additionally be entitled to repurchase the unit at the rate of the units as on the date of the return of the policy.