The Insurance Regulatory and Development Authority of India (IRDAI) has released a master circular to help policyholders better understand their rights.
Many people have life and health insurance policies but often don’t fully grasp the terms and conditions, leading to issues when they need to use these policies.
Here’s what you should know from the circular:
1. 30-Day Free-Look Period
Life insurance companies are required to provide a 30-day free-look period. During this time, policyholders can thoroughly review the policy terms and conditions.
If they are not satisfied, they have the right to cancel the policy.
Previously, this period was only 15 days, but now it’s extended to ensure policyholders have ample time to make informed decisions.
2. Death Claim Settlement Timeline
If a policyholder passes away, it’s crucial to know how long the insurance company can take to settle the death claim.
For cases where no investigation is needed, the claim must be settled within 15 days after the process begins.
If an investigation is required, the company still has to settle within 15 days of starting the process.
3. Interest on Delayed Claim Settlement
If a policyholder wants to surrender a policy or withdraw money, the insurance company must complete the process within 7 days of the request.
Similarly, payments for maturity or survival benefits should be made on the due date.
If there’s a delay, the insurance company must pay interest at the bank rate plus 2% for the delay period.
4. Nomination Requirement
When purchasing an insurance policy, it’s mandatory to nominate someone who will receive the insurance cover amount in case of the policyholder’s death.
The policyholder can nominate one or more persons and even specify how much of the sum assured each nominee will receive.
5. Health Insurance Claim Settlement
For health insurance, if a cashless authorization request is made, the insurance company must approve it within one hour.
If a patient is being discharged from the hospital, the company must approve the request within three hours.
The master circular emphasizes that patients should not have to wait for discharge due to delays in authorization from the insurance company.
