Free-Look Period

You have bought a new insurance policy and received the policy document and find that the terms and conditions are not what you wanted.
What do you do? Grin and bear it?
Not at all.
IRDA has built into its regulations a consumer-friendly provision that takes care this problem.
If you have bought a policy and realise you don’t want it you can return it and get a refund.
There are conditions though.

• This applies only to Life insurance policies and
• To Health insurance policy that are for a term of at least 3 years
• You can exercise this option within 15 days of receiving the policy document
• You have to communicate to the company in writing
• The premium refund will be adjusted for
  • proportionate risk premium for the period on cover
  • expenses incurred by the insurer on medical examination and
  • stamp duty charges

How To Make a Claim - Life Insurance

Formalities for a death claim
When a person with a life insurance policy – called a life assured – dies, a claim intimation should be sent to the insurance company as early as possible. The assignee or nominee under the policy can do this. So can any close relative or the agent who handles the policy.
The claim intimation should contain information like the date, place and cause of death. The insurance agent has the duty to help the life assured’s family/ assignee to deal with the insurance company to fulfil the formalities for a claim.
The insurance company will respond to this intimation and will ask for the following documents:

• Filled-up claim form (provided by the insurance company)
• Certificate of death
• Policy document
• Deeds of assignments/ re-assignments if any
• Legal evidence of title, if the policy is not assigned or nominated
• Form of discharge executed and witnessed

Other documents such as medical attendant's certificate, hospital certificate, employer's certificate, police inquest report, post mortem report etc could be called for, as applicable.
Formalities for a maturity claim
Where a life insurance policy is maturing, the insurance company will usually send intimation to the policyholder along with a discharge voucher at least two to three months in advance of the date of maturity giving details like the maturity amount payable.
The policyholder has to sign the discharge voucher – which is like a receipt – have his signature witnessed and send it back to the insurance company along with the original policy bond to enable it to make the payment.
If the policy has been assigned in favour of any other person or entity – like a housing loan company – the claim amount will be paid only to the assignee who will give the discharge.

How to buy life insurance and from whom

Insurance Intermediaries

• Insurance is a complex product representing a promise to compensate the insured or third party according to specified terms and conditions in the event of the occurrence of a covered contingency. In most insurance transactions there is usually an intermediary - an insurance agent (individual or corporate) or an insurance broker.
• Insurance intermediaries serve as a bridge between consumers (seeking to buy insurance policies) and insurance companies (seeking to sell those policies).
• Isurance brokers are licensed by the IRDA and governed by the Insurance Regulatory and Development Authority (Insurance Brokers) Regulations, 2002. Individual insurance agents and corporate agents are also licensed by the IRDA and governed by the Insurance Regulatory and Development Authority (licensing of Individual Insurance Agents) Regulations, 2000 and the Insurance Regulatory and Development Authority (Licensing of Corporate Agents) Regulations, 2002, respectively. These Regulations lay down the Code of Conduct for the respective intermediaries.
• An intermediary has a distinct role to play in the entire life cycle of a product, from the point of sale through policy servicing, up to claim servicing. An intermediary shall provide all material information with respect to a proposed cover to enable the prospect to decide on the best one. The intermediary is expected to advise the prospect with complete disclosures and transparency.. After the sale is effected, the intermediary must coordinate effectively between the customer and the insurer for policy servicing as well as claim servicing.
• IRDA has prescribed regulations for protecting the interests of policyholders casting obligations not only on Insurers but also Intermediaries. These prescribe obligations at the point of sale as well as policy servicing and claims servicing.

Unit Linked Insurance Policy (ULIP)

Unit Linked Insurance Policies (ULIPs) offer a combination of investment and protection and allow you the flexibility and choice on how your premiums are invested. . IN UNIT LINKED PLANS, THE INVESTMENT RISK PORTFOLIO IS BORNE BY YOU AS YOU ARE THE INVESTOR Typically, the policy will provide you with a choice of funds in which you may invest. You also have the flexibility to switch between different funds during the life of the policy. The value of a ULIP is linked to the prevailing value of units you have invested in the fund, which in turn depends on the fund's performance. In the event of death or permanent disability, the policy will provide the Sum Assured (to the extent you are covered) so that you can take comfort in knowing that your family is protected from sudden financial loss. A ULIP has varying degrees of risk and rewards. There are various charges applicable for Unit Linked Policies and the balance amount out of the premium is only invested in the fund/funds chosen by you.  It is important to ask your insurer or agent or broker questions to understand the sum total of charges that you have to incur. It is important to assess your risk appetite and investment horizon before deciding to buy a ULIP policy. You must also read the terms and conditions of the policy carefully to understand the features of the policy including the lock-in period, surrender value, surrender charges etc.

Why Buy Life Insurance

Life Insurance is a financial cover for a contingency linked with human life, like death, disability, accident, retirement etc. Human life is subject to risks of death and disability due to natural and accidental causes. When human life is lost or a person is disabled permanently or temporarily, there is loss of income to the household.

Though human life cannot be valued, a monetary sum could be determined based on the loss of income in future years. Hence, in life insurance, the Sum Assured ( or the amount guaranteed to be paid in the event of a loss) is by way of a ‘benefit’.  Life Insurance products provide a definite amount of money in case the life insured dies during the term of the policy or becomes disabled on account of an accident.

Why you should buy Life Insurance:
All of us face the following risks:
Dying too soon
Living too long

Life Insurance is needed :

• To ensure that your immediate family has some financial support in the event of your demise
• To finance your children’s education and other needs
• To have a savings plan for the future so that you have a constant source of income after retirement
• To ensure that you have extra income when your earnings are reduced due to serious illness or accident
• To provide for other financial contingencies and life style requirements

Who needs Life Insurance:
Primarily, anyone who has a family to support and is an income earner needs Life Insurance. In view of the economic value of their contribution to the family, housewives too need life insurance cover. Even children can be considered for life insurance in view of their future income potential being at risk.

How much Life Insurance is needed:
The amount of Life Insurance coverage you need will depend on many factors such as:

• How many dependents you have <="" li="">
• What kind of lifestyle you want to provide for your family
• How much you need for your children’s education
• What  your investment needs are
• What your affordability is

You should seek the help of an insurance agent or broker to understand your insurance needs and suggest the right type of cover

The Process

If your insurance company does not resolve your complaint to your satisfaction you can escalate your complaint to IRDA.

·  If your complaint is suitable for taking to the Insurance Ombudsman IRDA will help you resolve it by taking it up with the insurance company

·  For disputes where enquiry or adjudication are required you should approach the Consumer Forum or Courts.

The Process

Click here for IGMS

The Framework

IRDA’s regulations stipulate the Turnaround Times (TAT) for various services that an insurance company has to render to you, the consumer.
These are part of the IRDA Protection of Policyholders’ Interests (PPHI) Regulations 2002.
Insurance companies are also required to have an effective Grievance Redressal Mechanism and IRDA has created the guidelines for that too.

Here are the TATs for an insurance company to deal with various types of complaints

Guidelines for Grievance Redressal by Insurance Companies - Download PDF (474.5 Kb)
IRDA PPHI Amendment Regulations 2002 - Download PDF (152.3 Kb)
IRDA PPHI Regulations 2002 - English - Download PDF (1012.6 Kb)
IRDA PPHI Regulations 2002 - Hindi - Download PDF (2088 Kb)

How to make a complaint

If you are unhappy with your insurance company

• Approach the Grievance Redressal Officer of its branch or any other office that you deal with. Click here for contact details of Grievance Redressal Officers, GRO, of all insurance companies
• Give your complaint in writing along with the necessary support documents
• Take a written acknowledgement of your complaint with the date.

The insurance company should deal with your complaint within 15 days.

• If that does not happen or if you are unhappy with their solution you can:
• Approach the Grievance Redressal Cell of the Consumer Affairs Department of IRDA:
• Call Toll Free Number 155255 (or) 1800 4254 732 or
• Send an e-mail to complaints@irda.gov.in
• Make use of the Integrated Grievance Management System:
• Register and monitor your complaint at www.igms.irda.gov.in
• Send a letter or fax to IRDA with your complaint:
• Click here to download Complaint Registration Form
• Fill and send by post or courier to:
  Consumer Affairs Department
  Insurance Regulatory and Development Authority
  3-5-817/818, United India Towers, 9th Floor
  Hyderguda, Basheerbagh
  Hyderabad – 500 029
• Or Fax to
  040-66789768