NEW DELHI: Have you been confused while opting to make a personal accident insurance claim? Well, India’s insurance sector regulator last week proposed a standard personal accident insurance product to get settle this confusion. The Insurance regulator Insurance Regulatory and Development Authority of India (IRDAI) has uploaded a draft of this proposal and has sought comments from stakeholders by December 18. According to the draft, this standard product should have basic mandatory covers offering protection against death, permanent disablement, or partial disablement due to accidents.
The standard product will need to be offered with a policy term of one year and also cover expenses towards hospitalisation. The IRDAI’s proposal place the minimum sum insured at Rs 2.5 lakh and a maximum sum insured at Rs 1 crore. Beyond that, however, insurers can also offer such products on their own and can use the same name for the product if all terms and conditions remain the same, IRDAI said.
Regarding basic covers, the IRDAI has proposed that benefit equal to 100 per cent of sum insured shall be payable on death of the insured person due to an injury sustained in an accident during the policy period, provided that the insured person’s death occurs within 12 months from the date of the accident. Also, the sum insured should be increased by five per cent for each claim-free policy year-provided that the policy is renewed without a break-subject to maximum of 50 per cent of the sum insured.
If a claim is made in any particular year, the cumulative bonus accrued may be reduced at the same rate at which it has accrued. Since the regulator is aiming to launch the product by April 1, it has informed all insurance companies that it will make it mandatory to sell the product.“Every general and standalone health insurer, who has been issued a certificate of registration to transact general and/or health insurance business, shall mandatorily offer this product,” said the draft guidelines issued by the IRDAI.
All the stakeholders are expected to give their suggestions and feedback by December 18, after which the IRDAI will come up with final policy guidelines. The IRDAI had initiated a similar move to standardize health and term insurance policies earlier.