Free-look period in insurance products increased to 30 days

These circulars are part of the IRDAI’s larger objective of insurance reforms.
IRDAI introduces new corporate governance regulations for insurers
IRDAI introduces new corporate governance regulations for insurers

NEW DELHI: The Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory for life insurance savings products to have option of loan against the policy in order to allow policyholders to meet liquidity requirements.

In a circular for life insurance policies issued on Wednesday, the regulator has raised the free-look period, which provides time to review policy terms and conditions, from 15 days to 30 days.

As per the master circular, the facility of partial withdrawal under pension products is now allowed enabling policyholders to meet their specific financial needs for important life events like higher education or marriage of children, etc. On the issue of surrender value, the circular says that in case of surrenders, reasonableness and value for money should be ensured for both surrendering policyholders and continuing policyholders.

These circulars are part of the IRDAI’s larger objective of insurance reforms. “A conducive environment is now facilitated to spur innovation, enhance customer experience and satisfaction. Boards of Insurers are now enabled to decide on various business aspects to quickly align their strategies to the changing market requirements,” says the insurance regulator in a statement.

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