India’s insurance industry is warming up for two crucial changes that may have a far-reaching impact on insurance companies, policyholders, and intermediaries. The first is, you will be able to purchase insurance policies from favourite e-tailers Flipkart and Amazon soon. Even insurance intermediaries will be allowed to set up e-platforms -- websites and mobile apps for servicing and promoting insurance policies. And the second is, insurance policies will be issued in an electronic form only.

The Insurance Regulatory and Development Authority (IRDA) is hopeful that these changes will lead to accessible, low-cost insurance products and improve the insurance penetration in the coming years. Moreover, service standards and efficiency towards policyholders will improve.

How are the industry participants responding to these changes?
Well, not everybody in the industry is happy. A few companies believe, by making these changes the IRDA is trying to shift focus from servicing to pricing. Those subscribing to this view are of the opinion that factors such as claim settlement should matter as much as pricing. While there are others who believe that allowing the sale of insurance products through e-commerce platforms and the mandatory issuance of policies in the electronic form will help insurance companies reach out to people living in remote areas, who otherwise lack access to the insurance products and services of intermediaries.

So, is it advisable to buy insurance products from e-tailers?
PersonalFN believes insurance is a subject matter of solicitation, hence when you buy insurance – be it a life and/or non-life policy(s) – be very clear, and opt for the most suitable product. After all, life insurance is a long-term contract of indemnity and holds immense importance to one’s financial health. Hence, insure yourself optimally to mitigate the detrimental impact on the family’s long-term financial wellbeing.

And about the electronic storage of policies...
For the time being, the rule of issuing electronic policies applies only to new policies. Current policyholders can continue to hold existing policies in physical form.

However, there is a possibility that insurance companies may allow some discount on the premium, if you agree to receive the policy only in electronic form. So, keep you’re an eye out for such developments.

e-Insurance Account (e-IA) will serve just as your demat account, where all policies (both life and non-life) in your name will be stored. Moreover, at least once a year, the insurance repository will communicate to you regarding all activities in the account. Insurance repositories will be the agencies doing a job of a custodian for your insurance policies, as it is done in the case of Shares by the NSDL and CDSL. For insurance policies, agencies such as NSDL (National Insurance Repository), CDSL (Insurance Repository) will provide a similar service.

You can assign a representative to handle your e-IA. Moreover, holding policies in electronic form will do away with the need for preserving original policy papers all the time.

Final word...
PersonalFN is of the view that, although these are crucial developments, the basics of buying insurance don’t change. So, you can buy from e-tailers if you’re mindful of these aspects.
 

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vishalchouhan1606@gmail.com May 07, 2020 My name Vishal Kumar maine 10th kiya hai

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