Life insurance companies can no longer force policyholders or claimants to sign on acknowledgement receipt while settling the claim.
IRDAI has issued a circular in which it has asked life insurance companies not to insist policyholders to sign the discharge voucher (acknowledgement receipt) while settling claims. This has come into effect with immediate effect.
Insurance advisers say that some life insurance companies take sign from their policyholders in an acknowledgement receipt without making full payment of the claim. “A signed receipt can be used as an evidence in the court of law to prove that the insurer has made full settlement of claim in such cases,” said a Mumbai based insurance adviser.
In the circular, IRDAI said, “Where the policyholder/claimant expresses unwillingness or reluctance or objection for any reason to execute the advance discharge voucher or to accept the amount, the Life Insurer should not insist on the discharge voucher or make it conditional for releasing the policy payment. In such an event the Life Insurer shall not withhold or delay the payment for this reason but make the policy payment to discharge its contractual obligations. Life insurer may preserve the proof of making the payment.”
However, life insurers can still ask policyholders to sign on such vouchers at the time of cancellation of policy including free-look cancellation.
Typically, life Insurers instructs policyholders to sign a discharge voucher when making policy payments -be it maturity or death claims. Such vouchers indicates policyholder’s or claimant’s consent for discharge of life insurer of contractual obligations. It also serves as useful information to the policyholder about the amount payable under the policy as per policy terms and conditions.
