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IRDAI has allowed life insurance companies to offer riders which are available today to policyholders having policies which are no longer available for fresh sales.
With this, life insurance companies can offer riders like critical illness, accidental death and disability in withdrawn policies. For instance, if a policyholder has bought a policy 10 years back which did not offer critical illness rider, can now buy this rider even if his policy is withdrawn from the market.
IRDAI said, “These measures are effective immediately and apply to products which are no longer available for sale but still have existing policies serviced by insurers. The key objective behind this is to provide greater flexibility and empowerment to existing policyholders while safeguarding their interests.”
Among other key features that are added to policies that are not available for fresh sales:
- Insurers will have to give flexibility of paying premium in installment to such policyholders
- Such policyholders can avail loan against insurance at a reduced rate (basically, the current market rate or pre-decided rate, whichever is lower)
- Policyholders will have an option to decide if they want lumpsum or regular income on maturity