IRDAI has allowed life insurance companies to charge up to Rs.100 to change or cancel nomination in offline policies and up to Rs.50 to carry out such services in online policies.
IRDAI has allowed life insurance companies to charge administration fees to incorporate changes in nomination details of insurance policies. Simply put, life insurance companies can charge fees from policyholders for registering cancellation or change of nomination in a life insurance policy.
Life insurance companies can charge up to Rs.100 to change or cancel nomination in offline policies and up to Rs.50 to carry out such services in online policies. However, the discretion of charging fees to carry out such services has been left to insurers. Insurers are required to issue written acknowledgment to policyholders after executing such requests.
Currently, there is only one form available with the life insurers for change in nomination. A Mumbai based financial advisor had earlier told Cafemutual that insurance company can tweak the law to charge fees twice i.e. one for registering a cancellation and subsequently for change in nomination.
As of now, the insurance companies are not allowed to charge fees to incorporate such changes. However, there is a provision in the newly enacted Insurance Laws (Amendment) Bill 2014 which allowed insurance companies to charge fees for registering a cancellation or change of nomination subject to regulatory approval.