Policies before April 1 will continue in physical form
BBN Bureau
Mumbai: Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory for insurance companies to issue policies only in digital format from April 1, 2024.
So all insurance policies sold on or after April 1 will be issued by the insurance companies in dematerialised (digital) form. It is under its Protection of Policyholders’ Interest regulations, IRDAI has made it mandatory for insurers to issue policies in demat form. Insurance companies as well as IRDAI believe that the demat system would further improve the entire insurance ecosystem.
The e-insurance policy is exactly like that of dematerialised or paperless share certificates, the e-insurance account framework involves issuing and holding policies in digital form.
IRDAI has instructed the insurers that irrespective of the fact that whether the proposal is received in electronic form or not, every insurer shall issue insurance policies only in electronic form.
Unlike in the share demat system which permits an investor to hold and operate multiple demat accounts, a policyholder is permitted to have only one e-insurance account.
However, policies before April 1 will continue in physical form, it is not a must that old policies be changed into demat form. IRDAI has clarified that exceptions could be made in exceptional circumstances for new policies. However, while filling up the proposal form you can insist for a physical copy. Even if you don’t do this, you can ask your insurer to dispatch physical documents to you.
If you want to convert the existing, physical policy into electronic form, the option is available. You can open an e-insurance account by downloading the forms from the portals of insurance repositories. You will need to submit KYC documents such as Aadhaar and PAN to the repository. You can also complete the KYC process online using Aadhaar or Digilocker.
For the new policy, you need not pay to open a demat account. For the time being the insurer will bear the cost which is estimated at Rs 40. After opening the demat account your policy will be credited to the account. All your policies- life, health, motor, and all other policies purchased on or after April 1 will be credited to your demat account by the insurance companies.
The greatest advantage of the demat system is that it makes you free from the headache of keeping the police certificate till redemption which takes place several years after the policy is purchased. Hundreds of people have lost their money due to the loss of the policy certificate. It is equally a better option for nominees. “It’s not easy for nominees to locate physical policy certificates when they need them at the time of filing claims,’ said a business head of a Health Insurance company.
