Buying term insurance is easier than ever now! All you need to know about IRDAI's new rule

Now, you shouldn’t have any excuse for not buying term insurance. The Insurance Regulatory and Development Authority of India (IRDAI) has made buying term insurance easier than ever by removing the paperwork, otherwise required. According to the new rules issued by IRDAI, you can now fill up the application form, submit documents and even sign them through your mobile.  

"The Authority is in receipt of feedback from various life insurers that the situation arising in the wake of COVID-19 outbreak has impacted the traditional manner of canvassing life insurance policies by agents and intermediaries. In particular, the filling-in of the physical proposal forms, obtaining wet signatures on them and subsequent movement of such physical papers, etc., are severely affected,” a new circular from IRDAI said. 

To recall, you can already buy insurance plans from the website of life insurers and the same can be done through agents and intermediaries such as banks, corporate agents etc.  

"In this backdrop, the life insurers have represented to the Authority to allow the option of authenticating the proposals for life insurance through electronic means, in place of physical signature, for the sales made by insurance agents and intermediaries, in addition to the methods presently allowed", it added. 

1. It said that life Insurers are allowed to obtain the customer’s consent without requiring a signature on the hard copy of the proposal form, for the business solicited by insurance agents/intermediaries subject to following: 

The completed proposal form shall be sent to the prospect on his/her registered e-mail ID or mobile number in the form of an e-mail or a message with a link as the case may be. 

The prospect, if he/she wishes to consent to the proposal, may do so by clicking the confirmation link or by validating the OTP shared. The Insurer shall maintain verifiable, legally valid evidence for the proposer’s consent received for the fully completed proposal form. Further, the insurer shall not accept any payment of money towards proposal deposit till the receipt of the consent of the proposer. 

In all such cases, the agent/intermediary shall confirm that only the approved sales material has been used during the solicitation process. They shall also certify the authenticity of the e-mail ID and/or mobile number of the prospect. 

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2. The Insurers shall be responsible for: 

Providing to the insurance agents/intermediaries approved digital sales material and ensuring that only such material is used while soliciting the business; 

Authenticating the e-mail IDs/mobile numbers of the prospects by conducting de-duplication of such data and other such means; 

Ensuring the suitability of the product being purchased; 

Carrying out pre-issuance verification calls in respect of all such proposals. 

3. The facilitation is allowed on an experimental basis with immediate effect till 31st December 2020 and is limited to pure risk products, i.e., products that do not involve any savings element.