The Economic Times daily newspaper is available online now.

    IRDA mooting to allow conversion of life insurance policies into electronic form; to launch pilot project

    Synopsis

    You can convert your life insurance policies into electronic form or buy a new life insurance cover in electronic form relatively easily.

    ET Bureau
    You can convert your life insurance policies into electronic form or buy a new life insurance cover in electronic form relatively easily in the next two months. The Insurance Regulatory and Development Authority (IRDA) has asked insurance companies to participate in a pilot project on converting physical life insurance policies into electronic form between July 1 and August 31.

    During this period, every life insurer will have to digitise at least 1,000, or 5%, whichever is lower, of its existing physical policies.

    The companies must also issue a similar number of new electronic policies in these two months. "Policyholders can insist on mandatory conversion of all life insurance policies (during these two months). Life insurers will have to oblige," says Viiveck Verma, executive director, Karvy Insurance Repository.

    Only life insurance policies can be converted or bought in electronic form at the moment, but the insurance regulator is likely to extend it to general insurance products like health and motor by the end of this financial year. "Soon after the pilot period, IRDA is expected to release the guidelines to make the conversion of both life and health policies. This rollout will be done in a phased manner over a period of three to six months," says Verma.

    If you want to convert your existing life insurance policies into electronic form or buy a new cover in electronic form, you have to first open an e-insurance account (eIA). You can open the account by approaching your insurer, who can facilitate the process through insurance repositories licensed by the insurance regulator. You can also directly get in touch with these repositories — CAMS, Karvy, SHCIL Projects, NSDL Database Management and Central Insurance Repository of India.

    You will have to provide photocopies of identity and address proofs and PAN card. If you are planning to buy a new policy, you can insist on directly buying a digital version.

    Next, you will have to submit a conversion request form for every insurer whose policies you have bough Should You Convert? That sounds easy, but the question is should you go for it? The votaries of electronic form say it does away with the need to safeguard physical policies.

    More importantly, you don’t have to pay for opening an einsurance account and converting your policies. "There is no risk of loss or damage of a policy, which may happen with paper policies. The electronic form ensures that the policies are in safe custody and can be easily accessed when needed," says SV Ramanan, CEO, CAMS Repositories Services.

    Also, you can hold all your policies in a single account, ensuring easy tracking. You can make premium payments and submit other service requests by accessing this account online. It also saves you the trouble of going through KYC procedures every time you wish to buy a policy.

    Moreover, updating your address or contact details will be easier, as you need not inform all your insurers individually of such changes.

    "You have to submit only a single request – the repository, in turn, will inform all the insurance companies with whom you hold electronic policies about the changes," says Ramanan.

    (Your legal guide on estate planning, inheritance, will and more.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more

    (Your legal guide on estate planning, inheritance, will and more.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more
    The Economic Times

    Stories you might be interested in