Know the Rights You Have as an Insurance Policyholders

Insurance is a technical concept which involves a lot of jargons not easily understood by customers. As such, there is rampant miss-selling. In fact, even if the customer is sold a right policy, he doesn’t understand the terms and conditions of the policy. As such, there are grievances and complaints from the customer’s end. To handle such grievances and to ensure that the customer’s voice is heard, the Insurance Regulatory and Development Authority (IRDA) has outlined policyholder’s rights. According to IRDA, every policyholder has pre-sale and post-sale rights which the insurance company and the intermediary have to protect. Do you know what these rights are? Let’s find out:

Pre-sale rights: Right to information about the policy

The policyholder is supposed to know everything about the proposed policy he is buying. He should know the benefit structure, the exclusions and the terms and conditions mentioned in the policy. The policyholder should know his obligations which are to be fulfilled after the policy is bought like paying premiums on time, disclosing important information when buying the plan, etc. Only after the policyholder is completely aware of the plan’s coverage, benefits and his duties, should the policy be sold.

Right to a key feature document

The policyholder has the right to get a key feature document which lists down all the key features of the policy which has been bought. The document contains the summary of the policy benefits, the coverage, the exclusions, the dos and don’ts for the customer, what is to be remembered at the time of the claim, etc.

Post-sale rights: Right to free look period

When the customer reads the key feature document, he might find out that the policy benefits are not exactly what was promised or what he expected. In this case he might want to cancel his policy and get the premiums refunded. Here comes the concept of free-look period. Every insurance plan must provide the customer a free-look period of 15 days from the date of receipt of the policy documents. The customer would have the right to cancel his policy during this period and get a premium refund. However, once the free-look period is over, cancellation of the policy would not be allowed and if it is allowed, the full premium would not be refunded.

Right to a claim

Once your policy has commenced, you have a right to make an insurance claim. The insurance company cannot reject your claim until and unless there is some serious misdemeanour on your part. Your insurance claim would get rejected only if you have defrauded the insurance company or if you have committed some serious criminal offence. Moreover, if you are making a claim for an excluded cover, your claim might get rejected. The insurance company also cannot cancel your policy or reject renewal of your policy after you make a claim.

Right to information on any changes in the product or on a new document

If the insurance company makes any changes in their product and you hold the policy in which there have been changes, you have the right to information on such changes. The insurance company is bound to inform you of the changes it has made. You can then continue with the policy on the changed terms or migrate to another plan as per your suitability. So, if you are asked to fill a fresh proposal on renewal, you have the right to find out the reason behind this fresh proposal. You should, ideally, fill the new proposal form only after being sure of its reason. You can find the reason from the insurance company and the company is bound to furnish you with the details. After you find the reason, you should mention the same in the document which you sign so that you have documented proof and you can protect yourself in case of any dispute.

Right to claim settlement within 30 days

Once you raise a insurance claim, the insurance company would make surveys and inspections to assess the nature and extent of your claim. The company has 30 days to complete its scrutiny and you have the right to get settlement of your claim within 30 days of intimation. In case of large quantum of claim, the company might involve higher authorities for proper surveys. In this case, the maximum period allowed to the insurer for claim settlement is 60 days. Once the claim is approved and the payment is being delayed for more than 15 days, you are entitled to receive an interest on the outstanding claim amount. The rate of interest would be bank rate + 2% and it would be calculated from 15 days after the last document has been submitted till the date the claim is settled.

So, these were the rights which are available to you, the policyholder. Know your rights so that you would know if the insurance company or the middleman have failed in their duties towards you so that you can raise complaints or grievances.

Choose wisely!

Also read: Buying a senior citizen health insurance policy? Look out for these points

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