The move is part of attempts by the insurance regulator to enforce a standard product with common coverage across the sector
The Insurance Regulatory and Development Authority of India (Irdai) on Wednesday issued draft guidelines on standard personal accident insurance policies and said all general and standalone health insurers will have to offer this product from 1 April 2021.
The product, which is proposed to be offered on an individual basis, will have a minimum sum insured of ₹2.5 lakh and a maximum of ₹1 crore. The move is part of attempts by the insurance regulator to enforce a standard product with common coverage across the sector.
Irdai proposed a payout equal to 100% of the sum insured in case of death or permanent total disablement because of the accident.
For permanent partial disablement, the payout percentage will vary according to the type of disablement.
For example, in case of the loss of an entire foot or hand, the policy proposes a payout of 50% of the sum insured.
The cover for death and permanent total disablement will be mandatory, but insurers can offer optional covers along with the base plan, which will provide coverage for temporary total disablement and education grant for dependent children.
The optional cover will also pay out up to 10% of the base sum insured for hospitalization for a minimum of 24 hours as the result of an accident.
The minimum and maximum entry age has been kept at 18 years and 70 years, respectively. The policyholder can pay premiums yearly, half-yearly, quarterly, or monthly.
Insurance companies will have freedom on the pricing front.
The regulator has recently come out with a slew of standardized insurance plans, including Corona Kavach and Rakshak for Covid-19, Arogya Sanjeevani, a health plan, and Saral Jeevan, a term insurance policy.
According to experts, standardization of insurance products ensures the availability of specific-purpose plans and enables insurers to innovate on product design to differentiate and provide more options to policyholders.
“Irdai is trying to standardize all types of policies. Earlier they had come up with the health policy, then term plan and now personal accident cover. This is a welcome move from the point of view of simplification, as customers will be better able to compare plans from various companies," said Naval Goel, chief executive officer and founder of PolicyX.com.
Irdai will accept comments and suggestions on the draft till 18 December.
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