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Business News/ Money / Personal Finance/  IRDAI eases annuities purchasing rules for NPS retirees, allows digital life certificate
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IRDAI eases annuities purchasing rules for NPS retirees, allows digital life certificate

The IRDAI said that to facilitate ease of living for all senior citizens receiving annuity payments, the current framework of Aadhar-based authentication for life verification certification, such as Jeevan Praman, a Govt. of India initiative on biometric enabled digital service for pensioners, to be adopted

Photo: iStockPremium
Photo: iStock

To bring ease of living for NPS retirees, the Insurance Regulatory and Development Authority of India (IRDAI) has relaxed the requirement of submitting a separate proposal form for taking the Immediate Annuity products from proceeds of the National Pension Scheme (NPS). In the current scenario, NPS retirees submit an exit form to NPS and a proposal form to insurers at the time of superannuation.

The regulator IRDAI said, “It has been observed that Pension Fund Regulatory and Development Authority (PFRDA) is collecting exhaustive exit form from the NPS retirees which capture necessary details which insurance companies require in the proposal form."

This way, the exit form of NPS will now be treated as a proposal form for purchasing annuities, thereby reducing the time and efforts of senior citizens and insurers. Also, in order to increase the adoption of technology, insurers have been advised to adopt Adhaar based authentication for verification of life certificates, such as Jeevan Pramaan, a Government of India initiative on biometric enabled digital service.

The IRDAI also said that to facilitate ease of living for all senior citizens receiving annuity payments, the current framework of Aadhar-based authentication for life verification certification, such as Jeevan Praman, a Govt. of India initiative on biometric enabled digital service for pensioners, to be adopted.

Conjeevaram Baradhwaj, executive vice president (Legal & Compliance) & company secretary at Future Generali India Life Insurance Company Ltd said, “Under the NPS, the subscriber who superannuates is required to purchase an immediate annuity (excluding the commuted value) from any life insurance company. At the time of purchasing immediate annuities, a separate Application form is collected by life insurance companies. Since the information required in the Application form is already available under NPS, in order to avoid duplication, IRDAI has advised life insurance companies to treat the Exit form as the Proposal form for NPS retirees purchasing annuities – instead of again collecting information from customers. Since under annuity policies, the annuity amount is payable only as long as the annuitant survives, life insurance companies take an annual "survival certificate“ from the annuitant. IRDAI has now clarified that the "survival certificate“ signature can be taken through biometric-based digital means. Both the above clarifications are welcome steps intended to facilitate ease of servicing annuity policies purchased by annuitants."

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ABOUT THE AUTHOR
Navneet Dubey
Navneet Dubey is a personal finance writer and artist. Over the past decade, he has written feature stories on insurance, financial planning, lending and borrowing.
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Published: 13 Sep 2022, 08:09 PM IST
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