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The Insurance Regulatory and Development Authority of India (Irdai) on Monday proposed a standard travel insurance policy, to be launched by 1 April 2021, with common coverage and policy wordings across the industry, a move aimed at increasing the penetration of the product.

According to Irdai’s 2018-19 annual report, 2.58 million overseas and 11.4 million domestic travel insurance policies were issued in the period. One of the reasons for low penetration could be the fact that different travel insurance products have different features that may be difficult to understand. “The standard product shall have the basic mandatory covers as specified in draft guidelines which shall be uniform across the market. The product may be available both as an individual product and as a group product," said Irdai’s draft guidelines issued on 28 December.

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In 2020, Irdai launched several standard insurance covers, from a health policy, to a term life cover and personal accident plan, among others.

Amit Chhabra, head, health and travel insurance, Policybazaar.com, said that just like Arogya Sanjeevani (health insurance) and Saral Jeevan Bima (term life insurance) policies, the standard travel product will have a basic cover that all insurers will have to offer. The product, across insurers, will have the same features, benefits, inclusions and exclusions, though the sum insured, prices, service levels and claim settlement rate may differ. “Travel insurance is one of the least penetrated segments in India and considering the pandemic, Irdai is making sure that travellers do not face any difficulty. Launching a standard travel policy will help bring uniformity and certainty," said Chhabra.

Anyone who is 18 years of age can buy the policy. There are five variants under domestic travel insurance (for example, for air and train journeys); and four under overseas travel (such as for short-term trips for leisure, and multi-trips during the policy period).

“This move will enable easy comparison and better transparency. There will be no surprises at the time of claim," said Naval Goel, CEO and founder, PolicyX.com.

The standard product shall also be offered on a family floater basis. The tenure of the standard product shall be the duration of the journey of the policyholder as a fare-paying passenger and during their stay overseas, in case of an overseas travel policy, as specified in the policy schedule.

The premium under this product shall be the same pan-India, and no geographic- or zone-based pricing is allowed. Pricing for overseas cover will be based on the country or region of travel and stay.

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