POSTED BY September 17, 2016 COMMENTS (32)ON
Starting 1st Oct 2016, all the insurance policies are going to be issued in electronic form.
Yes, you heard it right
Few years back IRDA had come up with the concept of 13 digit e-Insurance Account (EIA), where an investor had the option to convert their existing physical policies into demat form, but till now it was not mandatory. However now things have changed and starting 1st Oct,2016 it has become compulsory.
Now, every insurance company has to issue all kinds of insurance policies in an online format. So if you are buying any kind of insurance policies (life, health, motor, pension policies and all kind of general insurance policies too) you need to have an e-Insurance Account (EIA) and the policies will be issued in Demat form only in that account.
This will be true even for renewal policies. So even if you are not buying any fresh new policy, at the time of your policy renewal this will apply to you
This e-account is required only if the annual premium crosses Rs 10,000 for most of the policies like term plan and health insurance or if the sum assured is above 5-10 lacs. The exact requirement is as follows for various kind of policies (source link)
Step 1: Choose the Insurance Repository
There are 5 registered insurance repositories in the country, licensed by IRDA, out of which you need to choose one. These are …
Note that you can choose any one of them, and there won’t be any difference, other than level of service. At the backend, everything will be the same. Also if you are not satisfied with your insurance repository provider service, you can switch to another one later.
Step 2: Fill up the form and submit the documents
The process now is very simple, once you have decided the repository company, all you need to do is fill-up the form and attach your KYC documents and submit it to their office in your city.
CAMSrepository also has an option where you can first fill-up the form online and then download the filled form. I think it will work for most people and save time. If you want to fill the form offline, you can download e-insurance account opening form here
Following are the documents you need to submit
Note that the canceled cheque is required so that the information of the bank account is captured beforehand, Any maturity proceeds or claim amount will be paid in this same account. Ideally, this should be the same one from where the insurance premium is paid, but not mandatory.
All the major insurance companies like LIC, ICICI, HDFC, and others have already joined hands with this facility.
Check out this short video created by CAMS team
Once you submit the documents, it will just take a few days to open the account.
If you need the detailed list of the documents required, you can view this PDF document (2nd page)
A special feature called “Authorized Representative” is introduced in this e-insurance account where an investor can assign someone trustworthy or close to being AI (authorized representative) who will be able to access the details of the account in case of death of the policyholder. This is different than the nominee.
For example, I can give my close friend name and details in the AI section ask him to have a look at all my details in case I am dead and ask him to communicate things to my family as per my plan.
Let me know to share some benefits and key points of this e-insurance account and how it will benefit the overall insurance industry as well as the investor, even though it may look like another hassle to you right now
Understand that with this initiative, the insurance companies will simplify their process and a good amount will be saved as there won’t be a lot of paperwork involved (printing of documents, courier etc) and that’s why insurance companies will fund this initiative and will keep it FREE for investors.
I know you must be thinking about what will happen to my existing policies which I have bought till date? So, there is a simple process to convert them online.
Once you open the e-insurance account, you can apply for conversion of your existing policies into the online form (its good that you do it beforehand, because at the time of renewal it’s going to happen anyways going forward)
As per Cam’s repository FAQ point 18, you can just mention your policy number and it will be converted into an online format
18. How do I convert my existing paper policy into electronic form?
If you already have eInsurance account, log in to your eInsurance account, click on “ePolicy conversion” and enter your policy number, name of Insurance company that needs to be converted into ePolicy. In the next few days, your policy will be converted into ePolicy.
You can also download the policy conversion form and submit it for offline -> online conversion of policies
Please share what do you think about this new rule? Do you think it will help investors and the insurance industry?
Here is the list of some of our best content.
Can you spend 5 min of your time to help in a study on the topic of “Robo-Advisory”