Now You Can Claim Your Accident/Health Benefits in Instalments

A working group set up by the Insurance Regulatory and Development Authority of India (IRDAI) recommended that the insurance companies allow policyholders to avail health and personal accident insurance claim benefits in instalments. The periodicity of such instalments can be monthly, quarterly, semi-annually or annually.

However, this facility must only be offered by insurance companies if a customer gives explicit consent. In fixed-benefit plans wherein a policyholder is entitled to receive a lumpsum on occurrence of certain conditions as mentioned in the policy, one can choose if he/she wants all the claim benefits at once or at regular intervals in the form of instalments.

The working committee of the IRDAI also said that specifying a cap on maximum number of claim instalments is also necessary to maintain uniformity across the industry. “It is recommended that the claim payment period be capped up to a maximum of 5 years as per the needs of the target consumers”, said the report filed by the working group.

Further, the working committee said that periodic claim payments would be beneficial in a scenario where the policyholder has defined periodic liabilities, say monthly, quarterly, or half-yearly needs such as child’s education fees, grocery and utility bill payments, etc., with no other fixed source of income. The insurers are also instructed to ensure that the pricing of these products is attractive to the policyholders.

While this is altogether a new concept when it comes to general or health insurance industry, but it has been in place in the life insurance industry, especially in endowment policies, where maturity claim benefits are paid in instalments to the policyholders.

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