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E-Insurance – The way to go

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There was a time when all documentation in the financial world revolved around maintaining physical copies. Maintaining of electronic copies was just an add-on!

Cut to year 2016. Today all our financial industry transactions are digitised. Our banks have shrunk into apps available on our fingertips. We are specially called by customer service managers of banks to visit the banks once or use our cheque books once a while to maintain the mandatory requirements of our existence.

With the digitisation of the mutual fund industry, today we can redeem, buy, shift funds from one MF to another at the click of a button.

Insurance industry was the last leg in digitisation of financial industry

The only big investment industry, which was still years behind in terms of digitisation was the insurance industry. This inspite of the fact that the insurance industry is one of those industries which has long term investments in the country’s economy, right from long term infrastructure products to government bonds and equity participation in companies.

In financial parlance, e Insurance is just one more ray from the same Sun called financial data management.

This brings us to the question of what is E insurance

E-insurance Account also called as eIA

It is a digital account with a unique ID for holding insurance policies online, just like a mutual fund demat account. It is maintained with an IRDAI authorised insurance repository.

How is a E-insurance account better then physically held policies.

There are various benefits for the policy holders and the insurance companies alike.

Safety of the insurance policy papers

Having access to policy papers for filing claims is very important and in case the physical papers are lost or destroyed due to a calamity, the process of acquiring a duplicate policy paper is quite a tedious process.

Converting the existing insurance policy into e policy or buying an e policy does away with this need of physical paper copy and can be accessed safely, anytime, from anywhere.

Access convenience

1. For you

a. All your insurance policies across all insurers are digitally held at one place so that you get a single window, real time view of all your policies.

b. Any claim you need to file or changes and service requests you desire across all insurance policies held, can be easily communicated by submitting a single form at any of the insurance repository’s service points. Eg address change, updating the contact number etc.

c. Any new purchase will not require KYC norms like address and identity proof.

d. You will also get your regular premium reminders and policy fund updates.

2. For your nominees

a. They need to file a single claim form, for all your insurance policies across insurers.

Reduced paper work

a. All new e-policies will require just the Unique identity no and the policy will be tagged by the insurer to your e account.

b. Since all your policies are consolidated at the repositories end, instead of receiving 5 annual statements from 5 insurers, you will receive a consolidated statement ( CAMS statement is an example of the same) from the insurance repository.

No additional cost

An e-insurance account is free of cost for the policy holder. Hence he doesn’t need to pay anything for accessing the account or servicing of the same.

The cost of maintaining the account is funded by your respective insurance company.

How does one go about creating a eIA.

1. To open a eIA , you have to select an insurance repository and submit the duly filled account opening form along with your identity proof and address proof like aadhar card , pan card , and a passport size photo.

2. E-proposal form will require the proposer’s electronic signature.

3. It usually takes 7 working days for the e insurance account to be opened. Once the account is in place, you can tag all your Life, Health, General and pension insurance policies from multiple insurers to this one account.

4. You will receive a 13-digit unique account ID number with login and password, like any other bank or mutual fund account. You can view all your policies with their fund values and latest updates.

5. It becomes your one stop, anytime anywhere place for all policy updates. You can even send your entire service request to the repository by visiting any of their service points or online on their site.

6. You are identified by a unique account number which can be quoted for all correspondence. You can also use it while buying new e- policies.

7. Since your KYC is already in place, you don’t need to resubmit KYC papers while buying new policies under the unique account no.

Who is an insurance repository?

Only entities approved by IRDAI can become insurance repositories. The following is the list of repositories in India.
1. Central Insurance Repository Limited
2. NSDL Database Management Limited
3. Karvy Insurance Repository Limited.
4. CAMS Repository Services Limited

Few aspects to be kept in mind while using an e account

1. You can hold polices either in physical copy or in electronic format. Both options are not allowed for the same policy. Eg Mr. Ajay decides to keep his few short term policies converted into electronic format and keep one long term policy in paper form. This is allowed and perfectly fine with the regulator, as the choice is of the customer.

2. A policy holder can hold only one e insurance account. The repositories have systems in place to verify in case the applicant already holds an e insurance account.

Latest IRDAI regulations in place for e policies

Criteria for compulsory Issuance of new e insurance policies

  1. Term plans – premium of Rs.10000 or SA Rs.10 lacs
  2. Non term plans – premium of Rs.10000 or SA Rs.1 lacs
  3. Pension and annuities plan – premium of Rs. 10000 or more.
  4. General insurance policies (except motor policy) – premium of Rs.5000 or SA of Rs. 10Lacs.
  5. Retail Motor Policies – All policies
  6. Individual Health policies – premium of Rs. 10000 or SA of Rs.5 Lacs
  7. Individual international travel policies – All policies
  8. Individual Personal accident and domestic travel – premium of Rs.5000 or SA Rs.10 lacs

E-commerce sites to sell E policies

IRDAI has allowed sale of insurance products through e-commerce platforms. The mandatory issuance of policies in the electronic form will help insurance companies reach out to people living in remote areas, who otherwise lack access to the insurance products and services of intermediaries.

As a signoff thought –

In future, the moment you register the death of a person, the insurance company will immediately be informed and the process of insurance payment will start. That’s the online perfection that we aim for.

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