Irdai makes policy loan mandatory

New Delhi: Regulator Irdai on Wednesday said the facility of policy loan is now mandatory in all life insurance savings products, enabling policyholders to meet liquidity requirements.

Issuing a master circular which consolidates all regulations with regards to life insurance policies, the Insurance Regulatory and Development Authority of India (Irdai) also said the free look period, which provides time to review the policy terms and conditions, is 30 days as against 15 days earlier. The latest master circular follows a similar exercise by the regulator for general insurance policies. “This is an important step in the series of reforms taken up by the insurance regulator with interests of the policyholders at the core. A conducive environment is now facilitated to spur innovation, enhance customer experience and satisfaction,” Irdai said.

According to the master circular, the facility of partial withdrawal under pension products is allowed enabling the policyholders to meet their specific financial needs for important life events like higher education or marriage of children; purchase/ construction of residential house/flat; medical expenses, and treatment of critical illness.