General and health insurers should offer the product from April 1, 2021
After initiating a standard health and term plan, the Insurance Regulatory and Development Authority of India (IRDAI) has now issued an exposure draft for a standard personal accident insurance cover.
The insurance regulatory body has also instructed all general and standalone health insurers to share their suggestions on the same, besides asking them to offer the product from April 1, 2021, onwards.
The standard personal accident product will have a basic mandatory cover as specified in the guidelines which shall be uniform across the market. The standard product across insurers will have the same features, common coverage, policy wordings, benefits, inclusions, and exclusions. Though the prices, service level and claim settlement rate may differ.
The standard product is allowed to be offered as a group product also. The minimum sum insured shall be Rs 2.5 lakh and the maximum sum insured shall be Rs 1 crore.
“This move will help the common man to understand the various inclusions and exclusions in a standard plan. The standardization of the products will be a revolutionary move in the insurance sector as the plan will help in making the buying decision much easier and will develop strong faith and trust in customers towards the insurance ecosystem”, said Amit Chhabra, Head-Health Insurance, Policybazaar.com.
The standard personal accident product will offer death, permanent total disablement, and permanent partial disablement as base covers. At base covers, a benefit equal to 100 per cent of sum insured would be payable on death of the insured person, due to an injury sustained in an accident during the policy period, provided that the insured person's death occurs within 12 months from the date of the accident.
Temporary total disablement, hospitalisation Expenses due to accident, and education grant will be available as an optional covers. The optional covers as specified are allowed to be offered along with the standard product.
“An important reason for introducing a standard personal accident cover is primarily to help simplify the product for easy understanding of the customer and thereby make an informed decision,” added Chhabra.
The move is expected to help increase the penetration of the personal accident cover insurance product.