Taking Cover. Nuts and bolts of e-insurance

Come October this year, all new insurance policies will be issued only in electronic form, according to the latest regulations of IRDAI.

Opening an account In case your insurer has a partnership with a repository, the policy will be issued in electronic form through the repository, says SV Ramanan, Chief Executive Officer of CAMS Repository Services. NSDL National Insurance Repository, CDSL Insurance Repository, CAMS Insurance Repository Services and Karvy Insurance Repository Policies are those providing this service.

The policies issued through these repositories will be stored electronically in an e-insurance account (eIA) opened in your name, if you don’t already have one.

eIAs were first introduced about a couple of years ago. But so far, it has not been mandatory to hold policies in electronic form. You can either open the eIA account through your insurer or directly by approaching the repository.

The account opening procedure involves filling up an account opening form and complying with KYC requirements. As soon as the underwriting is over, the repository gets the intimation from the insurer, after which it issues the policy.

This eIA is somewhat similar to the demat account you would have for shares. You can download a copy of the policy from the account and print it out if you desire a physical copy.

No costs attached There is no cost attached to this account for the customer. While some of you may get a physical copy of the policy too from an insurer (where he issues the electronic policy directly), not asking for it may get you a discount on the premium, says Vighnesh Shahane, CEO & Whole Time Director, IDBI Federal Life Insurance. Besides, for any queries or claims that you may have, your eIA will have an authorised representative assigned by you. This representative will have access to the account in the event of your demise (or in situations where you are not in the capacity to access the account) and initiate the claims process.

Benefits of eIA These changed rules apply only for new policies. All your existing policies can continue to be held in physical form. But it makes immense sense to convert them to electronic form and store them in your eIA. Here’s why:

For one, storing insurance policies online with a repository is safer, compared to holding them physically. Nilesh Parmar, COO, Edelweiss Tokio Life, gives the example of the Chennai floods last year when many customers could not produce their policies at the time of claim, as they were all destroyed. Secondly, once you open your eIA and hold all insurance policies in it, you will have a single point access to them.

It will save you time, say, when you want to update information with respect to change of address or phone number. Vidyadhar Sawant, Country Head - Emerging Business, SBI Life Insurance, says the eIA will also reduce the pain of doing KYC every time a new policy is bought.

Currently, every prospective customer of an insurance company has to manually fill a lengthy form and submit proof of address and identity each time he signs up for a policy.

The other advantage of holding all policies in one account is that at the time of claim, it is enough if you make a single request.

Finally, all types of insurance policies — life (pure term, endowment, ULIPs) as also non-life (motor, health, travel and personal accident) can be stored in one eIA. At least once every year, the insurance repository will send you a statement of account with details of policies.

Finally, since insurance companies are not yet mandated to tie up with repositories, if you choose to pick a policy from an insurer who doesn’t have a tie-up, you may not be able to hold it in the eIA.

The insurer may still issue a digitally signed policy to keep up with the new requirements. In such a case, you may get a physical copy of the policy document and will have to safe-keep it.

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