After coming out with norms for standard terms & conditions for health insurance and term life insurance, the insurance regulator IRDAI has asked companies for comments on its proposed guidelines on a standard personal accident cover. All stakeholders have been asked to send in their comments by Dec 18.
Explaining the rationale for a standard product, the regulator said that “The insurance market is having a wide variety of personal accident insurance products. Each product has unique features & the insuring public may find it a challenge to choose an appropriate product".
While insurers will be free to fix their underwriting practices & determine the price for their cover, the terms & conditions would be identical.
Standardisation of cover is there in motor insurance, which enables buyers to make an easier selection between providers. It also makes it easier to sell & reduce the scope of mis-selling.
Most personal accident policies cover death and permanent disablement (partial & total). Irdai has said that the compensation should be 100 per cent for death & ranging from 50 per cent onwards for permanent loss of limb or eye. Besides the death & disability cover, insurers can offer add-on covers, which include temporary disablement, hospitalisation expenses & provision of education grant to children of the victim.
Under the standard cover, the exclusions include war nuclear risks, self-injury, suicide, influence of alcohol & during adventure activities including engaging in ballooning or aviation other than as a passenger. It also excludes accident while under influence of intoxicating liquor or drugs.
Insurance companies have to settle or reject the claim within thirty days of receipt of the last document.
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