Misunderstandings between the customer and the insurance company lead to the claim of the policyholder being rejected. To avoid any miscommunication and enable speedy processing, the policyholder is allowed a set of rights to safeguard their interests.

Similarly, the policyholder has certain duties to make things easier for the insurance provider to process the claim. Here is a list of Rights and Duties provided by the Insurance Regulatory and Development Authority of India. 
 

What are the rights of the insurance policyholder?
 

Rights are entitlements provided to the policyholder which they can exercise anytime. However, the rights must not violate any terms and conditions set by the insurance company. In layman’s terms, insurance policyholder rights is the irrevocable power provided to the insured. 
 

• The free look right

The policyholder has the right to return the policy and apply for its cancellation if the policy fails to meet the holder’s requirements. The right can be exercised within 15 days of buying the policy. The free look period will be extended to 30 days if one decides to buy life insurance online.



However, the insurance company is free to deduct the amount used to cover the risk for that period. It also has the right to deduct the cost of the medical tests done before the approval of the policy. If the policyholder exercises this right, the insurance company will cancel the insurance plan and return the premium amount paid after deducting the costs.
 

• The right to use the policy as collateral for a loan

While applying for a loan, the life insurance policy or the guaranteed1 return plan can be used as collateral. The loan amount that can be approved is equivalent to 80% of the cash value of the premium paid. The rate of interest to be charged will be different for different banks.
 

• Rights regarding a ULIP
  

The policyholder of a ULIP has the right to a partial withdrawal of the invested amount. The policyholder also has the right to convert the policy into a monthly income plan or any other plan of their choosing. The funds in which the premiums will be invested can be switched based on the convenience of the policyholder. The beneficiary of the policy will have the right over the death claim amount of the plan.

 

 

What are the duties of the insured?
 

The list of duties of the insured is exhaustive. You should know that these duties ensure speedy and uninterrupted payout of the maturity or the death claim amounts.
 

 

 

• Duties of the individual while buying the policy
  

 

The individual is responsible for providing the insurer with all the necessary documents and the applications. The individual is also responsible for providing a true and fair medical test report to the insurance company to be attached to the policy.

All the columns in the insurance policy application must contain accurate and the most recent personal information. The mode of the premium payment along with the amount of premium must be filled in clearly.



If the policy is a guaranteed¹ return plan, then it is the duty of the policyholder to ensure that they have read the fine print and are eligible for it.
 

 

• Duties of the policyholder after buying the policy

 

The policyholder has to contact the insurer and stay updated regarding the approval status of their insurance policies. After the policy has been approved, the individual needs to check the policy bond to ensure there are no errors. In case of doubt, they must immediately contact the insurer for further clarification. 
 

• Duties of insured during the term of the policy
  

The policyholder must ensure the timely payment of the premium to the company. The premium must be paid in time to prevent the policy from lapsing.



• Nomination
  

While buying the policy, the policyholder must enter the correct details of the nominee. The policyholder has the flexibility to change the nominee during the term of the plan. However, they must comply with all the due rules and regulations.



• In case of loss of policy
  

In case the policyholder loses the policy, they can easily get a new one. However, the policyholder must inform the insurance company of the loss and initiate the process of getting a copy of the original



• Duties of insured during the claim
  

During the claim of the monthly income policy or any other policy, the policyholder must comply with the insurer's requirements and provide the company with all the necessary documents. The policyholder is also responsible for helping the insurer with any prosecution cases the company might have against a third party.
 

Conclusion

Life insurance is a contract regulated by the principle of utmost good faith. Getting the claims and the monthly income amounts will become easier when one complies with the insurer’s requirements. The knowledge of the rights and duties of the holder will immensely help them navigate the policy and ensure that all the conditions are being fulfilled.

For more details on life insurance, come visit the Tata AIA Life website today. We offer a range of life insurance plans including term insurance, guaranteed1 savings plans,retirement plans, ULIPs and so on.
 

L&C/Advt/2023/Feb/0321