IRDA policy shift clears life plus health combi products
24 December 2009
Insurance regulator IRDA on Wednesday allowed combined health and life insurance products to provide life cover with health insurance to subscribers. Under its revised policy life and non-life insurance firms can jointly offer 'Health plus Life Combi Product', subject to the guidelines it has framed.
According to IRDA, the move will enhance the penetration of personal lines of insurance with a wider choice to policy holders. Under the existing structure, non-life insurers are not allowed to offer pure life insurance products.
The IRDA notified the guidelines following representations from insurance companies for offering an 'umbrella of a single product' and to enhance policy options for subscribers. The guidelines call for mandatory agreements for life and non-life insurance companies prior to offering the new product to subscribers.
Life Insurance Council secretary general S B Mathur said combo products did help policy holders and would help increase the penetration of health insurance in the country. IRDA further said that such products may be offered by all life insurance and non-life insurance companies.
"A tie up is permitted between one life insurer and one non-life insurer only. Thus, a life insurer is permitted to tie up with only one non-life insurer and vice-versa," IRDA said.
The regulator further said the insurers may offer any number of combination products provided they obtained prior IRDA approval by duly filing the copy of the agreement entered in this regard. IRDA said the product may be offered both as individual policy and on group insurance basis and would need to include a free look option as called for in the regulation.