New Delhi: Policy holders may get option to receive payment of claims in installments in respect of personal accident (PA)/ benefit based health insurance, once the recommendations of a committee are accepted by the Irdai.
Various general/ health insurance companies have proposed to the insurance regulator the need to give an option to policy holders to receive payment of claim benefits in these two type of policies.
The concept may be altogether new to the general/ health insurance industry, but it is in vogue since long in the life insurance industry, especially in respect of endowment policies, where maturity claim benefits are paid in installments to the policyholders.
Insurance Regulatory and Development Authority of India (Irdai) had set up a working group to study the proposal.
The settlement of PA/ benefit based health insurance claims in installments should not be a default option, said the report, which has been made public.
"The General and Health insurance companies may be allowed to offer the option of payment of claims in installments or in lump-sum upon happening of a contingent event in cases of indemnity products that have a fixed component, as well," it said.
For example specific illness (like cancer) based product that has both fixed benefit and indemnity components.
The provision of getting the claims in installments or lump-sum is a decision that should be taken by the policyholder and not the insurance company, the report said, and added that an explicit consent should be taken by the insurer from the insured.
On tenure of the claim installments, the report recommended that "the claim payment period can be capped up to a maximum of 5 years as per the needs of the target customers".
The outstanding claims shall be invested in line with the extant Irdai Investment Regulations, it added.