As per the Insurance Act,
Till now these changes could be done free of cost.
However, as per the recent guidelines issued by the Insurance Regulatory and Development Authority of India (IRDA), life insurance companies can henceforth charge a fee from the policy holders for any "cancellation" or "change" in their nominations.
The fee that the insurance companies can levy, for registration of either any cancellation or change in the nominee, in any life insurance policy would be as under:
a) Not exceeding Rs.50 (inclusive of all taxes) for the policies issued in the electronic form
b) Not exceeding Rs.100 (inclusive of all taxes) for all other types of life insurance policies.
No other fee, except what is prescribed above, can be levied towards any services related to the nomination.
These guidelines are effective April 1, 2015.
The existing charges in a typical life insurance policy already add-up to quite an exorbitant amount. So I wonder why IRDA felt the need to make the policy holder pay additional money for the nomination change / cancellation.
Moreover, alteration in the nominees is rare. It may typically happen only on a few occasions during the 10-20 years of policy tenure. As such, the same could easily be managed within the annual Policy Administration Charges payable by the policy holder.
This definitely doesn't seem to be a good step by the IRDA. It is a big disappointment after the new nomination rules in insurance made it really family-friendly.
(^^ When the policy holder designates a nominee at the time of buying the policy through the proposal form and the same is recorded on the policy document itself by the insurance company, it is considered as a valid acknowledgement and no additional document need to be issued by the Insurer.)
- A life insurance policy holder can nominate a person(s) who will receive the sum assured in the event of his/her death
- This can be done either at the time of buying the policy or even later at any time during the policy term
- Such nomination(s) can be changed or cancelled, by an endorsement, before the policy maturity
- Insurance company must issue a written acknowledgement^^ confirming the registration of such nomination(s) / alteration(s).
Till now these changes could be done free of cost.
However, as per the recent guidelines issued by the Insurance Regulatory and Development Authority of India (IRDA), life insurance companies can henceforth charge a fee from the policy holders for any "cancellation" or "change" in their nominations.
The fee that the insurance companies can levy, for registration of either any cancellation or change in the nominee, in any life insurance policy would be as under:
a) Not exceeding Rs.50 (inclusive of all taxes) for the policies issued in the electronic form
b) Not exceeding Rs.100 (inclusive of all taxes) for all other types of life insurance policies.
No other fee, except what is prescribed above, can be levied towards any services related to the nomination.
These guidelines are effective April 1, 2015.
The existing charges in a typical life insurance policy already add-up to quite an exorbitant amount. So I wonder why IRDA felt the need to make the policy holder pay additional money for the nomination change / cancellation.
Moreover, alteration in the nominees is rare. It may typically happen only on a few occasions during the 10-20 years of policy tenure. As such, the same could easily be managed within the annual Policy Administration Charges payable by the policy holder.
This definitely doesn't seem to be a good step by the IRDA. It is a big disappointment after the new nomination rules in insurance made it really family-friendly.
(^^ When the policy holder designates a nominee at the time of buying the policy through the proposal form and the same is recorded on the policy document itself by the insurance company, it is considered as a valid acknowledgement and no additional document need to be issued by the Insurer.)
