Individuals can buy term policies without leaving the comfort of their home or signing on any paper till March next year. The facility was earlier slated to expire in December.

In a circular, the Insurance Regulatory Development Authority of India (IRDAI) said the decision was taken based on feedback from life insurers that on proposal forms, customer’s consent through electronic means instead of wet signature be allowed till March 31, 2021.

A suitability assessment benefit illustration, if applicable, and the completed proposal form will be e-mailed to the proposer or sent to their mobile number as a link when policies are sold electronically.

Suitability of a client’s policy is ascertained through a series of questions like age, income, life stage, family status, investment objectives, insurance portfolio already held, and financial and family goals. It is based on a prospect’s risk profile, financial situation, and investment objectives.

The e-mail sent to a client will highlight the sum assured and the premium amount payable, along with policy and premium payment terms of the cover being solicited. It will seek a proposer’s consent in the main body of the message.

A proposer can consent to the product offered by affixing a digital signature or by clicking a confirmation link in the e-mail or validating it with an OTP (one-time-password). The insurer can ask for payments only when it has received the proposer’s consent.

All life insurers were mandated to place a standardized presentation of each product on their website in the past. Life insurers will need to mail copies of these standardised presentations to policyholders along with policy documents. A free look cancellation period of 30 days will be applicable for covers sold under these provisions.

“It shall be the responsibility of the insurer to authorise specific individual agents for this dispensation,” the regulator said in its circular. “…agents shall not solicit non-single premium unit-linked insurance policies for annualised premium exceeding Rs 50,000 or single premium unit-linked insurance policies exceeding Rs 1,00,000.”

IRDAI has asked insurers to verify at least 3 per cent of sales to ascertain compliance with these provisions. Records of verification calls will need to be preserved for at least three years. The insurer will also be required to maintain verifiable, legally valid evidence of the proposer’s consent in an unalterable and easily retrievable form for six months beyond the policy’s term or until satisfactory settlement of a claim.

To facilitate policyholders, insurers will provide portal-based or app-based support; ensure compliance with suitability assessment and issuance of benefit illustration if applicable.

They will be required to provide appropriate training to persons involved in the sales and solicitation process to ensure customer’s consent is obtained after clear information has been provided to the proposer on the product being sold.

The insurers will monitor grievances received and promptly undertake corrective actions. They will need to submit a monthly statement of grievances.