Life insurance portability could be a realityThe Insurance Regulatory and Development Authority of India (IRDAI), an autonomous, statutory agency tasked with regulating and promoting the insurance and re-insurance industries in India, is considering allowing life insurance portability for policyholders.
Insurance portability is a concept where a policyholder can choose to switch his existing policy from one insurer to another. Under the current guidelines, life insurance portability is not allowed and if a customer wishes to discontinue his policy before maturity, he needs to pay surrender charges.
In 2011, for the first time ever, IRDAI allowed portability of health insurance policies. The move was a blessing for policyholders who were not happy with their exiting health insurance providers.
According to media sources, discussions to allow portability in life insurance are in early stages and it is likely to happen after the insurance industry moves to a completely digital form of transacting and managing insurance products.