Buying a term insurance policy was never so easy. Initially, insurance agents used to sell the policies, then came the online mode, but now you can purchase term insurance using a One-Time Password (OTP).
Due to the ongoing Coronavirus (COVID-19) pandemic, the traditional manner of buying insurance suffered a massive blow, as it was difficult for people to leave their homes and meet insurance agents in person. Understanding the process, filling the paperwork, submitting relevant documents, and signing them was not possible due to the lockdown.
People could have bought the term plan from the Internet, but many do not have complete knowledge of the process. They still believe in trusted insurance agents. Insurance providers had approached the Insurance Regulatory and Development Authority of India (IRDAI) to validate the life insurance proposals via digital means instead of physical signatures.
To make things simpler, the IRDAI has introduced a new option, wherein you can buy a term life insurance through an OTP. Now, you can easily purchase a term policy from a reliable insurance agent by using the OTP facility.
Buying through OTP is a simple process, and it is not new. For example, while making any online transaction via your debit/credit card, the bank requires a valid OTP to complete the transaction. In such a case, the bank sends the OTP to your registered mobile number, which you can enter to validate the transaction.
Currently, it is possible to fill the application form, submit the documents, and sign the form via your mobile.
After evaluating all the possible ideas by incorporating the insurance providers’ suggestions, the IRDAI came with specific instructions that need to be followed.
At present, life insurance intermediaries or agents can seek the customers’ approval to complete the application procedure without the physical signature. The insurance intermediaries need to follow some set rules. These include:
- Life insurance providers will have to send the duly filled proposal form on the applicant’s registered mobile number or e-mail ID through a text message or e-mail with a link
- Applicants can grant their approval to accept the terms by validating the OTP or by clicking on the confirmation link sent via e-mail. As per the instructions from IRDAI, insurance intermediaries will have to maintain all the necessary records of the applicant’s consent received for the proposal form. Besides this, insurers have no right to take any money related to proposal deposit from the applicants before they get the receipt of consent from them
- Insurance agents should only use the authenticated proposal of the applicants for the documentation process. Here, they will have to furnish the details of the mobile number or e-mail ID through which the proposal has been confirmed
What is the responsibility of the insurers?
Insurers will be accountable for:
- Giving the accepted digital sales material to the insurance agents to carry out the business
- Verifying the e-mail ID and phone number of the applicant
- Making sure that the product is appropriate
- Checking the authenticity of the applicant by conducting verification calls before issuing the policy
Do note that the Insurance Regulatory and Development Authority of India has instructed insurers to follow this process as an experiment until December 31, 2020. Post the period, this new process of buying the insurance policy using OTP may be nullified until further notice.
So, you can now reap the term insurance benefits by buying a suitable plan through OTP, which is the latest and simplest method. Thus, it is advisable to invest in a plan at the earliest to avail all the useful term insurance benefits.