IRDAI Master Circular: Policy Loan Facility Mandated in All Life Insurance Savings Products

Current Context: The Insurance Regulatory and Development Authority of India (IRDAI) issued a master circular on 12th June 2024 that introduced some key reforms for life insurance policies in India.

• Here's a breakdown of two important points:
• Mandatory Policy Loan Facility: This is a big win for policyholders. Now, all life insurance savings products must offer a policy loan facility. This means if you face a financial emergency, you can borrow money against your policy's surrender value instead of surrendering the entire policy.
• Customer Information Sheet (CIS): This is a new document that life insurance companies are required to provide. It simplifies policy details by explaining benefits, terms, and conditions in an easy-to-understand format. Think of it as a one-stop shop for key policy information.
• These reforms are aimed at making life insurance more transparent, flexible, and beneficial for policyholders.

Question:

1 What is the new mandatory facility introduced by IRDAI for life insurance savings products as per the master circular issued on 12th June 2024?

• A) Free health check-ups
• B) Policy loan facility
• C) Increased surrender value
• D) Free premium waiver

Answer: B) Now, all life insurance savings products must offer a policy loan facility.