IRDAI has proposed a standard travel insurance policy with common coverage and policy wordings across the industry. The move is aimed at increasing penetration of the product.
“The standard product shall have the basic mandatory covers as specified in draft guidelines which shall be uniform across the market. The product may be both as an individual product and as a group product,” said the draft guidelines issued on 28 December, 2020, by the IRDAI.
Though there are a number of travel insurance products available in India, the penetration of travel insurance is yet to take off. Further, each product has unique features and the insuring public may find it difficult to choose an appropriate product. In order to deepen the penetration of travel insurance, which shall provide a safety net to every individual who is travelling, it is considered essential to have a standard travel product, said the draft guidelines issued by the IRDAI.
Key features of the policy are:
There shall be no restrictions on the age of entry. However, the proposer shall be of a minimum of age 18 years, as per the draft guidelines. The proposer is the person who takes the insurance cover, he/she is also called the policyholder.
There are five variants under domestic travel – 1. Travel by any mode of public transport (within city), 2. Travel by any mode of public transport (outside city), 3. Train Journey, 4. Air-travel and 5. Domestic tours involving road, water, train and air travel) and four under overseas travel (1. Long-term trip (students), 2. Short-term trip (tours/leisure) (covers travel through road, water, train and air), 3. Multi-trip during a policy period (business), and 4. Coverage only for travel (onward and return)
The nomenclature of the product shall be Standard Travel Insurance Policy, succeeded by the name of the insurance company.
The standard product shall also be offered on a family floater basis. When you buy travel insurance for the entire family, it is known as a family floater. It provides insurance covers for the entire family for the sum assured during the course of travel and only one premium is paid for such a travel policy.
The policy tenure of the standard product shall be the duration of the journey of the policyholder as a fare-paying passenger and during their stay overseas, in case of the overseas travel policy, as specified in the policy schedule.
The premium under this product shall be on a pan-India basis and no geographic location/ zone-based pricing is allowed. And, pricing in respect of overseas travel insurance is permitted based on the country or region of travel and stay. (For example, Asia (except Japan & Korea), Europe, USA & Canada, Asia (Japan & Korea), other countries), as per the draft guidelines issued by the IRDAI.
