In a recent move, IRDAI has relaxed the repayment conditions in case of death due to suicide. The IRDAI has directed the domestic life insurers to refund the premium to a policy holder or pay the surrender value of his/her policies available in the case of his/her death due to suicide within 12 months from date of commencement of the life insurance policy or from the date of revival of the policy, as applicable.
Previously, no regulatory provisions were there for any refund to a policy holder during the first year of policy issuance. In case a person commits suicide and life insurers can legitimately deny any payment of claims to the beneficiaries of such a life insurance policyholder during this period. Any death claims linked to suicide were allowed only after 12 months of the policy issuance.
IRDAI in its revised life insurance regulations has said that in the case of non-linked policy, the nominee or beneficiary of the policyholder will be entitled to at minimum 80% of the total premiums paid till the date of death or the surrender value available as on the date of death whichever is higher, provided the policy is in force.
Meanwhile, in case of an unit linked policy, the nominee or the beneficiary of the policyholder will be entitled to the fund value, as available on the date of intimation of death following the death of the policy holder due to suicide within 12 months from the date of commencement of the policy or from the date of revival of the policy, as applicable.
IRDAI has also informed that any charges other than Fund Management Charges (FMC) and guarantee charges recovered subsequent to the date of death will be added back to the fund value as available on the date of intimation of death.
