The Insurance Regulatory and Development Authority of India (IRDAI) has directed life insurance companies not to withhold or delay payment of claims when the policyholder or claimant expresses unwillingness or has objections to execute the advance discharge voucher or to accept the amount.
In a circular, IRDAI has said in such instances of dispute, the life insurer should not insist on the discharge voucher or make it conditional for releasing the policy payment.
When executed, discharge vouchers indicate that a claim has been resolved between the insurer and the insured. It indicates that insurer’s contractual liability is extinguished.
IRDAI has, however, said life insurers may call for advance discharge vouchers in normal course at the time of making policy payments including free-look cancellation. “The discharge voucher sent to policyholder/claimant should necessarily contain policy number and the nature of payment and amount of claim under different heads including deductions and other relevant details,” the insurance regulator has said.
