Rights & Duties of a Life Insurance Policyholder Explained

Quite often when buying a life insurance policy, policy buyers inquire everything about the plan they are interested in. Still, in many cases, policyholders are clueless about their rights and duties as a consumer of a life insurance policy. If you too are unaware of your rights and responsibilities, make sure you go through the entire document carefully. 

Rights of A Life Insurance Policyholder 

As per the Insurance Regulatory and Development Authority of India or IRDAI, life insurance policyholder possesses the right to:

• Cancel a life insurance plan within 15 days from the date of receipt of the policy document, if the policy terms or conditions do not fit their requirements well. In this case, the policyholder is free to return the life insurance policy explaining the reasons for objection, receive a refund of the premium paid, and repurchase the units at the cancellation date prices if it is a unit linked insurance plan or ULIP. 
• Receive partial withdrawals, switch funds, surrender the policy after the lock-in period in case of a ULIP. 
• Receive death claim amount, if you are a nominee/assignee under a life insurance policy. 
• Request policy alterations like premium payment mode, policy term, sum assured enhancement, and redirection of premium. 

As a policyholder, you own a certain responsibility towards your life insurance company as well as the life insurance policy you want to buy. Let us shed some light on the key duties of a life insurance policy buyer/policyholder. 

Duties of A Life Insurance Policyholder 

According to the Insurance Regulatory and Development Authority of India or IRDAI, a life insurance policy buyer or policyholder has the following duties or responsibilities towards their life insurance company & policy:

At the Time of Policy Purchase

• Duly fill the proposal form on their own in a correct and truthful manner. 
• Disclose all the significant information about the risk they 
• Make all the policy choices (term, premium amount, premium paying frequency, and more) as per your specific needs. 
• Select electronic payment of premium (ECS) for safety, record and convenience.
• Register a nominee under the policy and provide all their details correctly. 
• Make sure you provide correct communication details. When changed, the insurer is informed.

After You Buy the Policy 

• Ask the life insurance company immediately about your policy if you do not receive any information 15 days after the proposal is submitted. 
• Provide any additional documents to the insurance company, if asked. 
• Contact the insurance company if the policy documents do not reach you after the acceptance of the proposal.
• Check the policy bond when received and make sure it is the one you wanted. 
• Check all the policy conditions. Ensure that it is the same as it was explained to you at the time of sale. 
• Clarify all the doubts with the insurance company immediately.

While Maintaining the Policy 

• Pay premium regularly before the due date or within the grace period.
• Do not wait to receive a premium notice.
• Do not wait for any individual to pick your premium cheque up. 
• Intimate the insurance company in case of any change in address, contact details and more details. 

At the Time of Policy Nomination 

• Change the policy nomination after issuance by following the standard process. 
• Appoint an appointee in case the nominee is a minor.
• Get the appointee to sign in the endorsement depicting their consent to act as an appointee.

If Your Policy Lapses 

Get in touch with the insurance company for policy revival.

If You Lose Your Policy Bond 

• Report about the policy bond loss to the insurance company immediately.
• Get a duplicate policy by performing all formalities. 

At the Time of Claim - 

Comply with your insurance company with their various requirements regarding claims.

Also read: How to Compare Life Insurance Plans?

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.