There's a big change in how insurances will be sold. Good or bad move?

New insurance policies, be it health, life or general, will only be available in digital format.

Only if you request the insurer will you get a physical copy.

This comes following the Insurance Regulatory and Development Authority of India's (IRDAI) directive on March 20, 2024, stating that all new insurances issued from April 1, 2024, will have to be in an electronic form.

This new approach is similar to holding shares in digital form in a demat account. Just as you open a demat account to hold shares, you'll need to open an e-Insurance Account (eIA) for your insurance policies.

What are the benefits?

• One-stop destination: Your eIA serves as a one-stop destination for all your insurance policies, including health, car, life, and others. This will eliminate the hassle of managing and safeguarding multiple physical policy documents.
  
• KYC convenience: Upon opening an eIA, you must provide KYC details just once. Once you have done so, you don't have to submit KYC documents each time you purchase a new policy. All you have to do is provide your e-insurance account number.
  
• Effortless updation: Do you want to update your mobile number, contact details, address, or other information? Instead of making individual changes across multiple policies, update your eIA account once, and the changes will reflect across all your insurance policies.
  
• Premium payments: You can also pay insurance premiums through your eIA account.

What happens with the old policies?

Can I convert my physical insurance policies into electronic form?
Yes, you can dematerialise your physical policies. However, you'll first need an eIA account. The following section will show how you can open one.

Is it mandatory to convert existing physical policies into electronic forms?
No.

How to open your eIA account

You can open your eIA account both online and offline.

Let's guide you through the online process. While four insurance repositories can open your eIA - CAMS, KARVY, NDML and CIRL - here is how you can open your account with CAMS:

• Visit camsrepository.
  
• Click on 'Create e-insurance account' (top of your screen).
  

• Enter your mobile or email ID.
  
• Please provide all the required details. In the' Policy Details' section, you can add the details of all your physical policies.
  

• Submit your application.

Once done, the insurance repository takes around two days to activate your eIA.

Our take

While there may be teething issues initially, we think this is a good move for policyholders. We also recommend you convert your existing policies into an electronic form for ease of management and accessibility.

Also read: Benefit amount CSR is the most important ratio while buying life insurance.