The IRDAI on Monday offered a standard travel insurance policy with basic coverage and policy wordings all over the industry. The transit is pointed at increasing the penetration of the product.
“The conventional product shall have the primary obligatory covers as specified in draft guidelines which shall be uniform across the market. The product may be both as a specific product and as a group product,” said the draft guidelines issued on 28 December 2020, by the Irdai.
Why there was a need to standardize the product?
Though there are a number of travel insurance goods available in India, the penetration of travel insurance is yet to take off. Moreover, each product has different features and the insuring public may find it challenging to choose a proper product. In order to extend the penetration of travel insurance, which shall produce a safety net to every person who is traveling, it is supposed necessary to have a regulation travel product, said the draft guidelines issued by the Irdai.
Key features of the policy are:
There shall be no limitations on the age of entry. However, the proposer shall be of the least 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 modifications under domestic travel – 1. Travel by any mode of public transport (within the city), 2. Travel by any mode of public transport (outside the 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 taxonomy of the product shall be Standard Travel Insurance Policy, succeeded by the name of the insurance company.
The standard product shall also be given on a family floater basis. When you buy travel insurance for the entire family, it is known as a family floater. It gives insurance covers for the entire family for the sum ensured during the course of travel and only one premium is paid for such a travel policy.
The policy occupancy of the standard product shall be the duration of the journey of the policyholder as a fare-paying passenger and throughout their stay overseas, in case of the overseas travel policy, as defined 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 regard to overseas travel insurance is authorized 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 announced by the Irdai.