Digital Insurance Policy - Risky move

Major change will initiate from April 1 , 2024 in the field of Insurance.

The Insurance Regulatory and Development Authority of India (IRDAI) previously announced that digitisation of insurance policies will become mandatory from April 1, 2024. This mandate will apply to all insurance categories, encompassing life, health, and general insurance, requiring policies to be issued electronically.

If you decide to buy insurance after April 1, your insurer will issue the policy only in digital form. This is in line with the Insurance Regulatory and Development Authority of India’s Protection of Policyholders’ Interests regulations that make it mandatory for insurers to issue policies in dematerialised form. The regulator, insurers and other stakeholders say e-insurance will help policyholders and the entire insurance ecosystem.

Impact:

1. How the population who have less computer literacy will understand this move?
2. How to authenticate is the policy issued is from the Insurance company or a fake one? Even educated professionally qualified people do not check whether the digital copy is original.
3. Majority of the population do not understand dematerialize form?
4. If a person who is at lower section of service provider does he have the means to ensure the implication of this move? Was a survey carried out to understand what they need instead of imposing on them?
5. If some one earning INR 20000 and less per month has to compulsory open a email account and buy a smart phone?
6. What about people who do not have laptop / personal computer where will they save this digital copy?

This may result in a fraud in future as to how a fake digital insurance policy was issued to the people.

It appears following assumptions were made which appears to be incorrect:

1. This will be embraced like UPI.
2. This will be accepted like issue of shares in dematerialized format

Government has not stopped printing / circulation of physical currency in the economy unlike Insurance policy where future will be only digital in nature.

Insurance policy in digital copy needs lot of homework.

This should have done separately like policies issued to institutions should be in a digital copy compulsory and for retail the move should be more gradually over a period of time.