It will give you a choice of five insurance repositories to choose from.
There is no extra charge for this and it will give you the benefit of a policy in electronic or demat form.
This will allow you to access information such as net asset value, bonus, claim, loan, nominee, premium payment status, premium calendar, annual statements, etc, on your laptop or even mobile (some IRs have launched mobile apps).
The Insurance Regulatory and Development Authority (Irda) is currently running a pilot project, until end-August, where all life insurance companies have to tie up with all five IRs and convert a minimum of five per cent of the existing life insurance policies into electronic form.
In addition, insurance companies have to issue five per cent of the new policies they sell during this period in electronic form.
Until now, it was not mandatory for insurance companies to tie up with all IRs. However, the pilot project is expected to address that issue.
Benefits of EIA
The biggest advantage is that policyholders do not have to pay any additional charges for the EIA.
The expenses of tying up with the IR and providing these facilities will be borne by the insurance company.
Once the policy is in electronic form, you don't have to worry about policy papers getting misplaced or lost.
You can use the EIA for viewing multiple policies, making online premium payments, updating any change in address, keeping track of complaints and grievances.
Other than digitising documents, IRs can also help insurance companies by taking on tasks such as call reminders for premium payment, data analytics, disaster recovery services and so on.
For companies in the long run, it will make it easier to contact customers (to follow up on premium payment) and this will in turn improve persistency, says an official from HDFC Life. The company has tied up with three IRs -- NSDL, CDSL and SHICL -- and is in the process of signing up with two more IRs.
Challenges for digitisation
The biggest challenge is the mindset because it is a new concept, says Viiveck Verma, executive director, Karvy Insurance Repository.
"Insurance companies may feel it is not worth investing the additional money to tie-up with IRs. Policyholders feel that even if they are not being charged now, they may be charged later on. But that is not the case.
"IRs get paid by insurance companies and insurance companies will see benefit in terms of lower cost of servicing," he says.
Karvy has so far tied up with 19 life insurance companies.
Five more are yet to tie up, and these include Life Insurance Corporation, the biggest in the segment.
Currently, policy administration charges are around Rs 150.
After digitisation, these charges will come down dramatically, which will get passed on to customers, says P Nandagopal, managing director and CEO, IndiaFirst Life Insurance, which is yet to tie up with all the five IRs.
"But the process is still cumbersome. Insurance products have massive paperwork compared to other financial paperwork.
Why insurance firms are unable to sell more policies
Why replacing your life insurance policy might get tougher
Why replacing your life insurance policy might get tougher
Analysis: Toilet speech for the greater national change
LIC questions Cairn's $1.25-bn loan to parent