IRDA allows insurers to collect advance premium for policies due in next financial year

In the earlier notification, IRDA allowed advance premium collection for policies that fall due in the ongoing financial year. Know more on this earlier directive of the IRDA in relation to advance premium collection. And now further promoting customer's interest, IRDA has again in the direction notified that for the insurance policies, for which the premium falls due in the next financial year, insurers can now collect advance premium for a maximum three months in advance of the date when the premium payment falls due in the current financial year. The new notification applies to both linked as well as non-linked insurance products.

As regard the previous notification that allowed premium collection in advance for policies in the current financial year, the amount collected against the insurance policy as premium shall be adjusted on the date the premium falls due and post such an adjustment is made, agents shall be made the applicable commission.

For, ULIPs also the regulator has given a similar directive and premium adjustment as well as the units shall be allocated to the policyholder on the day when the application proposal is accepted by the insurer.

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