To reduce mis-selling of life insurance products and improve transparency, IRDAI (Insurance Regulatory and Development Authority of India) has instructed insurance companies to include a "benefit illustration" at point of sale (POS) for their products.

Starting 1 December 2019:

• Insurers should carry illustrations as per standards set by the regulator which should include a clear description to distinguish guaranteed benefits from non-guaranteed benefits and state that the quantum of benefits under non-guaranteed category may vary.
• These are to be provided to proposers or policyholders at the point of sale for all life insurance products except for those under IRDAI (Micro Insurance) Regulations 2015, Guidelines on Point of Sales (POS)- Life Insurance Products 2016 and IRDAI (Insurance services by Common Service Centres) Regulations 2019.
• The benefit illustration will have to be signed by prospective insurance policyholder and agents or other authorised intermediaries involved in the sales process.
• The illustration will form a part of the policy document.
• All illustrations will have to be approved by appointed Actuary and the Chief Executive Officer / Principal Officer.
• In the case of digital sales, all terms and conditions are to be displayed on the main screen instead of being hidden behind hyperlinks.

The circular dated 26 September addressing CEOs of Life Insurers included some other directions with regard to other market conduct aspects as well and said that the changes were needed considering that life insurance is a long term financial instrument requiring meaningful and timely disclosures in its sales process.