Many people holding insurance policies have been receiving mailers from NSDL to opt for an e-insurance accounts, where all the policies can be held in a single account in a demat form. "A small decision may go a long way" is what these mails say. So should one make this decision? Let us first understand what this account is and how it works.

About a year ago, IRDA formally launched the Insurance Repository System, which allows a person to demat all his insurance policies and hold it in a single account. There are five repositories approved by IRDA – NSDL, Central Insurance Repository, SHCIL Projects, CAMS, and Karvy. An individual can have only a single e insurance account and all policies across different insurers can be consolidated in this account. It is quite similar to having your shares in a demat account. The account can be opened free of cost by filling out the application form and submitting it to the insurance repository online or offline, along with the necessary documents. Once the e-insurance account is opened one can get existing paper policies converted into electronic ones by placing a request with the insurer or the repository.

There Paper are definitely certain advantages of having an e-insurance account.policies can easily get misplaced or damaged. Getting a duplicate policy is often a cumbersome process. Electronic policies do not run the risk of being lost or damaged.

Many people have multiple policies and often find it difficult to keep a track of them. Since all policies are in one place, in the e-insurance set up, it is much easier to keep track of them.

Rather than running to different insurers for service issues, the repository would act as a single point of contact for policyholders. Routine services issues such as updating personal details change in address, change in nominations etc., can be handled by the insurance repository.

In a few cases, it is possible that family members may not have an idea about the number of and the type of insurance that people hold. In case of their untimely demise, the family may find itself in a limbo. Insurance is of little use to a family if they are unaware of its existence. Since an e-insurance account is a single account in which all policies are held, the family can be informed about all policies and would have better access in case of any eventuality.

If one holds an e-insurance account, any new policy can be bought in the electronic form. One need not go through the process of KYC repeatedly, since the insurance repository already has all the details. The new policy issued would be added to the e-account.

Opening an e-insurance account is free. All other services provided by the repository – such as address change in the contact details, policy related changes, etc., are also free.

Given its several advantages, it makes sense to open an e-insurance account with any of the repositories, and transfer all existing policies to it. It may be a small step, but by going paperless, you are helping the environment as well. So why not opt for it?

Neeti Sethi, ACA CFPCM, is a Partner at Acumoney Consulting LLP and heads the Financial Planning and Investment Advisory vertical.

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