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This article is written by Sonal Gupta, pursuing a Certificate Course in Introduction to Legal Drafting: Contracts, Petitions, Opinions & Articles from Lawsikho.com.

Introduction

The Indian travel industry is one of the largest travel industries in the world. As per the reports around 36% of Indians are found travelling for some of the other purposes within and outside the country. Hence, it becomes a necessity to ensure the security and safety of all the trips undertaken. It is the need of the hour to protect the trips by providing suitable financial coverage against the contingent and unforeseeable events. 

Although there are multiple travel insurance products available in the market for the travellers, where each product has its own distinct identity and provides several benefits which offer a variety but, at the same time choosing the right product to cover the travelling risk turns out to be the most difficult decision one could make. This is where the need to have a sustainable and suitable domestic travel insurance product emerges. 

This article will focus upon the meaning of standard domestic travel insurance products, what are the 5 plans which are included under the product, an overview of the guidelines with special focus upon certain relevant provisions and the additional benefits which form the part of the product as per the guidelines.

What is a standard domestic travel insurance product?

The Insurance Regulatory and Development Authority (IRDAI) of India has introduced certain guidelines regarding the standard domestic travel insurance product, which is commonly known as “Bharat Yatra Suraksha”. This product has to be necessarily offered by the insurers from 1st July, 2021. This product is purely based on providing coverage with regard to expenses with regard to hospitalisation, death, permanent partial or complete disablement incurred due to an accident for travel modes like taxi, bus, ship, train and airplane within the country. 

As the name suggests it only covers the expenses due to any casualty arising out of standard domestic travel. This product is necessarily designed keeping in mind the uniform features of the travel insurance coverage, in order to meet the most common requirements of the passengers. These guidelines shall have uniform access to the market. 

The additional services which can be provided by the insurers along with this product shall go hand in hand and only as mentioned in the guidelines. The insurers under these guidelines are provided with the freedom to choose and decide upon the premium in relation to the product they are providing in compliance with the norms detailed and specified under IRDAI (Health Insurance) Regulations, 2016 and guidelines mentioned thereunder.

This travel insurance product is developed for the ease of travellers. There are various insurance products available in the industry which are related to travel but are distinct in some or another way. Hence, there was the need to have a standard domestic travel product that covers almost all the benefits under one single umbrella. It has converted the difficulty of choosing the right travel insurance product into an easy one. 

This product will cover the hospitalisation expenses incurred due to an accident where the sum benefits will range from Rs. 1 – 10 lakh. The coverage provided as per this product in the case of accidental death, permanent total disability, permanent partial disability, repatriation of mortal remains and automatic trip expansion is from Rs. 1 lakh – 1 crore. It also certainly involves various kinds of additional benefits to be offered by insurers.

What are the 5 plans under the product?

The standard domestic travel insurance product comprises 5 plans in total. All the plans along with their details are listed below:

SI.No

Name of the Plan

Purpose of the Plan

1.

Plan A

It will cover the travel for the distance of up to 100 Km from the place of origin through the mode of cab or bus.

2.

Plan B

It will cover the travel for the distance which is beyond 100 km from a place of origin through the mode of cab or bus.

3.

Plan C

It covers travel only through train (on the basis of reservation/ reserved tickets).

4.

Plan D

It only covers travel through airplanes.

5.

Plan E

It covers all the travels through multiple modes of common transport or anyone such as bus, taxi cab, train, air travel or ship.

Note – All the plans mentioned above are valid only for a single journey whereas, Plan E is valid for 30 days.

Overview of the guidelines by IRDAI

  1. The guidelines clearly state that there shall be only one single premium payment and which is to be collected in advance by the insurers.
  2. The standard product shall be distributed amongst all including the salesperson and in the common public service centres but, such distribution through online platforms is not mandatorily to be done or issued by the insurers. The distribution of the standard product shall be governed through the respective distribution channels. The coverage provided as per the guidelines is purely based upon the indemnity and benefits to be provided shall be according to the respective guidelines.
  3. The guidelines impose no age restrictions with respect to maximum and minimum age under the introduced policy. 
  4. Individuals and groups both will be equally eligible to avail this product. In the case where this product is availed by the family, then in that case the chosen sum shall be applicable to each and every member of the family separately. 
  5. As the product is to be availed as per the journey and trips, therefore the policyholder’s shall not be allowed to renew the availed policy under the product. Whereas, the extension upon the payment of the required premium is permitted. There will be no concept of co-payment under the product but the insurers have been permitted to apply certain deductibles. Co-payment is a procedure of cost-sharing by the policyholder which is equivalent to a certain percentage of the claimed amount, whereas, on the other hand, the deductible is the certain amount that the policyholder or the insured must pay on their own before the insurance provider pays for the policy coverage. 
  6. Only under Plan-E: Domestic trips of the standard product shall be extended subject to the request of the policyholder should there be an extension of the duration of the trip. Request for an extension for policy to be submitted at least 3days before completion of the term of the existing policy. Under Plan-E: Domestic trip, where the tenure of the policy is for less than or equal to 7days, the policy can’t be cancelled once the Insured journey is commenced. Cancellation of the policy insured is permitted only in cases where the tenure of the policy is more than 7 days under the plan.

“In the market today, there are a plethora of products that have different coverage, add-ons, and are mostly structured differently. Standardization of the travel insurance product will provide the policyholder with certainty in terms of how the insurance policy is administered, interpreted, how will the claims be paid, etc. And when it comes to making a choice among the already available products, a buyer can decide based on the brand, the price, and the servicing experience” said Sanjay Datta, chief-underwriting, claims and reinsurance, ICICI Lombard General Insurance.

The concept of additional benefits

The additional benefits provided under provision 9 of the guidelines are optional in nature and can be included as services by the insurers along with the standard domestic travel insurance product. The following additional benefits are as follows:

1. Compassionate allowance

In this case, the minimum coverage is Rs. 10,000 whereas, the maximum coverage reaches the limit of Rs. 1,00,000. This coverage is purely indemnity based. It is the same for the plans except for Plan A under the product and includes no deductibles.

2. Missed flight connection

In this case, the minimum coverage is Rs. 2500 whereas, the maximum coverage reaches Rs. 50,000. This coverage is also purely indemnity based. It is only applicable on Plan D and Plan E and includes no deductibles. 

3. Loss of checked-in baggage (applicable only for air travel)

In this case, the minimum coverage is Rs. 2,000 and the maximum limit of coverage reaches Rs. 20,000. This coverage is a benefit based and includes no deductibles. It is applicable only on Plan D and Plan E of the said product.

4. Trip delay (applicable only for air travel)

In this case, the minimum coverage is Rs. 500 whereas, the maximum limit of the coverage reaches up to Rs. 5,000. This coverage is benefit based and includes a deductible of 3 hours. It is only applicable on Plan D and Plan E of the product.

5. Carrier cancellation (only in case of air travel)

In this case, the minimum coverage provided is Rs. 2500 whereas, the maximum limit reaches Rs. 50,000. It is also purely benefit based coverage and includes no deductibles. It is only applicable for Plan D and Plan E of the product.

6. Trip cancellations and interruptions

In this case, the minimum limit of coverage provided is Rs. 20,000 whereas, the maximum limit of the coverage provided is Rs, 1,00,000. It is solely based on the indemnity and the deductibles included is of Rs. 10,000. It is only applicable for Plan E of the product.

Need to have a standard domestic travel insurance product

Before this insurance product came into existence, no travel insurer offered such benefits in one plan. Travellers had to choose different plans for different benefits which were eliminating the basic idea of introducing the concept of insurance in the tours and travels industry. Such difficulty was somewhere, demoting the domestic travel because of the fear of risk. Hence, this product has eliminated the maximum risk and circumstances a traveller might go through once the trip is planned. A few reasons and advantages of having this product are given below:

  • Covers maximum risk,
  • No age limitations,
  • Provides coverage not only to an individual but, also to a group of people,
  • Low premiums,
  • Provides quality benefits,
  • Ensures safe and secured travel.

Conclusion

Guidelines laid down by IRDAI regarding the standard domestic travel insurance product, seems to be an umbrella under which all the benefits are included with regards to the people availing the product. In the times of Pandemic where the trips planned are so uncertain, that they might get cancelled at any particular point of time, their introduction of such a product providing a huge range of benefits is a boon to the travellers. It involves no restrictions and covers the maximum foreseeable and unforeseeable situations which may arise out of a planned trip. 

Hence, this initiative taken by the government of India will serve as a solution to major problems encountered by travellers and will promote domestic travel and tourism by minimising the risk factor.

References


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