A Working Group,  constituted by the IRDAI, under Suresh Mathur, executive director, IRDAI,has recommended that the general and health insurance companies may be allowed to offer the option of payment of claims in installments or in lump-sum upon happening of a contingent event in cases of Indemnity products that have a fixed component, as well. For example specific illness (like cancer) based product that has both fixed benefit and indemnity components.


The IRDAI had constituted the Mathur panel as earlier,various general/ health insurance companies had proposed to provide an option for payment of claim benefits in respect of Personal Accident (PA)/ Benefit Based Health insurance policies in installments.


The installment option may be offered for claim above a certain threshold limit only.The option of receipt of claim amount in lump-sum or installments is to be exercised by the policyholder at the time of proposal.


Specifying a cap on the maximum number of claim installments that would help in ensuring uniformity across the industry. the panel has recommended that the claim payment period can be capped up to a maximum of five years as per the needs of the target customers.The installment facility may also be available for fixed benefit riders/ add ons attached to the indemnity policies.


According to the panel, the provision of getting the claims in installments or lump-sum is a decision that should be taken by the policyholder and not the insurance company. An explicit consent shall be taken by the insurer from the insured. It should be in addition to the lump-sum payment option and shall be allowed based on the option exercised by the policyholder. Combination of both the options i.e. lump-sum payment and in installments may be offered as part of the product design.

Further, as the needs of the policyholders are dynamic in nature, it is ideal that the policyholders have an option of altering the mode of receipt of payment of claims from lump-sum to installments and vice versa during the policy duration and also at the time of claim.


The periodicity of the installment can be either monthly or quarterly or bi-annual or annual basis as per the product design.