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KYC in Insurance
Know Your Customer, commonly known as KYC, is a process of verifying the identity and address of a customer. All financial institutions, including insurance companies, must fulfil KYC requirements to prevent fraud, money laundering, and terrorism financing. Individuals must complete their KYC before purchasing an insurance policy. Let's better understand the importance and features of KYC in insurance.
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KYC in Insurance : Meaning, Importance and Features
Table of Content
KYC Meaning
KYC is an acronym for 'Know Your Customer.' It is a process of verifying the identity and address of a customer to prevent fraud, money laundering, and terrorism financing. KYC is mandatory for all financial institutions, including insurance companies. It is a one-time process that gets completed during policy issuance.
When Is KYC Required?
KYC is required when a customer wants to purchase an insurance policy. The mandatory process helps the insurance company verify your identity and address. You must provide KYC details while filing a claim, surrendering the policy, or changing your nominee.
Importance of KYC in Insurance
KYC helps prevent fraud, money laundering, and terrorism financing. Providing KYC documents helps the insurance company verify your identity and address, ensuring the policy gets issued to the correct person. Without KYC verification, individuals can purchase policies using another person's name or details.
What Is Included in KYC Documents?
KYC documents refer to the documents that help banks and insurance companies verify your identity and address.
Identity Proof
The following documents enable banks and insurance companies to verify your identity:
- PAN card
- Aadhaar card
- Voter's ID card
- Passport
- Driving license
- Other government-issued ID
Address Proof
The following documents help banks and insurance companies verify your address:
- Electricity, telephone and gas bills
- Bank statement
- Rent agreement
- Other government-issued ID
Photograph
KYC documents include a recent passport-sized photograph.
What Are the Types of KYC?
There are two types of KYC in insurance:
Offline KYC
In this type of KYC, the customer has to submit physical copies of the KYC documents to the insurance company. The company will verify the documents and complete the KYC process.
Online KYC
In this type of KYC, the customer can complete the KYC process online by uploading the KYC documents to the insurance company's website. The company will verify the documents and complete the KYC process.
How to Do KYC in India?
You can complete your KYC online or offline in India. Let's better understand how each process works.
Offline KYC
- Step 1: Visit the nearest branch office of the insurance company.
- Step 2: Fill out the KYC form provided by the company.
- Step 3: Attach the photocopies of the KYC documents (Identity proof, Address proof, and Photograph) with the form.
- Step 4: Submit the form and documents to the company executive.
- Step 5: The company will verify the documents and complete the KYC process.
Online KYC
- Step 1: Visit the official website of the insurance company.
- Step 2: Click on the 'Online KYC' link.
- Step 3: Fill out the KYC form provided on the website.
- Step 4: Upload the scanned copies of the KYC documents (Identity proof, Address proof, and Photograph) on the website.
- Step 5: Submit the form and documents.
- Step 6: The company will verify the documents and complete the KYC process.
KYC is an essential process in the insurance industry that helps prevent fraud and verify the policyholder's identity. You must complete the one-time KYC process when you purchase an insurance policy. Insurance companies have made the KYC process simple and convenient, with the option of online and offline modes. With KYC, insurance companies can offer a secure and reliable service to policyholders, enabling you to enjoy insurance benefits without any hassles.
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Francis Rodrigues
Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.
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Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.
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**If a customer is a Salaried individual and has opted for a cover of INR 2 Cr with Limited pay, then the total discounts applicable shall be: 10% +7% = 17% discount on the first year premiums.
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15. HDFC Life Click 2 Protect Ultimate(UIN: 101N179V01) A Non-Linked, Non-Participating, Individual, Pure Risk Premium/Savings Life Insurance Plan. The policy must be in force on the date of death, with all premiums fully paid, except for the exclusion clauses mentioned in Part F of the policy document.
***Online Premium for Life Option for HDFC Life Click 2 Protect Supreme(UIN:101N183V01), Male Life Assured, Non-Smoker, salaried, 20 years of age, Policy term of 25 years, Regular pay, Monthly frequency, inclusive of 15% online discount (applicable only for 1st year premium) & exclusive of taxes and levies as applicable. (Monthly Premium of 573/30=19).
~Tax benefits of ₹ 54,600 (₹ 46,800 u/s 80C & ₹ 7,800 u/s 80D) is calculated at highest tax slab rate of 30% on life insurance premium u/s 80C of ₹ 1,50,000 and health premium (Critical illness rider) u/s 80D of ₹ 25,000. Tax benefits are subject to conditions under section 80C, 80D, 10(10D) as per Income Tax Act, 1961. Please consult your tax advisor for more information.
ARN - MC/05/23/2052
