Should You Keep Physical Copy Of Your Life Insurance Policy?

All life insurance policies post-April 1, 2024, must be issued to customers digitally, even though many insurers have been doing it for some time as mandated by the Insurance Regulatory and Development Authority of India (IRDAI). The move aims to protect the policyholders' interests and enhance convenience; however, the physical policy copies are still available upon request.

So, should you keep a physical copy of your policy document or is the digital format enough?

Says Casparus J.H. Kromhout, managing director and chief executive officer of Shriram Life Insurance Company: “An electronic document of the policy bond issued by the insurer in many cases is considered legal and valid for all future purposes. Many insurers now offer easy digital access to policy documents, making it convenient for customers. Further, with facilities like an e-insurance account, storage and retrieving of these policies have become simpler.”

Although digital papers are easy to retrieve, don’t need physical storage space, or have the threat of theft or damage, this option may be limited to some people, like senior citizens, since unless they have some knowledge of the digital space, they may find the other option more convenient.

Adds Kromhout, “Keeping a physical copy of your life insurance policy might seem old-fashioned, but some customers still consider it a vital backup in case of technical issues or data loss and in some cases prefer a hard copy as ‘physical’ evidence. Combining physical and digital records ensures you have the best of both worlds—security, and convenience. It’s all about making sure customers have the peace of mind, with the most modern tools at their fingertips.”

Narendra Bharindwal, vice president of the Insurance Brokers Association of India (IBAI), says, “For many, the ability to physically hold and review a document reinforces its importance and may encourage closer scrutiny of the policy terms. Digital may be the future, but a physical copy remains a prudent backup, particularly for those less familiar with managing electronic records.”

Do Insurers Verify Information With A Physical Document For Claims?

Nowadays, the claim process is not dependent on verification with the physical policy document. Bharindwal says, “Most insurers now operate sophisticated digital systems that can retrieve all necessary information with just the policy number. The process has become more seamless, with policy details easily accessible in real-time, reducing the need for back-and-forth with claimants. While a policyholder might occasionally be asked to provide a digital copy for cross-verification, this is generally not a requirement. The broader transition to digital has streamlined claims processing significantly, allowing insurers to handle requests more efficiently.”

Under What Circumstances A Physical Document Become Critical?

For claim applications or claim settlements, a physical copy is no longer required. However, in certain situations, a physical document can be convenient or even critical. This is because digital methods are relatively new, and many people could be unsure how to pass on digital assets or when to share vital information like passwords for email accounts, etc. As a result, family members may be unaware of the investments or insurance policies held in the deceased’s name.

Bharindwal says, “Though largely redundant in most scenarios, physical documents can still prove vital in certain cases—particularly for life insurance. If a policyholder dies without sharing access to their digital records, a physical policy provides an immediate solution. Without it, families may face delays while insurers trace policy information. Additionally, some older policies, still held in physical form, may require the original document to process claims. While electronic systems are the norm, physical copies provide a safety net in instances where digital access is compromised or unavailable.”

What If The Nominee Does Not Have Access To Digital Data After Policyholder Dies?

In case of no policy information or missing policy document, the process could be time-consuming as one will have to try to get details using the deceased’s Aadhaar or other unique details. Bharindwal clarifies, “Insurers can track policy details through personal identifiers such as Aadhaar, PAN, or payment records. This ensures that a missing or lost document does not block the nominee from accessing their claim. Nonetheless, it is essential for policyholders to ensure their nominees are aware of the policy and its status. Clear communication, whether about digital or physical copies, can prevent complications during what is already a challenging time.”

So, even if the policy is old, issued in physical form, but is not accessible at the time of claim, family members can find out the details. While everyone needs to keep a record of all investments, insurance, and other assets safely and share it with a trusted family member, friend, or someone else, the details can still be found even if not shared before one dies. One can start with the bank account statement, which will give an idea of the premiums paid to which policy where the money was invested, and more.

Though having a physical copy offers satisfaction and peach of mind, a digital document is better because it is easily retrievable anytime anywhere.

Bikash Choudhary, chief actuarial and governance officer, IndiaFirst Life Insurance, says, “It’s a digital age where all activities and all documents are being created and managed digitally. There are insurance repositories that facilitate the storage of digital policy documents and in the new regulations, the insurance regulator has proposed insurers to tie up with Digilocker for storage of policy documents. While physical documents can be helpful, given life insurance is a long-term contract, it is always advisable to have a digital copy and secure it with a Digi-locker or e-repository to ease of reference to life assured as well to their nominee(s).