Currently, retirees submit an exit form to the NPS and a resolution form to the insurers at the time of retirement. The insurance sector regulator has also allowed insurance companies to collect annual life certificates through digital medium.
“Now, the exit form of NPS will be treated as the offer form to buy annuity, thereby reducing the time and efforts of senior citizens as well as insurers. Also, to increase the adoption of technology, insurers have been advised to adopt Aadhaar-based authentication for verification of life certificates, such as life proofGovernment of India’s initiative on Biometric-enabled digital service,” IRDAI said in a release.
The change rules will come into force with immediate effect.
NPS subscribers are required to utilize at least 40% of the total accumulated corpus to purchase an annuity plan at the time of maturity. The remaining 60% are eligible for withdrawal on retirement as a lump sum.