Mumbai: Insurance regulator Irda has instructed all general insurers to give a 15-day free-look period for health insurance policies with a duration of three years to the insured.
“All health insurance policies having a duration of three or more years will have a provision that on the first inception of the policy, the insured has a period of 15 days from the receipt of the documents to review the terms and conditions of the policy,” the Insurance Regulatory and Development Authority (Irda) said in a circular.
Within these 15 days, a policyholder can return the policy, stating the reasons for his objection, if he disagrees to any of the terms or conditions, the regulator said.
If a policyholder returns the policy, he would be entitled to refund of the premium paid after a deduction of the expenses incurred by the insurer on his medical examination and stamp duty charges, Irda said.
In cases where the risk has already commenced when the option of returning the policy is exercised by the policyholder, the refund of the premium paid would also be subject to a deduction for proportionate risk premium for the period on cover.
When only a part of the risk (accidental hospitalization risk) has commenced, such proportionate risk premium shall be calculated as commensurate with the risk covered during such period.
Insurers can also voluntarily opt to provide such a free-look period even in health insurance policies of duration less than three years, the regulator said.
The provision for free-look for health insurance policies will be applicable for all policies issued or renewed on or after 1 October 2009, Irda said, adding that all general insurance companies should ensure due compliance with the provisions.
“Any failure to do so would render them (general insurance companies) liable to appropriate action under the provisions of Irda Act, 1999, the Insurance Act, 1938, and the regulations framed there under,” Irda said.