Health insurance: 10 new rules you should know3 min read . Updated: 01 Jan 2020, 06:54 AM IST
- IRDAI has allowed policyholders to pay health insurance premiums in installments
- Buyers will have the option to choose a TPA of their choice
From monthly premium installments to the option of choosing third-party administrators (TPA), health insurance has recently witnessed a host of changes. Insurance Regulatory and Development Authority of India (IRDAI) aims to make health insurance policies customer-friendly and more standardized. Commenting on IRDAI's year-long changes on health insurances policies, Prasun Sikdar, MD & CEO, ManipalCigna Health Insurance, said "The standardization of health insurance is expected to bring uniformity in interpretation as well as simplification, and ease of understanding of policies. This would go a long way in reducing grievances in the industry."
Let's take a look at the significant changes in health insurance policies:
1) For the first time in the history, IRDAI has allowed policyholders to pay health insurance premiums in installments. Now, one can pay insurance premiums on monthly, quarterly or half-yearly basis. However, the free-look period for monthly or quarterly premiums will be lower than what you get while paying annual premiums.
2) The regulator has made changes to cover existing health conditions in favour of policyholders. IRDAI asked insurance companies to mention pre-existing diseases, which would not be covered up to a specified period of not more than 4 years from the start of the coverage with the firm.
Customers now has the option of declaring any disease contracted up to three months after taking the policy.
3) IRDAI has allowed insurers to increase the maximum age limit filed for insurance policies. Usually, the maximum age limit of health insurance policies filed is up to 65 years. The insurer needs to inform the regulator on a certification basis about the change, said IRDAI.
4) Insurance regulator Irdai mulls barring insurers from excluding several critical illnesses such as mental problems, genetic diseases, neuro-development disorders and psychological disorders from health insurance policies. "Treatment of mental illness, stress or psychological disorders and neurodegenerative disorders," should not be included in exclusions listed in the policy.
5) IRDAI has also asked insurers to increase the maximum age limit criterion for health insurance policies. Usually, the maximum age limit of health insurance policies is up to 65 years. The insurer also has an option to decrease the minimum age for insurance policies.
"A customer with age of 60 and above will have to pay a relatively higher premium amount, this could cause a strain in the finances," said Sanjay Datta, Chief – Underwriting, Claims, Reinsurance and Actuary, ICICI Lombard General Insurance Company Ltd.
6) Health insurance companies can increase or decrease premiums by 15%, caused due to the modifications, based on the loss-ratio numbers of the last three financial years, IRDAI said.
7) IRDAI said change of premium rates resulting in an increase should be only after expiry of three years from the date of launch of approved or modified individual product. "Change of premium rates resulting in the increase shall be only after expiry of three years from the date of launch of approved or modified individual product," said IRDAI.
8) IRDAI has recently asked health insurance companies to provide a list of TPAs to policyholders at the time of selling a policy. Buyers will have the option to choose a TPA of their choice. However, policyholders are only allowed to change a TPA at the time of renewal. The insurer may also limit the number of TPAs based on the health insurance product and geographical location of the policyholders.
"Health insurance consumers had an eventful 2019, as they were presented with better health insurance policies, wider coverage for their pre-existing illnesses, and ease in premium payment options. Interestingly, several changes in the conditions of coverage for existing health conditions has been done in favour of policyholders," said Prasun Sikdar, MD & CEO, ManipalCigna Health Insurance.
9) Health insurers are allowed to introduce additional distribution channels for particular products. The insurance companies do not have to wait for regulator's approval. They can make minor modifications in approved individual insurance products on a certification basis.
10) With a slew of changes in the 2019, insurance companies have improvised its services for customers by adopting cutting edge technology. It is likely to get momentum in 2020, said Sikdar, ManipalCigna Health Insurance.