Irdai Unveils New Rules To Make Health Insurance More Inclusive

Irdai’s new rules look to make insurance more inclusive by decreasing waiting periods and abolishing the maximum entry age.
Irdai’s Unveils New Rules To Make Health Insurance More Inclusive
Irdai’s Unveils New Rules To Make Health Insurance More Inclusive

The Insurance Regulatory Development Authority of India (Irdai) had proposed to raise the surrender value for endowment plans in December, but they reverted to the status quo after a pushback from the industry.

While that would have come as a dampener for policyholders. However, some other health insurance product rules that have been changed can be positive for policyholders.

Let us take a look.

Decrease In Moratorium Period: When buying an insurance policy a policyholder is expected to disclose relevant details, especially regarding any pre-existing disease. Earlier, in case there was no fraud life insurers could not reject such claims only after a period of eight years. Now, such claims become incontestable after a period of five years and an insurance company cannot deny a claim citing non-disclosure of pre-existing illness after a period of five years has passed since the policy has been purchased.

Decrease Of Pre-Existing Period From Four To Three Years: If you have a pre-existing disease like diabetes, the insurance policy will not cover you from the beginning. There is a period known as a waiting period. Waiting periods for pre-existing diseases would normally be between two to four years earlier. Now, the maximum waiting period has been brought down to three years. So, even if you have a pre-existing disease and have declared it when taking the policy, you can make a claim after the third year. While this is good news, it may drive up the cost of insurance. “As per Irda mandate, waiting periods are capped to a maximum of three years from the current four years which will see most insurers increasing the cost of insurance to all customers in the range of 10-15 per cent,” says Rupinderjit Singh, vice president- retail health at ACKO.

Abolishing Maximum Entry Age: As per earlier guidelines, an individual could purchase a new insurance policy till the age of 65. However, in the recent gazette notification, Irdai said, ‘Insurers shall ensure that they offer health insurance products to cater to all age groups.’ This means that even people above the age of 65 can purchase new insurance policies.

“The new order by Irdai is another instrumental move for the insurers as it will increase the eligible base of customers who can purchase health insurance due to the inclusion of this cohort. Some of the insurers earlier were keeping a higher age capping for customers to buy health insurance. This move will bring more competition and transparency in the above 65 years category,” says Singh.

“The new regulation intends to make health insurance even more inclusive, especially for senior citizens, persons with disabilities, persons with chronic ailments, etc. This will encourage more citizens to opt for health insurance. Operational guidelines are however awaited,” says Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance.

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