Ten Updates Made by the IRDAI in the Health Insurance Sector

For the longest time, buying health insurance was not something everyone considered. The insurance industry levied premiums as they pleased, making one take their chances with hospital bills. The sector had total control over the coverage they wished to offer and the premiums they wanted to charge. But it all changed when the Insurance Regulatory & Development Authority of India or IRDAI stepped in.

The IRDAI battled on behalf of the common man and got the insurance sector to put an end to their bullying. It reasoned that policyholders would pay a certain premium, and the insurance provider would manage the medical expenses. While it was a significant development, the IRDAI somehow lost its effect in the past few years. However, the body has now introduced ten changes or updates in the Insurance sector in India. They are as under:

Insurance providers must make provisions for instalments

Health insurance premiums are anything but pocket-friendly. It is not at all easy to pay the insurance premium in a lump sum, especially if one’s means and sources of income are limited. A high premium can massively affect the monthly budget of such people. Keeping this in mind, the IRDAI has made it possible for people to pay their insurance premiums in instalments. You may pay your premiums in monthly, quarterly and half-yearly payments. However, there is a catch. The free-look period for people opting for monthly or quarterly premiums will be less when compared to those opting for half-yearly or annual premium payment.

Changes in the eligibility criteria

As per previous rules of health insurance, one could be eligible for insurance cover if they belonged to the age group of 18 and 65 years. One had to pay higher premiums upon crossing the age of 65 years. Some insurers even reserved the right to cancel insurance after customers turned 65-75 years. However, as per the new updates, one can enjoy lifelong renewability, without worrying about their insurance getting cancelled.

The IRDAI has revised the limits for sums assured 

Every health insurance policy comes with a minimum, and maximum limit on the sum insured. The IRDAI has changed the minimum limit to ₹100,000 and the maximum limit to ₹500,000. 

Critical illnesses are to be included

Individuals suffering from neurodegenerative or psychological disorders, mental illness and genetic problems could not seek treatment for the same under their health insurance plans. But with the new updates mandated by the IRDAI, insurance providers may not exclude the treatment of these diseases.

The IRDAI has drafted a new list of exclusions

Every health insurance policy cannot offer complete coverage for all kinds of illnesses as it can put a substantial financial burden on the insurance sector. Keeping this in mind, the IRDAI has updated its list of diseases that are excluded from coverage under health insurance. As per the update, people suffering from 16 major illnesses, most prominently conditions such as epilepsy and chronic kidney problems, among other things, may not seek treatment for the same under their health insurance policy. Health insurers are not liable to provide services for these treatments.

Changes in terms of pre-existing illness policies

People suffering from pre-existing diseases can get health insurance. However, such people could not file claims for treatment for those diseases until they completed a minimum waiting period of three to four years. During this time, the insurer was not obligated to provide coverage for the pre-existing period until the waiting period was over. In fact, the disease was not included in the policy until the end of the waiting period. However, as per the updates mandated by the IRDAI, if one is diagnosed with a disease within three months of purchasing insurance, the insurance provider is mandated to note it. They must then include coverage for the disease in the policy instead of implementing the waiting period on the policyholder. 

The IRDAI has revised the free-look period

According to the new rules proposed by the IRDAI, policyholders will get 15 days (from the policy purchase date) to review their insurance policy and the terms and conditions mentioned in it. If they are dissatisfied with the plan, they must cancel it within the 15 days.

Insurers must provide a grace period to pay insurance premiums

The IRDAI has directed insurance companies to give a few days to their customer to pay their insurance period if they are unable to pay them, before the policy expires. Insurers must provide a grace period of 15 days for policyholders opting for instalments and 30 days for those opting for semi-annual and annual payments.

The IRDAI has updated the waiting periods on various diseases

The final update made by the IRDAI is concerning the waiting periods on diseases. It has created two new timelines for waiting periods. As per the IRDAI, diseases will now be divided into 24 months waiting periods and 48 months waiting period. For instance diseases like cysts, pilonidal sinus etc., are covered under the 24-month waiting-period and treatment for joint-replacement is covered under the 48 month waiting period (unless the procedure is needed due to an accident or age. 

IRDAI has mandated that insurers must provide clear reasons for rejecting claims

Many people have claimed that insurance companies often cite irrelevant or fake reasons to deny insurance claims. The IRDAI has considered this and created a protocol that all insurance providers must follow. It has created a chart featuring 18 codes which every insurance provider is mandated to follow while assessing claims. 

Final word: As per the IRDAI, every insurance provider is mandated to adopt these updates in the policies by October 2020. Also, insurers, who have launched new plans in October 2019, are mandated to implement these updates right away. At the onset, it must be said that the changes proposed by the IRDAI look positive and may well work for the welfare of both the insurance sector and its customers.  

Source: Money Control