IRDAI Unveils Game-Changing Health Insurance Rules for a Customer-First Future

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IRDAI Unveils Game-Changing Health Insurance Rules for a Customer-First Future

June 2, 2024 – Taking another step towards "Insurance for All by 2047," the Insurance Regulatory and Development Authority of India (IRDAI) has released new guidelines to make health insurance policies more inclusive, flexible, and customer-friendly. These rules, aimed at empowering policyholders, address key aspects of health insurance coverage. Let’s delve into the details.

Higher Refund on Cancelling Health Insurance Policies

  • Pro-rata Refund: Policyholders can now cancel their health insurance policy at any time and receive a refund of the premium on a pro-rata basis, provided no claims have been made.
  • Reduced Notice Period: The notice period for policy cancellation has been reduced from 15 days to just 7 days.
  • No Administrative Fees: There are no additional administrative fees or penalties for cancellation, simplifying the process for policyholders​​.

No-Claim Bonus for Health Insurance: Options to Reduce Insurance Premium

  • Traditional No-Claim Bonus: Typically, auto-insurance plans offer a no-claim bonus by reducing the renewal premium if no claims were made in the previous year.
  • Health Insurance Bonus Options: For health insurance policies, insurers usually increase the sum insured at renewal if no claims were made.
    • Cumulative Bonus: The sum-insured amount will increase without a hike in the premium amount.
    • Discounted Premium: Insurers can offer a reduced premium for policyholders who haven’t made any claims​​.

Transparency in Premiums for Senior Citizens

  • Fair Premiums: The premiums charged to senior citizens must be transparent and fair.
  • Reduced Financial Strain: This ensures that older policyholders are not burdened with excessive costs and can access health insurance without financial strain​​.

Simplified Customer Information Sheets (CIS)

  • Enhanced Transparency: Health insurance companies, middlemen, and agents must provide simplified customer information sheets (CIS) for health insurance policyholders.
  • Foster Trust: These CIS documents aim to foster trust, reduce grievances, and enhance transparency in the insurance process​.

Key Changes Introduced by IRDAI

Inclusion of Previously Excluded Illnesses

  • Expanded Coverage: Mental illnesses, genetic disorders, and neurodevelopmental disorders are now covered.
  • Specific Conditions: Conditions such as autism, cerebral palsy, and speech disorders are included, offering comprehensive protection to a broader range of health conditions​.

Proportionate Deduction Adjustments

  • Exclusion of Certain Costs: Pharmacy expenses, medical implants, and diagnostic tests are excluded from proportionate deductions.
  • ICU Admissions: The concept does not apply if hospitals do not have different room rent categories or if the insured is admitted to the ICU.

Standardization of Policy Clauses

  • Enhanced Comparability: IRDAI mandates the standardization of critical policy clauses to enhance transparency and comparability across different insurance products.
  • Simplified Documents: Simplified policy documents help customers understand and compare the terms and conditions of various health insurance plans​.

Telemedicine Coverage

  • Inclusion of Telemedicine: Health insurance plans now cover telemedicine consultations if they include coverage for doctor consultations.
  • Remote Access: Ensures policyholders can access medical advice remotely, maintaining safety and convenience during times of restricted physical movement.​.

Payment Flexibility for Premiums

  • Installment Payments: Policyholders can choose to pay premiums in monthly, quarterly, half-yearly, or annual installments rather than in a lump sum.
  • Increased Accessibility: This flexibility is expected to make health insurance more affordable and accessible.​.

Coverage for Risky Sports and Hazardous Activities

  • Expanded Sports Coverage: Risky sports like dirt biking, paragliding, and white-water rafting, as well as ethnic sports such as Jallikattu, will now be covered.
  • Inclusive Policies: Reflects IRDAI's commitment to providing comprehensive coverage that aligns with modern lifestyles..

COVID-19 Specific Health Plans

  • Targeted Plans: Introduction of plans like Corona Kavach and Corona Rakshak, providing comprehensive coverage for COVID-19 related hospitalizations.
  • Short-Term Coverage: These plans are available for short-term periods, meeting the immediate needs during health crises​.

Online Sales and Virtual KYC Verification

  • Digital Sales: Promotion of online sale of insurance plans for safe and convenient purchase.
  • Virtual KYC: KYC verification can now be completed online through video calls or by uploading documents, simplifying the buying process​.

Limitations on Claim Rejections

  • Claim Rejection Rules: Limitation on claim rejections after eight years of continuous coverage.
  • Long-Term Protection: Insurers cannot deny claims based on pre-existing conditions if the policy has been in force for this duration​.

Key Highlights of the News

AspectDetails
Higher Refund on Cancelling Policies- Pro-rata refund of the premium if no claims made.
- Reduced notice period from 15 to 7 days.
- No additional administrative fees or penalties for cancellation.
No-Claim Bonus Options- Cumulative Bonus: Increase in sum insured without premium hike.
- Discounted Premium: Reduced premium for policyholders who haven’t made any claims.
Premiums for Senior Citizens- Transparent and fair premiums to reduce financial strain on older policyholders.
Simplified Customer Information Sheets (CIS)- Simplified CIS documents to enhance transparency and reduce grievances.
Inclusion of Previously Excluded Illnesses- Coverage for mental illnesses, genetic disorders, and neurodevelopmental disorders.
- Specific conditions like autism, cerebral palsy, and speech disorders included.
Proportionate Deduction Adjustments- Exclusion of costs such as pharmacy expenses, medical implants, and diagnostic tests from proportionate deductions.
- Not applicable for ICU admissions.
Standardization of Policy Clauses- Mandated standardization for enhanced transparency and comparability across different insurance products.
Telemedicine Coverage- Inclusion of telemedicine consultations in health insurance plans if doctor consultations are covered.
Payment Flexibility for Premiums- Option to pay premiums in monthly, quarterly, half-yearly, or annual installments.
Coverage for Risky Sports and Hazardous Activities- Coverage for risky sports like dirt biking, paragliding, and white-water rafting, as well as ethnic sports like Jallikattu.
COVID-19 Specific Health Plans- Introduction of Corona Kavach and Corona Rakshak plans for comprehensive coverage of COVID-19 related hospitalizations.
Online Sales and Virtual KYC Verification- Promotion of online sales of insurance plans and virtual KYC verification through video calls or document uploads.
Limitations on Claim Rejections- Limitation on claim rejections after eight years of continuous coverage for pre-existing conditions.

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