With new norms for health insurance in place now, policyholders will find the claim-settlement procedure much easier and the cover much more transparent. If the policyholder makes a claim in any particular year, the cumulative bonus accrued will be reduced at the same rate at which it is accrued. Insurers, however, will not give any cumulative bonus on benefit-based policies such as critical illness.
The Insurance Regulatory and Development Authority (Irda) has made it mandatory that all health insurance policies provide entry age of up to 65 years and don’t have any exit age for renewal of the policies after the proposal has been accepted, provided the policy is continuously renewed without any break. Insurance companies will not be allowed to load charges on an individual medical insurance policy that is being renewed, even if the policyholder has made a claim in a particular year.
Life insurance companies can offer long-term health products, but the premium will have to be the same for at least three years. However, general insurance and standalone health insurance companies can offer individual health products with a minimum tenure of one year and a maximum of three years, provided that the premium remains unchanged.
All group health insurance policies will be one-year renewable contracts.
The new norms have clarified that deductible is a cost-sharing requirement. A deductible will not reduce the sum assured and insurers will have to define whether the deductible will be applicable per year, per life or per event, and how the specific deductible will be applied.
All claim documents submitted by a policyholder to a third party administrator (TPA) will be in electronic format, and in case of claim rejection, the TPA will have to clearly state the reasons. Insurers and TPAs will have to establish a separate channel to address health insurance claims and grievances of senior citizens. Companies will also have to disclose the premium to be charged from senior citizens upfront, to make it transparent.
Medical expenses incurred immediately after discharge from hospital will be covered, provided such expenses are incurred for the same condition for which the insured was hospitalised, and the hospitalisation claim has been admitted by the insurance company.
To make health insurance policies transparent, the insurer will have to mention details about the terms of renewal, coverage and the premium applicable as per the age progression of the policyholder. The insurer will also have to disclose the maximum age up to which the renewal would be available in case the product is offered to specific age groups and the option available to migrate to other policies.
Also details of specific circumstances where premium could be loaded or discount withdrawn by the insurer will have to be mentioned in the policy document. If the insurer wants to withdraw a product, it will have to take Irda’s approval by citing reasons and complete details of how existing policyholders would be treated. Existing customers will have to be given an option to switch to a similar product.
All health insurance policies will have a free-look period of at least 15 days from the date of receipt of the documents to review the terms and conditions. If the policyholder has not made any claim during the free-look period and wants to return the policy, then a refund of the premium paid, minus any expenses incurred by the insurer on medical examination and stamp duty charges, would be made by the insurer. Also, in policies where the risk has already commenced and the policyholder wants to return the policy in the free-look period, then the insurer will deduct charges for the proportionate risk premium for the period of the cover. Also, in case of an unit-linked health insurance policy, in addition to the risk premium, medical examination and stamp duty charges, insurers will repurchase the units at the price of the units on the date of the return of the policy.
After receiving documents, the insurer will have to settle claims within 30 days. The insurance company will have to stipulate a time limit by which claims and documents should be furnished by the policyholder. And if there is any delay in the filing of documents, the insurers will not turn down the claims, unless the delay was deliberate.
To address the growing need of non-allopathic treatments, insurers will also have to cover alternative medicines, provided such treatment has been received at a government hospital or in any institute recognised by government.
All health insurance policies will allow access for treatment in hospitals across the country that aren’t part of the network hospitals, except at unauthorised hospitals. Analysts say the new norms will enable the development of a robust consumer-friendly and reliable health insurance system in the country.