Soon, you may be able to buy a health insurance policy that will provide you cover till 65 years and may get a 15-day free look-in period, during which you can return your health policy, with no questions asked, according to the draft guidelines for health insurance issued by the Insurance Regulatory and Development Authority (Irda).
At present, there is no free look-in period for health insurance products.
While these may sound very lucrative for a policyholder, the reforms may come at a price. Insurers say allowing you to enter a policy contract at a late age may not be a very attractive option for them. As a result, you may have to shell out a part of your hospitalisation charge, depending on your age, says Shriraj Deshpande, head, health insurance, Future Generali General Insurance.
| POLICY CHANGE | |
| NORM: | IMPACT: |
| Health policies will be a combination of term and medical cover | Expected to find takers in those who do not have a health cover |
| Health policies should provide an entry age of 65 years, no stipulated exit age | Insurers may increase premiums by 20 per cent, apply co-pay clause for higher age groups |
| Premiums, loading charges should be disclosed upfront | Policyholders will be aware about their future insurance expense, but insurers may not be able to adhere |
| Free-look period of 15 days | Policyholders will get time to study the policy, return it if not convinced |
| Insurers cannot reject renewals onclaim experience; will have to settleclaims in 30 days | Policy renewal for those with high claim history will be easy |
| Insured can claim from multiple insurers of their choice | Policyholders will be able to use only indemnity policy, in case of a contributory clause this is not applicable |
For instance, a 55-year old could be asked to part-pay 10 per cent of his hospital bill. Insurers say you may require to co-pay between five to 20 per cent, most likely from the age of 50. This move, if the new guidelines are implemented, may make health insurance policies expensive by 15-20 per cent, across age group.
The product would be a combination of health and pure life cover having an in-built personal accident cover. Once bought, this policy can be renewed all life long.
The insurance regulator wants to make premium and its rises more transparent. If the new norms are implemented, insurers will have to disclose future premiums of your policy and the likely increases in it at the time of issuing the policy. “The premium charged for any health insurance product offered shall be fair, justified, transparent and duly disclosed upfront. The insured shall be informed of any loading on the premium,” says the draft guidelines.
Insurers, however, are not sure about being able to adhere to this norm. Explains Mukesh Kumar, head of strategic planning, human resources and marketing at HDFC ERGO General Insurance: “Say you bought a policy at age 20 and live till 90. The insurer cannot tell you when you are 20 as to what will be the hikes in premium for the next 70 years. For this, the insurer will have to take into account several factors like medical inflation, any change in the insured's risk profile, his/her income fluctuations, change in provider network, to name a few. ”
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According to Irda, the premiums shall not be increased for a period of one year since the product gets clearance.If you buy the policy at an early age, insurers will have to reward you for it, for continued renewals, favourable claims experience and so on with the same insurer. This would be mentioned in the prospectus and policy document.
Your insurer will have to provide you with a valid reason for not renewing the health insurance policy. It should not reject renewal because the insured had made a claim or claims in the previous year(s), the guidelines said.
If you buy two or more indemnity policies during a period from one or more insurers, the insurer shall not apply the contribution clause. And you will be able to chose the insurer with whom you want to settle the claim. And in such cases, the insurer shall oblige without insisting for contribution clause.
Says Amarnath Ananthanarayanan, managing director and chief executive officer at Bharti AXA General insurance: “Insurers may provide coverage to non-allopathic treatments (ayurvedic, unani, siddha, homeopathy and so on) provided the treatment is done in a government hospital or any government recognised institute and/or accredited by the quality council of India/National Accreditation Board on Health or any other suitable institutions.”