Here Is How IRDAI’s New Standardization Guidelines for Health Insurance Benefit Policy Holders

Recently, IRDAI came out with fresh set of guidelines on standardization of general terms and clauses in health insurance. The provisions of these guidelines will be applicable to the indemnity based Health Insurance (excluding personal accident and domestic/overseas travelinsurance cover) products filed as per the guidelines on or after October 01, 2020.

All policy contracts of the existing health insurance products that are non compliant with these guidelines will be modified as and when they are due for renewal from April 01, 2021 onwards.

One clause that stands out is on the moratorium period. IRDAI has ruled that health insurers cannot reject a claim after the premium has been paid for a continuous period of eight years. It defines this period of eight years as the moratorium period. After the expiry of moratorium period, no health insurance claim can be contested except for proven fraud and permanent exclusions specified in the policy contract.

The policies would however be subject to all limits, sub limits, co-payments, deductibles as per the policy contract. In case of enhancement of sum insured, moratorium would be applicable only on the enhanced limits from the applicable date.

Insurers will not be allowed to contest claims on the grounds of misrepresentation and non-disclosure. Often, health insurers reject policy claims if the insured does not provide correct information pertaining to certain pre-existing condition. Now insurance companies have been given eight years to ascertain the veracity of information provided. Beyond the moratorium, insurers cannot reject claims on the grounds of misrepresentation and non-disclosure.

[Read: Was Your Insurance Claim For A 'Pre Existing Disease' Rejected? Here's Some Good News!]

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In another major relaxation, IRDAI has allowed telemedicine to be covered under health insurance policy. Amid the coronavirus lockdown, with many people staying indoors and in cases of unavailability of medical/healthcare facilities has resulted in a growing trend of online medical consultations. It not only protects the patients from risk of exposure to the virus in crowded clinics and hospitals, but also helps protect doctors, nurses, and other medical staff from being infected.

Such consultations will now be covered under insurance policies. Medical Council of India issued 'Tele Medicine practice guidelines' on March 25, 2020, enabling registered Medical Practitioners to provide Healthcare using Tele Medicine. The provision to include telemedicine will be part of the claim settlement policy of the insurers and one does not need to file it separately with the Authority for any modification.

Some of the other terms and clauses that have been notified are as follows:

Claim settlement: The insurance company (insurer) should settle or reject a claim, as the case may be, within 30 days from the date of receipt of the last necessary document. In the case of a delay in the payment of a claim, the company will be liable to pay interest to the policyholder from the date of receipt of last necessary document to the date of payment of claim at a rate 2% above the bank rate.

However, if circumstances warrant an investigation, the company should initiate and complete such investigation at the earliest, in any case not later than 30 days from the date of receipt of the last necessary document.In such cases, the company should settle or reject the claim within 45 days from the date of receipt of the last necessary document.

Multiple policies: In case an insured has multiple insurance policies, he/she has the right to settle claims from any of the policies. In all such cases, the insurer will be obliged to settle the claim as long as the claim is within the limits of and according to the terms of the chosen policy.

The insured has the right to prefer claims under a policy for the amount disallowed under any other policy / policies even if the sum insured is not exhausted. Further, if the claim amount exceeds the sum insured under a single policy, the insured person shall have the right to choose an insurer from whom he/she wants to claim the balance amount.

Migration and portability: The insured person will have the option to migrate the policy to another plan/product offered by the same insurer by applying for migration at least 30 days before the policy renewal date. Similarly, the insured can port the policy to other insurers by applying to such insurer to port the entire policy along with all the members of the family, if any, at least 45 days before, but not earlier than 60 days from the policy renewal date.

If such a person is presently covered and has been continuously covered without any lapses under any health insurance policy with an Indian General/Health insurer, the proposed insured person will get the accrued continuity benefits in waiting periods as per IRDAI guidelines on migration/portability.

While IRDAI regularly updates guidelines to make the process of buying insurance more transparent and standardized, before buying any product/policy, it is important to carefully go through the fine print of the policy and clear any doubts you may have.

Since the terms and conditions of insurance companies differ from one another, it can become difficult to find the right cover for you, dependents, and your child/children. You can consider the following points to choose the best policy:

• Types of expenses covered- hospitalisation, tests, room charges, intensive care charges, medications, and so on

• Waiting period

• Claim settlement ratio

• Illnesses covered and excluded

• Premium amount

• Policy term

• Availability of cashless facility

• Wide network of hospitals, etc.

If you are unsure about the type of policy suitable for your needs, seek the assistance of a financial advisor.

Warm Regards,
Divya Grover
Research Analyst

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