With the stressful modern day lives that we lead today, health is increasingly becoming a cause of concern.
To avoid hassles of huge medical expenses in case of an unforeseen illness, having an adequate health insurance cover is recommended time and again by financial planners.
But if past experiences are anything to go by, health insurance policy holders have had to run from pillar to post at the time of settlement of claims. Settlement would take forever and even when you did receive a settlement cheque, only a part of your medical expenses used to be covered without any plausible explanation as to why only a certain part of your claims was covered and the other part was rejected.
In order to address these longstanding grouses that insurers had against insurance companies, the insurance regulatory authority of India, Insurance Regulatory and Development Authority of India (IRDA) is making an attempt to “clean up” the grey areas and present the Indian citizens with better health insurance policies.
IRDA released new draft regulations for health insurance, which have currently been put up for public review. Here is a closer look at the main changes that have been proposed by IRDA.
RENEWABLE FOR A LIFETIME
Henceforth, all insurance policies are proposed to be renewable for life. This means that senior citizens who are most likely to need health insurance in advancing years to take care of their medical expenses are not left out of the ambit of the health insurance policies.
A DEADLINE OF 30 DAYS TO CLAIM SETTLEMENT
Unlike the current scheme of things where claiming settlement can take up to as much as six months and can be very frustrating for the claimants to say the least, the new regulations propose that claims need to be settled within a time frame of a maximum of 30 days after all the required documents have been submitted.
If the claimant does not receive his claim within 30 days, he can question his insurer. Interestingly, this clause was present in the original draft of the health insurance regulations in India, but was never implemented by health insurance companies.
DIRECT PAYMENT TO HOSPITALS
IRDA has proposed that all payments be made directly to hospitals in order to make the payment process smooth and hassle free. So far, settlement-claiming cheques used to come from the end of third party administrators, which used to delay the payment process greatly. Besides, it was impossible for a customer to find out whether the entire amount that had been sanctioned by the insurer had been passed on to the claimant or not.
PROVIDE STANDARD DEFINITIONS
Currently there is a lot of ambiguity about the various illnesses that are critical and those that have been permanently excluded from the purview of health insurance policies.
In order to rectify this, the IRDA has suggested that all health insurance companies be provided with standard definitions of terms that need to be understood by customers before they make a prudent choice. This is an important change and is expected to go a long way in altering the way health insurance policies are sold in the country.
SPECIFY REASONS FOR CLAIM DENIAL
In case a health insurance company is rejecting a claim, it has to explain in writing the reasons why the claim is being rejected. This is as opposed to the current practice of rejecting claims on grounds that are utterly flimsy or worse still, rejecting claims without any explanation at all.
MAXIMUM BENEFITS FROM MULTIPLE POLICIES
Until now, if a claim was made on two policies, it used to be split between the two health insurers in the ratio of the sum that was insured.
The new regulations, however, propose that the claimant will get to choose between the two policies that he holds. This will be particularly beneficial for those who get an insurance policy as part of their employee benefits and also take individual policies.
As long as they are in service of the company that is providing such benefits, they can claim from that policy, but when the service period is over, they can make a claim from their individual policies.
CUMULATIVE (NO-CLAIM) BONUS TO BE STANDARDIZED
IRDA has proposed that insurers provide complete clarity about no claim of bonus. In case a claim has not been made in a particular year, the no claim bonus will have to be rolled back at the rate at which it was offered or has to be made a part of the total sum insured after the premium has been charged to this additional cover.
JUSTIFICATION FOR INCREASE IN PREMIUM IF ANY
Customers will no longer be in for a nasty surprise when the time arrives for the renewal of their policies. IRDA has said that insurers can only hike premiums if they can justify it to the IRDA on the basis of the preceding years of claim experience (at least three years). They will also have to explain the rationale behind the hike in prices as well.
FIFTEEN DAYS FREE LOOK IN PERIOD
The most radical change that IRDA suggests is the free 15 day look in period, wherein it provides an aspiring customer to keep the policy and study it for 15 days absolutely free of cost. If he is not convinced about the benefits of the policy, he will have the liberty to return the policy to the insurer after a period of 15 days.