Jul 6, 2009

Investor’s Reforms - What’s New in 2009? (# 2)

Photo by 917press

This post is # 2 of two part series on investor’s reforms introduced in first half of 2009. The part I Investor’s Reform – What’s new in 2009? talked about recent changes introduced by RBI, SEBI & PFRDA for the benefit of common investor. This post lists latest guidelines / circular issued by IRDA in 2009 relating to health mediclaim insurance policies.

Health / Mediclaim Insurance Policy – Latest IRDA Guidelines

1. Renewal of Health / Mediclaim policies
IRDA has finally woken up to the harassment of consumers by the general insurance companies.

In the current scenario, buyers of health mediclaim policies are totally at the mercy of insurers while renewing the mediclaim policies. At the slightest of excuse they increase the premiums, don’t provide any grace period for paying premium, refuse to renew on arbitrary grounds or just because you made a claim in the previous year.

Now for all health policies issued or renewed on or after June 1, 2009, this is going to change for the better. IRDA has issued some guidelines (Circular no 52/15/IRDA/Health/SN/08-09 dated March 31, 2009) in the consumer interest to bring in more transparency and certainty regarding coverage and cost of health insurance.

First, at the time of buying the policy you’ll know in advance future premiums, specific circumstances under which premium could be loaded or discount withdrawn and extent to which it would be done. All insurers will have to provide detailed upfront disclosure.

Second, at the time of renewal you can expect that continuity of your policy won’t be affected just because of delay of few days in renewing the policy provided you renew your policy with in 15 days of the due date.

Third, in case of increase in premium (which shall be IRDA approved) from that mentioned in the policy, you will receive advance notice of at least 3 months before the renewal date informing you of the changes.

Fourth, now insurance companies won’t be able to deny the renewal of your health policy on arbitrary grounds or the ground that you made a claim (or claims) in previous year.

2. Health Insurance for Senior Citizens
There’s something more for senior citizens. In yet another circular (CIR/011/3/IRDA/Health/SN/09-10 dated 25th May 2009), IRDA has instructed all general insurance companies to allow entry at least up to 65 years of age. Further, if they deny insurance cover to any senior citizen, it will be done in writing with reasons for the denial. And, above all, premium charged on senior citizens health policies should be fair and transparent and loading, if any, should be disclosed to the insured.

In order to bring in more transparency, IRDA has also made it mandatory for all insurers to display detailed features / description including policy clauses of all health insurance products on their websites.

Thus, now with effect from July 1, 2009, no insurance company can refuse health cover to senior citizens till the age of 65, or charge exorbitant premium to discourage them from buying health cover. And, if they still dare to refuse, reasons will have to be recorded in writing (i.e., verbal refusal won’t be enough).

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