Major changes in health insurance policy rules from October 2020 that you must know

The new IRDAI changes to health insurance is likely to be well-received by new as well as existing policyholders.

Major changes in health insurance policy rules from October 2020 that you must know

Health insurance policyholders in India can expect a string of benefits soon. The Insurance Regulatory and Development Authority of India (IRDAI) has issued certain guidelines and specifications that will bring some much-awaited changes to all existing and new health insurance policies.

From 1 October 2020, your health insurance policies will be reintroduced with these benefits, which include coverage of additional medical treatments, changes in claim rejection rules, a new definition of pre-existing diseases, and premium payment through equated monthly instalments (EMIs).

What are the important changes? 

The new changes are expected to standardise health insurance policies and make them more customer-friendly. Let’s take a look at what these are.

  • New ailments – Various new ailments have now been included in a standard health insurance policy. This covers ailments contracted due to hazardous activities, mental health issues, degeneration due to age, congenital diseases, and artificial life maintenance. Also included are behavioural disorders, neurodevelopment and genetic issues, puberty, menopause, cataract, knee replacement etc. In case of exclusion of AIDS/HIV, chronic kidney problems, epilepsy etc., the insurance company has to mention specific policy wordings to that effect, along with the waiting period.
  • No rejection after eight years – A moratorium period has been defined in the proposal, according to which no claims can be rejected after eight years of the policy. This will not be applicable in case of fraud and permanent exclusions.
  • Pre-existing diseases – Diseases or disorders diagnosed 48 months before the policy starting date will be considered as pre-existing diseases. Besides, symptoms arising within 3 months of the policy issuance will be considered as pre-existing. The insurance company can incorporate permanent exclusions in the policy only with the consent of the policyholder. These exclusions should not be outside the list of exclusions mentioned by the IRDAI. 
  • EMI payment option – The IRDAI has instructed insurers to accept EMIs for premium payment. This arrangement will be at the discretion of the policyholder, who may or may not choose to pay by EMIs.

Related: Understanding your Health Insurance policy

How do policyholders stand to benefit?

Quite simply, the inclusion of more diseases in the policy will widen the health coverage of the insured. Assured acceptance of claims after eight years will address the uncertainty that long-term policyholders often face. The proposal also standardises rules around pre-existing diseases; there will be a transparent threshold for judging these. And the EMI option will make health insurance affordable for many more families, which will in turn widen insurance coverage in India.

Why no claim rejection after eight years?

Pre-existing diseases and waiting periods are prominent reasons for claim rejection. These two factors will not be applicable in case of long-term policyholders. Policyholders will, however, need to renew their policies on a timely basis, and not let them lapse. If a policyholder ensures there is no lack of documentation (another reason for rejection), there is no reason why a claim should be rejected. Therefore, ruling out rejection in old policies is simpler and convenient.

What other changes are expected?

Due to the inclusion of several diseases, the number of illnesses under the permanent exclusion category will come down from 30 to 17. Along with the no-rejection move, no revaluation of policies will be applicable in case of policies that are 8 or more years old. In case of migration of a policy to other company, the older waiting period will be included. Policies with OPD coverage will get full coverage of telemedicine. Industry watchers are expecting a 5%–20% increase in premium due to these changes. Are unprecedented pandemics covered under health insurance? Read this piece and get answers to all you queries regarding health insurance and pandemics


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