Planning To Buy Health Insurance? Here Are 5 Big Changes You Must Know

The country's insurance regulator has released a master circular on health insurance, repealing all the 55 circulars issued earlier, in a major stride towards reinforcing the empowerment of policyholders as well as bolstering inclusive health insurance.

In a press release, the Insurance Regulatory and Development Authority of India (IRDAI) said that the latest circular has "brought in one place the entitlements in a health insurance policy available to a Policyholder/prospects for their easy reference and also emphasises measures towards providing seamless, faster and hassle-free claims experience to a policyholder procuring health insurance policy and ensuring enhanced service standards across the health insurance sector".

Here's a look at some features of the new master circular:

1. Inclusiveness

IRDAI stated that wider choice will be provided by the insurers by "making available products/addons/riders by offering diverse insurance products catering to all ages, regions, occupational categories, medical conditions/ treatments, all types of Hospitals and Health Care Providers to suit the affordability of the policyholders/prospects."

Over a month ago, the regulatory body lifted the age cap on purchasing health insurance policies, effective from April 1 onwards. Before that, individuals were restricted to buying an insurance policy only until the age of 65. 

2. Cashless claims

IRDAI has said that the health insurance companies will be required to take a call on cashless authorisation requests for policyholders' treatment within an hour. So far, the turnaround times over cashless authorisation and claim settlement are mostly based on the insurance companies' board-approved policies.

Also, insurance companies have been asked to approve the final cashless authorisation within three hours of the receipt of the discharge authorisation request from hospitals. In case of a delay beyond three hours, "the additional amount, if any, charged by the hospital shall be borne by the insurer from shareholder's fund,” the circular states.

3. Grace period

The insurance regulator has mandated that the grace period will be for 15 days in case the premium is paid through monthly installments. For those who pay health insurance premiums in quarterly, half-yearly or annual installments, the grace period will be 30 days. "If the premium is paid in instalments during the policy period, coverage will be available for the grace period also," the IRDAI circular said.

In a health insurance plan, a grace period is the extra time an individual gets to pay the premium if he/she misses the policy renewal due date. 

Insurance companies so far used to offer grace periods depending upon the type of policy. The grace period varies from one insurer to the other. Also, companies typically do not offer policy coverage during the grace period, reports said.

4. Free look period

In the case of policies with a term of one year or more, a period of 30 days -- starting from the date of receipt of the policy document -- will be available to the policyholders to review the terms and conditions of the policy. If they are not satisfied with any of the terms and conditions, they will have the option to cancel the policy. 

The free-look period was increased earlier this year from 15 days to 30 days, making it applicable on both new life and individual health insurance policies from April 1 onwards.

5. Cancellation of policy

According to IRDAI's new circular, a customer can cancel a health insurance policy at any time by giving 7 days of notice in writing. The insurer will refund the proportionate premium for the unexpired policy period if the policy term is up to one year and no claim is made during the policy period.

Cancellation charges used to be quite high earlier and varied across different insurers.