This pandemic made us realise the importance of medical backup in our lives and that how the cost of healthcare is taking a new hike everyday because of the ever-growing demand for medical services. Health and medical insurance proves to be a helping hand in these kind of situations and prevents any impact on the savings for the future educational and personal goals. But the main hurdle lies in the understanding of terms and conditions of the health insurances as they are pretty technical in nature. Average customers find it difficult to understand the meaning of each and every condition and that’s why comparing the health plans become quite an issue for them.
To provide a solution The Insurance Regulatory and Development Authority of India (IRDA) on 11th June, 2020 issued guidelines on Standardization of general terms and clauses in Health Insurance Policy Contracts so that it could be easily understood by the customers and transparency could be maintained.
The guidelines are as follows:
- The policy shall be void and all the premium paid shall be forfeited to the company in the event of misrepresentation or non-disclosure of any material information by the policyholder whereby material facts shall mean all relevant information sought by the company to enable it to take informed decision in the context of underwriting the risk.
- The company shall settle or reject a claim, within 30 days from the date of last necessary document and in case of delay in the payment of claim the company shall be liable to pay interest to the policy holder at 2% above the bank rate. In case the claim warrant of an investigation in the opinion of the Company, such investigation should be completed at the earliest and not later than 30 days from the date of receipt of last necessary document. The Company shall settle the claim within 45 days in such a case and in the event of any delay the Company shall pay interest to policyholder at 2 above the bank rate.
- If an insured person takes multiple policies, he/ she shall have the right to require a settlement of his/her claim in terms of his/ her policies. The insurer chosen by the insured person shall be obliged to settle the claim and he/she shall have the right to prefer claims under this policy/policies even if the sum insured is not exhausted. If the amount claimed exceeds the sum insured under a single policy, the insured person shall have a right to choose insurer from whom he/she wants to claim the balance amount and the insured person shall only be indemnified the treatment of the costs in accordance with the terms and conditions of the chosen policy.
- The benefits of the policy and the premium paid shall be forfeited if any claim made by the insured person is fraudulent, or any false statement, or declaration is made or used in support thereof, or if any fraudulent means or devices are used by the insured person or anyone acting on his/her behalf to obtain any benefit under the policy. Any amount already paid against claims made under this policy but which are found fraudulent later shall be repaid by all recipient(s)/policyholder(s), who has made that particular claim, who shall be jointly and severally liable for such repayment to the insurer. The Company shall not forfeit the policy benefits or repudiate the claim, if the person prove that the misstatement was true to the best of his knowledge and there was no deliberate intention to suppress the fact or that such misstatement of or suppression of material fact are within the knowledge of the insurer.
- The policy may be cancelled by the policymaker by giving 15 days written notice and in such an event, the Company shall refund the premium for the unexpired policy period and it can be cancelled on the ground of misrepresentation, non-disclosure of material facts, and fraud by the insured person. However, no refunds shall be made in respect of cancellation where, any claim has been admitted or has been lodged or any benefit has been availed by the insured person under the policy and on the grounds of misrepresentation, non-disclosure of material facts or fraud.
- The insured person will have the option the migrate the policy to other health insurance products/plans offered by the company by applying for migration of the policy at least 30 days before the policy renewal date and if such person is presently covered and has been continuously covered without any lapses under any health insurance product/plan offered by the company, the insured person will get accrued continuity benefits in waiting periods.
The insured person will also have the option to port the policy to other insurers by applying to such insurer to port 45 days before, but not earlier than 60 days from the
- policy renewal date and such insured person will get accrued continuity benefits in waiting periods if such person is presently covered or has been continuously covered under any health insurance policy with an Indian General/ Health insurer.
- The Company shall attempt to give notice for renewal but it’s not obligatory and it can only be denied on the grounds of misrepresentation, fraud by the insured person and not on the ground that the person had made a claim or claims in the preceding policy years and the request for the same shall be received by the Company before the end of the policy period. At the end of the policy period, the policy shall terminate and can be renewed within the grace period specified by the insurer as per product design to maintain continuity of benefits without break in policy.
- The Company will intimate the insured person about the withdrawal of the policy 90 days prior of the expiry date and the insured person will have option to migrate to similar health insurance product available with the company.
- After the completion of 8 continuous years under the policy no look back is to be applied and this is known as the moratorium period and the same would be applicable for the sums insured of the first policy and subsequently completion of 8 continuous periods would be applicable from the date of enhancement of sums insured only on the enhanced limits. No health insurance claim shall be contestable except for proven fraud and permanent exclusions specified in the policy contract after the expiry of this period.
- Certain guidelines related to the person who has opted for payment of premium on an installment basis has been laid down which includes grace period, waiting period, specific waiting periods. The company has the right to recover and deduct all the pending installments from the claim amount due under policy.
- Insurers are required to give you a free-look period to review your policy and if you are dissatisfied, return it and get your money back and it shall be applicable on new individual health insurance policies and not on renewals or at the time of porting/migrating the policy. The insured person shall be allowed free look period of 15 days from the date of receipt of policy document to review the terms and conditions of the policy, and to return the same if not acceptable.
- The definition of the “Pre-Existing Disease” at Clause 3 of Chapter 1 under Section 1 of the Master Circular on Standardization of Health Insurance Products was rectified.
These guidelines will be applicable to all health insurers who are providing indemnity-based health insurance (excluding Personal Accident and Domestic/Overseas Travel) products for individuals and groups on or after 1st October, 2020.