Mediclaim booster for senior citizens & the sick

New Norms Require Insurers To Condone Delays Up To 15 Days From The Renewal Date & Continue Cover Benefits

THE elderly and those with medical conditions will now find it easier to renew their health insurance plans. In response to court orders and recommendations of various committees, the insurance regulator has changed the renewability rules of health insurance policies.
    The new regulations make it mandatory for an insurance company to renew a health insurance policy, irrespective of how much it has already paid out in claims. More significantly, insurers now have to condone delays up to 15 days from the renewal date and carry on the benefits of coverage of preexisting diseases.
    There are large number of complaints against health insurers that they avoid renewing policies of the elderly and those with medical conditions if there is a break of even one day in renewing the policy.
    In a circular issued to all non-life companies this week, the Insurance Regulatory & Development Authority (IRDA) said health insurance policies must be renewed, except when the policyholder indulges in fraud or misrepresentation or when there is a moral hazard. "Specifically, renewal shall not be denied on the grounds that the insured had made a claim, or claims, in the earlier years," the circular said. The directive adds that all health insurance policies must contain a clause that provides for a mechanism to condone delays up to 15 days so that the insured is treated as 'continuously covered' in terms of continuity benefits such as waiting periods and coverage of pre-existing diseases.
    Until now there have been several instances of insurers using the break in continuity as an excuse to reject renewals. In such cases, the proposer is in a spot as no other insurer will cover an ailment for which a different insurer has already paid claims. While younger proposers can get cover with exclusions for pre-existing cover, people over 70 are the worst affected. No insurer accepts a fresh proposal from a senior citizen over 70 unless it is under a special scheme. IRDA's directive protects those who are most vulnerable to rejections.
    Henceforth, companies will have to disclose the maximum age until when the renewal will be available. They will also have to disclose how their premium charges progress as the insured ages. The terms of renewal must also state the procedure and terms for enhancing the sum insured or scope of cover. Apart from the directive on renewals, the regulator has also increased the level of transparency on health insurance. If the renewal premium being sought is higher than the existing premium, the insurance company will have to give a note explaining the reasons for the increase and also how it is consistent with the loading structure provided earlier.