New guidelines set by insurance regulator Insurance Regulatory and Development Authority of India (IRDAI) for medical insurance providers are set to come into force from October 1. The changes are aimed at making health insurance plans broader - covering more treatments - and more simplified. The new rules come at a time when the continuous spread of coronavirus pandemic has led to the worst contraction in the country's GDP or gross domestic product on record. What are these changes in health insurance, and how do they impact you?
Here are some of the key changes in health insurance that will come into effect from October 1, 2020:
Decision On A Claim Within 30 Days
According to the new guidelines, released by IRDAI in June, insurance companies will be required to either settle or reject a claim not more than 30 days from the date of its receipt, under certain conditions.
Any Delay Means Interest
In case an insurer fails to decide on a claim within this period, it will be required to pay interest at a rate of 2 per cent above the applicable bank rate on the dues to the policyholder. This means if your claim gets delayed, your insurance company will also have to pay an additional amount, over and above the claim amount.
No Rejection After 8 Years
The new rules also mandate the insurance companies not to reject a genuine claim after a policyholder completes eight years of paying premium. Insurers will also be not permitted to re-evaluate a policy for which the customer has paid.
Which insurers will the new rules be applicable to?
The new guidelines, issued in June by IRDAI, will apply to all general and health insurance companies.
Will your existing policies be aligned with any changes given in the new guidelines?
Yes. According to the insurance regulator, all existing health insurance plans not in compliance with the new guidelines will be modified. This includes plans renewed during this financial year (from April 1).