The health insurance companies will not be allowed to contest insurance claims after the premium has been paid continuously for eight years, said insurance regulator in its new guidelines. The objective of the guidelines is to standardise the general terms and clauses incorporated in indemnity based health insurance products by simplifying the wordings of general terms and clauses of the policy contracts and ensure uniformity across the industry, IRDAI said.
"All policy contracts of the existing health insurance products that are not in compliance with these guidelines shall be modified as and when they are due for renewal from April 1, 2021 onwards, it added.
"After completion of eight continuous years under the policy no look back to be applied...After expiry of moratorium period (of eight years) no health insurance claim shall be contestable except for proven fraud and permanent exclusions specified in the policy contract," IRDAI said.
The policies will, however, be subject to all limits, sub-limits, co-payments, deductibles as per the policy contract.
This period of eight years is called a moratorium period. The moratorium would be applicable for the sums insured of the first policy and subsequently completion of 8 continuous years would be applicable from date of enhancement of sums insured only on the enhanced limits, the regulator said in the guidelines on 'Standardization of General Terms and Clauses in Health Insurance Policy Contracts'.
On claim settlement, Irdai said the insurance company should settle or reject a claim, as the case may be, within 30 days from the date of receipt of the last necessary document.
Meanwhile, according to a recent report, the data furnished by life insurance industry has shown that only 100 death claims out of 6,088 deaths have been reported, which is a mere 2 per cent. IRDAI and life insurers now believe that life insurance in India could be under-penetrated as compared to health insurance. The daily states that policymakers are looking into whether public policy has to be reframed to ensure adequate financial protection in case the primary breadwinner of the family succumbs to coronavirus.
(With PTI inputs)