Indians will be able to buy health insurance up to the age of 65 years and get it renewed without any exit age if the Insurance Regulatory and Development Authority's (Irda's) latest draft guidelines are implemented.
These, and other guidelines, seek to transform the way health insurance is bought and used. "The guidelines could bring much more standardisation. The policyholder will know what he can expect from the firm," says T A Ramalingam, chief technical officer, Bajaj Allianz General Insurance.
However, pricing products for senior citizens will be a challenge. "The issue is that we have to price population above 75 years of age and we don't have enough data about people in that age group. So, pricing is a big challenge," says Ramalingam.
"The fact that Irda has opened up the age group up to 65 years means the higher age group will have to pay a significantly higher premium," says Arvind Laddha, managing director and chief executive officer, Vantage Insurance Brokers and Risk Advisors.
The guidelines say there will be no exit age for renewal provided the policy is renewed without break. The draft says the policyholder can access any authorised hospital in India, irrespective of whether the insurer has a tie-up with that hospital or not.
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Industry officials are uneasy with the proposal. "The challenge is that if somebody is hospitalised in a remote area, how will we manage claims if we do not have a tieup with that hospital?" says Ramalingam of Bajaj.
On proposal to reimburse half the money spent on medical check-ups, Laddha of Vantage Insurance Brokers says, "At presently, some insurance companies reimburse 100 per cent, some pay 50 per cent, whereas some insurers do not pay anything." The draft says that the insurer will reimburse at least 50 per cent cost, if any, incurred by the insured during pre-insurance medical examination.
Moreover, written reasons will have to be provided by the insurer for rejecting any insurance proposal. This will apply to renewals as well.