The growth and future of health insurance sector are dependent on its regulations that keep changing. The Regulatory and Development Authority of India introduces these changes at certain intervals of time. After 2013, IRDAI has brought some important changes very recently in 2016 that are mentioned below:
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IRDAI had introduced a new guideline for combi plans in the year 2009, which allowed life and non-life policyholders to enter and follow the agreement as mentioned in the policy wordings. Currently, IndiaFirst Life Insurance and Star Health insurance are merged to offer Star First Combi Plans in the Indian market. This plan is a perfect mix of a term plan and health policy. It has become easier for a customer to manage two policies and enjoy the dual benefit under a single insurance plan. From now onwards, customers can easily find such combi plans that combine the features of life and health insurance plans.
As of now, a feature like the cumulative bonus is not listed in the benefits offered by insurance policies, such as a critical illness insurance policy. Moving ahead, it will definitely be offered and clearly stated in the policy wording. After a certain period of time, the cumulative bonus leads to an increased sum assured and covers heavy medical expenses in the future. As the sum assured is increased, the policyholder will have to pay a little extra premium to the insurer, which is very insignificant. The cumulative bonus will be reduced, in case a claim is made in any particular year. The sum assured is increased by a certain percentage at the end of each claim-free year. This percentage increases minimum 10% and maximum up to 50 %.
Health insurance policy plays an important role in protecting the insured against the medical expenses incurred due to a medical emergency. To avail the benefits of a health insurance policy, the insured has to pay a fixed amount of premium to the insurer. The premium may vary, as it depends on certain factors like sum assured as per the policy, age and healthy habits of the policyholder. The IRDAI guidelines emphasise on continued renewals and an early entry. It aims at providing healthy lifestyle, which includes preventive and wellness habits. These benefits will help the insured to improve their health.
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This new change may lead in the insurance sector. IRDAI has asked insurers to come up with insurance products that can survey the market. It has also mentioned that policy tenure should be 1 year. Initially, it should be offered only by general or health insurers for just five years. According to IRDA of India, an insurer should allow policyholders to cancel or port their existing policies to a regular policy. This policy should aim at covering the risks that have not been covered under any policy till now. Insurers can flexibly withdraw/continue the policy even after 5 consecutive years.
According to IRDAI, insurers are free to design the proposal form according to their requirements. They can include a separate set of standard declarations. However, the regulation restricts the insurers from sharing customer’s data with any third party. An insurer can exclude or include the coverage that can help customers to draw out more benefits from a health insurance policy.
One of the most important changes stated by IRDAI is that life insurers are restricted to offer Indemnity insurance products across the market. Indemnity insurance plans are health insurance policies (for example, a mediclaim), which cover the total hospital expenses incurred during a medical emergency. For an existing health insurance policy by life insurers, the policy shall continue until the policy term expires. Policyholders will be provided with all the benefits mentioned in the policy wordings. As a life insurance firm, they reserve the adequate amount of funds to meet the expected claims liability of their policyholders. It ensures that changing rules should not affect the policyholders in any manner.
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