New Rule: After 8 Years of Premium Payment Health Insurance Claim Becomes Non-Contestable

Health insurance policies have benefitted countless individuals and families to a great extent and have also secured and safeguarded futures of millions and millions of people. But everything comes with an expiry date!

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      Harsh as it may sound, it is true. According to the recent guidelines incorporated by the IRDAI, one cannot contest the claim of any health insurance after eight years. Even after strong resistance from various masses of the society, the decision of IRDAI remains completely undaunted. It is a very bold and daring step ascertained by IRDAI (Insurance Regulatory and Development Authority) in this regard.

      What Does IRDAI Say?

      This extreme step is taken for the sole purpose of standardization of the general terms and clauses incorporated.

      The IRDAI further states that “The policy contracts of the health insurance products which are existing and are not in compliance with all the other guidelines are intended to modify from April 1, 2021.”

      However, the IRDAI has further claimed that all the pending payments, sub-limits will be completed as per the contract before the tenure ends.

      The entire period of eight years is called as the moratorium period.

      In this article we’ll through some lights on this statement. Following are some theories which can be postulated: -

      • For the reimbursement, the IRDAI has stated that the insurance company is liable to reject or settle a claim accordingly before the completion of the 30th day from the date of receipt.
      • It is a vast process to keep up with, so they are bound to delays at certain times. If there is a delay or a technical glitch in the payment module, the company takes upon the responsibility and sees to it that it is liable to pay the interest to the person who bought the policy. The company follows all the terms and conditions thoroughly and does not compromise with the quality of service it has to offer. The authenticity and legitimacy of the company lie in the values, and the company does not compromise with its values. In some cases, it also provides claim at a 2 per cent rate above the bank.
      • In case of any treachery or breach of trust on the policyholder’s part, the IRDAI has strictly stated that the policy will become void and the policyholder will be deprived of all the benefits and the premium paid will be relinquished by the company. Thus, all the health insurance plans online are supervised and dealt with twice before they are uploaded on the main website.
      • Portability is the exclusive right of a policyholder to switch the benefits and the credits gained in the previous company to a new company. It would be under the situation if it were stated in the documents signed by the policyholder and sanctioned by both the parties, the policyholder, and the insurer.
      • There might be many reasons to switch from one insurance company to another such as better returns, lifelong renewal, cashless facility etc.
      • The mediclaim policy states that the insurer should port the policy 45 days prior to the renewal date. It also has a condition that the portability process should not take more than 60 days.
      • If the person is availing the benefits of the policy without any lapses, then the person will get the continuity benefits in the waiting periods.

      All these conditions have the approval of all the authorities concerned with the policies. The requirements cannot be implemented before the approval from the authority.

      Apart from these, the other conditions covered under this moratorium period are:

      • If the policyholder buys multiple policies, he/she still has a right to acquire a settlement of the cost of the treatment. However, there are some terms and conditions which need to be taken care of. The policyholder is obliged to settle the claim when it is in the limits and in accordance with the policy.
      • In some cases, the amount which is to be claimed increases more than the sum which is insured under a single policy. The policy enables the insured person to choose the insurer from whom he/she wants to claim the remaining amount.
      • If the policyholder has policies from more the one insurer, then only the treatment cost is returned and that too according to the terms and conditions of the policy.
      • If the policyholder is proven guilty while making a fraudulent claim, then he/she would be deprived of all the premium amount paid by them. The company has the right to forfeit the amount without any knowledge of the policyholder if the beneficiary proves that the statement was true to the best of his knowledge.
      • There is a power of attorney for the policyholder wherein he can cancel the policy by giving a notice period of 15 days, and he/she is entitled to the refund of the outstanding amount of premium if the policy period has not expired.
      • Various health insurance claims can also be sent through the post, email, or fax. Since the advent of all these conditions, the IRDAI has also introduced a cashless claim. However, it all boils down through the policyholder as to which way he wants to follow.
      • The health insurance company has the right to cancel the policy on the grounds of misinterpretation or any kind of fraud.
      • There is also a provision to migrate the policy and apply for the other policy and avail the benefits and services offered by the new one. However, the new policy should represent the same health insurance company. It is exceedingly mandatory that the policyholder should follow the guidelines and rules for the transfer of the old policy to the new one.
      • The insurance companies cannot charge interest if the premium of the insurance is not paid on or before the due date.
      • There is grace period allotted to every policyholder, and if the premium is not paid within that period, the policy can get cancelled.

      Final Word!

      These are some of the key terms and conditions formulated by the IRDAI and vital for everyone to know. One should consider these terms and be aware with the conditions while looking for a health insurance plan.

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