Health Insurance Claim Becomes Non-Contestable After 8 Years of Premium Payment
The IRDAI has released new guidance to protect the policyholders which would immunize them from claim denial by insurance providers. The primary aim of the rules is to standardize clauses and terms of health insurance and make it easy for a layman to grasp.
What Does IRDAI Say About This New Rule?
IRDAI has drawn up revised rules and initiated a moratorium period to ensure that insurance companies do deny policyholders' claims. Here are the specifics of the new guidelines:
1. All prevailing health insurance policies which do not conform with these provisions shall be revised when due for renewal on or after 1st April 2021. No “look back” to apply after 8 years have been completed under the policy. No application for health insurance is challenged after the “expiration of the moratorium period” (of 8 years) other than confirmed deception and permanent exclusion provided for in the insurance plan.
2. All caps, sub-limits, deductibles, limits, and co-payments, as per the “insurance contract” will continue to apply to the policies.
3. In the guidelines on standardization of “general clauses and terms” of “health insurance contracts”, the moratorium will be relevant to the “sum insured” for the 1st policy, and the eight completed years will be valid from the date of increase of the sum insured only on the increased limits.
4. Regarding the settlement of claims, IRDAI stated that the insurance provider can, as the circumstance may be, settle or deny a claim ‘within 30 days’ of receiving the last relevant document.
5. Where there is a ‘delay in the settlement of a claim’, from the “date of receipt” of the “last required document” to the “date of claim payment” the insurer would have to “pay interest” to the insured at a rate of 2% over the ‘bank rate’.
6. Moreover, any “misdescription, misrepresentation, or non-disclosure” of ‘material facts’ by the insured, the ‘policy’ is considered invalid and all premiums paid would be “forfeited” to the insurance company/insurer
7. On ‘portability’, the guidelines specified that the insured would have the option of porting the policy to other insurance companies by applying to such insurance companies to port the whole policy together with all family members if any, a minimum of 45 days before, however not later than 60 days after the renewal date of the policy
8. The suggested insured person would receive the cumulative continuity benefits during waiting periods if that person is already covered and is regularly covered without lapses by any health insurance plan with an Indian health/general.
Bottom Line
The above are some key clauses, terms, and conditions that the IRDAI formulates and are important for all to remember. All terms must be taken into consideration and the conditions must be understood when looking for a health insurance policy.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
