All You Need to Know About Color Coding in Health Insurance Plans
Continuing its efforts to simplify the insurance buying process, the Insurance Regulatory and Development Authority of India (IRDAI) has introduced color-coding for individual health insurance plans. The move will help the policyholders to understand the level of complexity when buying health insurance plan(s).
As per the color-coding set by the insurance regulator, the health insurance plans offered by general insurance companies will use green, red, and orange colors. The colors will indicate the complexity of the products that are available. The color green will indicate that the plan offered is a simple one, and is easy to understand and comprehend. The color orange will signify that the policy is moderately complex, and the color red will indicate that the policy is complex and should be understood properly.
The health insurance plans will indicate these color codes which will also be disclosed on the websites of the insurance companies. This will help potential customers make an informed choice.
As per the health insurance experts, health insurance is a complex subject and requires a lifelong decision to be made. And during the pandemic, the concept has even gained more importance as it shields against various expenses. They believe that color-coding will help in curbing mis-selling. It will also help the policyholders understand what they are purchasing and protect them from unpleasant surprises at the time of claim settlement.
According to the draft, every insurance advertisement that promotes a health insurance plan will also be required to specify the color code of that particular policy. IRDAI has officially set seven parameters on the basis of which a score between 0 and 6 will be allocated. These parameters include a percentage of co-pay, number of optional covers offered, number of treatment procedures/diseases under sub-limits, number of months in the waiting period, deductibles, simplicity of terms and conditions, and number of permanent exclusions.
Available only for individual health insurance plans, and not group health insurance plans, the coding guidelines may be the first step towards demystifying health insurance plans to a layman.
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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.
