Insurance regulator IRDA has mandated that no health insurance company can reject an eligible claim of the policyholder if the policy has completed eight years. This has come as a big relief for both existing as well as prospective policyholders. We tell you how this change will help you in the long run.
Health insurance policy has one of the most complex product structures in terms of coverage and its reimbursement process. It involves many exclusions with varying conditions, which only a person with sound medical knowledge can understand completely. Besides, there are many inclusions with sub-clauses and different layers of admissibility. Unless a policyholder gets the final discharge summary, he is never sure whether his claim will be accepted by the insurer and if accepted, then to what extent it will be honoured.
Many policyholders often get a rude shock of claim rejection when they are told finer details of the policy on the basis of which the health insurer rejects their claims. It appears to many as if insurer is more interested in finding faults and rejecting the claim rather than finding ways to help them in time of need. This creates a major trust deficit between policyholders and insurers as former loses confidence whether their claims will be accepted by the latter. This is the reason why many do not consider it as a fully dependable option. The very purpose for which people buy a health policy is for it to be useful during emergency. If it does not live up to that expectation, it defeats the purpose.
Regulator IRDA has been working on many fronts to make the processes simpler in insurance to bridge the trust deficit and increase transparency. Gaining from a transformative step in life insurance policy, where it had mandated insurers not to reject any claim on any ground except fraud if the policy completed 3 years, IRDA has followed the same with health insurance policy. The regulator has mandated that if a health insurance policy has completed eight years, insurers cannot reject an eligible claim.
"After completion of eight continuous years under the policy no look back to be applied. This period of eight years is called as moratorium period. The moratorium would be applicable for the sums insured of the first policy and subsequently completion of eight continuous years would be applicable from date of enhancement of sums insured only on the enhanced limits," said IRDA.
To make things clearer the regulator has gone ahead and specified the only condition for exception: "After the expiry of Moratorium Period no health insurance claim shall be contestable except for proven fraud and permanent exclusions specified in the policy contract. The policies would however be subject to all limits, sub limits, co-payments, deductibles as per the policy contract."
This is a good step forward which gives a solid ground for the policyholders to hold insurance companies accountable for claims promised under the policy if they have stuck with the policy for eight long years. This amendment will encourage policyholders to stick to their policy and go for continuous renewals.
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