IRDA's newly issued guidelines beneficial for the consumer

All hail the IRDA for it has come to the rescue of consumers! According to new guidelines issued by the Insurance Regulatory and Development Authority (IRDA) on the 2nd of April, 2010, it has become mandatory for health insurance companies to now renew health insurance policies irrespective of the payments already made by the health insurance company against the claims.

In lay man’s terms this newly issued guideline will bar health insurance companies from refuting the renewal of a health insurance policy based on repeated claim settlement. This guideline put into action after the modification of three acts: the Insurance Act, 1938; the General Insurance Business (Nationalisation) Act, 1972 and the Insurance Regulatory and Development Authority (IRDA) Act, 1999, will greatly benefit the older population which due to their advanced age requires repeated hospitalization, thereby repeated claim settlement.

Most of the times you forget to renew your policy by a mere 2-3 days, which causes the policy to relapse i.e start anew, wherein it is treated as a new policy and you lose the cover benefits given for the pre-existing diseases; put it simply you lose out on the waiting period already covered for pre-existing diseases and have to do with a new waiting period that is usually 4 years! The new guideline issued by the IRDA has cleared this fallacy up by making it clear that any delay in renewing the policy up to 15 days will have to be excused and the insurance company cannot revoke the benefits given for pre-existing diseases on the basis of non-renewal of the policy up to 15 days.

Moreover the IRDA has made it clear that insurance companies should not force consumers to shift from their current health insurance policy to another, except for when their policy is to be upgraded or discontinued with permission from concerned authorities.

IRDA has also stated that Health insurance companies should provide complete details about the renewal of a policy to the consumer, along with stating in clear terms if there are any changes in the payment of the premium by the consumer; these steps are to ensure that the consumer can make an informed decision whenever he opts to buy or renew his current health insurance policy.   

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