According to the latest rules of the Insurance Regulatory and Development Authority of India (IRDAI), insurance companies will not be able to deny coverage for those diseases that are contracted after the policy is in place. In addition, insurance providers will also have to provide medical insurance for those health conditions that are linked to mental illness, hazardous work, congenital diseases, and age-related degenerative disorders. This is a significant change, which will increase the medical coverage for people.
IRDAI has standardized the exclusions to show that if insurance companies do not wish to include HIV/AIDS, kidney ailment, or epilepsy, some specific wordings have been mentioned with a waiting period in the regulation. The waiting period can be anywhere between one month to a year after when the cover will be extended. According to the rules, individuals who provide information about pre-existing conditions will be covered after the waiting period of 48 months or when the duration specified in the product is over.
People who suffered from a critical illness like epilepsy could not get a health cover in the past even for non-related conditions. However, with the new norms, they can avail of a health insurance plan. Similar was the case with cancer survivors who contracted the disease a long time back. The new norms will bring many people under the ambit of coverage.
With the latest norms in the insurance industry, the portability will be easy and convenient. If an individual transfers the policy from one insurer to another and has also completed a part of the waiting period requirement, the new insurer will have to impose only the unexpired waiting period, which will not exceed 48 months from the date of inception of the policy. For example, if a policyholder ports his or her policy from one insurer to another after completion of 12 months of the waiting period, the new insurer will exclude these 12 months from the total waiting period. In such a scenario, he or she will only have a waiting period of the remaining 36 months.
Policyholders can enjoy a tax deduction under Section 80D for the premium paid in health insurance. Health policy is an important asset and individuals should carefully choose the most suitable plan. Given the number of plans available in the market, it could get confusing to make a decision. Hence, it is best to compare the products and consider the features of each plan before buying one. People with pre-existing conditions should understand the waiting period requirement and inform the insurance company about their condition.
Standardizing of wordings of exclusions will help avoid any confusion and give the policyholders a better understanding. With advances in medical treatments and new methods being introduced, insurance companies can cover policyholders against these. The new norms will be applicable for those products filed after October 1, 2019. In the case of existing health insurance policies, the new rules will come into effect from October 1, 2020.
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