IRDAI Removes Age Limits on Health Insurance Purchase

This shift holds profound implications for both insurers and policyholders. By abolishing the maximum age restriction on purchasing health insurance plans, IRDAI aims to foster a more inclusive and accessible healthcare ecosystem, ensuring adequate protection against unforeseen medical expenses.

Furthermore, this move is poised to stimulate innovation within the insurance sector. Insurers are now incentivised to diversify their product offerings, catering to a broader spectrum of healthcare requirements.

Until now, individuals were limited to purchasing a new insurance policy only until the age of 65. However, with the recent changes that have come into effect from April 01, 2024, anyone, regardless of age, is eligible to purchase a new health insurance policy.

[Also Read: A Comprehensive Guide to Buy a Health Insurance Policy in India]

Furthermore, the insurance regulatory authority has urged health insurance providers to introduce tailored policies aimed at specific demographics, such as senior citizens. Additionally, insurers have been instructed to establish dedicated channels to handle health insurance claims and grievances specifically for senior citizens.

In a notification published in the Gazette, IRDAI stated, "Insurers shall ensure that they offer health insurance products to cater to all age groups. Insurers may design products specifically for senior citizens, students, children, maternity, and any other group as specified by the Competent Authority."

Moreover, insurers have been mandated to offer health policies to individuals with pre-existing medical conditions of any kind. Consequently, insurers are prohibited from refusing to issue policies to individuals with severe medical conditions like cancer, heart or renal failure, AIDS, among others.

[Also Read: Pre-existing Diseases in Health Insurance Plans: How You Can Cover Them in Your Policy]

Here Are Recent Notable Amendments in Health Insurance:

[Also Read: Are Senior Citizen Health Insurance Plans Worth the High Premiums?]

• Life insurance companies have the option to launch extended health policies lasting up to five years, whereas general insurers and standalone health insurers are limited to offering policies for a maximum period of three years.

• IRDAI has decreased the health insurance waiting period from 48 months to 36 months. According to the insurance regulator, all pre-existing conditions should be covered after 36 months, regardless of whether the policyholder disclosed them initially or not. Put simply, health insurers are prohibited from rejecting claims based on pre-existing conditions after these 36 months.

• IRDAI clarified that insurers cannot contest claims after 60 months of continuous coverage. After completing sixty consecutive months of coverage, including portability and migration, insurers cannot challenge policies or claims due to non-disclosure or misrepresentation, except in cases of established fraud.

• Life insurers are barred from introducing indemnity-based health policies, which compensate for hospital expenses. Instead, they are only permitted to provide benefit-based policies, offering fixed costs upon the occurrence of a covered disease.

• Life insurers have the liberty to bundle health plans with ULIPs (Unit Linked Insurance Plans).

• Premium adjustments during the policy term are prohibited. For instance, if a customer pays a two-year premium in advance, insurers cannot demand additional payments throughout the policy tenure. However, premium adjustments based on factors like age and risk are allowed at the time of renewal.

• Insurers are allowed to offer premium payment in instalments for the convenience of policyholders.

• Travel policies can only be offered by general and health insurers.

• There is no limit on AYUSH treatment coverage. Treatments under systems like Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Homeopathy will receive coverage up to the sum insured without any cap.

• Policyholders with benefit-based policies can file multiple claims with various insurers, enhancing flexibility and options.

• The proposed regulation seeks to handle the complaints and claims of senior citizens via a specialised channel, ensuring a more tailored and responsive approach to their requirements.

[Also Read: 10 Mistakes to Avoid When Buying Health Insurance for Senior Citizens]

To conclude:

The recent initiatives by IRDAI mark a significant leap forward in India's health insurance sector. By removing age restrictions on purchasing policies, reducing waiting periods for pre-existing conditions, and mandating coverage for various medical treatments, the regulatory body has paved the way for more inclusive and accessible healthcare.

These measures not only empower individuals to secure comprehensive coverage tailored to their needs but also encourage insurers to innovate and diversify their product offerings. Furthermore, directives aimed at streamlining processes, such as simplified renewals and dedicated channels for senior citizens, underscore IRDAI's commitment to enhancing customer experience and addressing the evolving needs of policyholders.

As the industry embraces these changes, it is poised to foster greater trust, transparency, and efficiency, ultimately advancing the overarching goal of ensuring financial protection and well-being for all segments of society.

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MITALI DHOKE is a Research Analyst at PersonalFN. She is an MBA (Finance) and a post-graduate in commerce (M. Com). She focuses primarily on covering articles around mutual funds including NFOs, financial planning and fixed-income products. Mitali holds an overall experience of 4 years in the financial services industry.
She also actively contributes towards content creation for PersonalFN’s social media platforms in the endeavour to educate investors and enhance their financial knowledge.
 

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