You may have heard that ‘insurance is sold, not bought.’ This reluctance to buy insurance has a notable exception. Health insurance is much desired and available from general and health inssurers. Life insurers can issue benefit, not indemnity, policies covering health.
Yet, just because you want a health insurance policy, it does not mean you will get it. Renewal, too, can be denied.
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No insurer is obliged to issue you a health insurance policy. The premium, terms and conditions are also at his discretion. While the underwriting decision on a new policy lies with the insurance company, here is what the regulations say.
Health insurance policies should allow age at entry of at least 65 years. Exceptions include maternity or certain group policies such as student policies. Also excluded are overseas hospitalisation and personal accident policies and pilot products. (A pilot product, a concept that has come up in the last few years, is a close-ended new insurance policy to explore how to cover risks not covered until now or are exclusions in existing products.)
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On age grounds, your insurer cannot deny you a renewal or because you made a claim in the previous policy years. In other words, once you have a policy, you are entitled to life-long renewal in the normal course.
Keep policy valid
It’s your responsibility to keep your policy valid through timely renewal. Regulations specify that insurers should condone a gap in renewal of up to 30 days and keep benefits such as waiting period for pre-existing conditions intact. This is a new measure that gives the insured considerable leeway as no gap in coverage was entertained earlier. But remember, any claims that arise during the uncovered period will not be tenable.
If the policy (including a pilot) is withdrawn, at the time of renewal, the insurer has to port you to an alternative available policy subject to portability conditions.
Renewal will not be done in the case of benefit policies where a claim is paid and the policy terminates. Details of when and how the policy will terminate should be explicitly stated in the policy document upfront. Your renewal premium cannot be arbitrarily loaded because of your claims history but only on group experience basis and that too, disclosed upfront. However, if you are eligible for a cumulative bonus for a claim-free insurance period, that can be cut when there is a claim.
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Bonus details should be stated explicitly in the prospectus and the policy document and, if there is a claim, the bonus should be reduced at the same rate at which it has accrued. This also applies to the premium to be charged for the policy.
On renewal, your insurer should not require you to go through a fresh medical examination provided there is no increase in your sum assured. This provision safeguards you against denial of renewal or loading of premium or imposition of any new terms or exclusions.
Renewal can be denied on the basis of fraud, misrepresentation moral hazard or misrepresentation by the insured. Moral hazard has been a serious matter in the past. This hampered the profitable growth of health insurance in India because when such practices are rampant, the majority suffers due to the acts of a few.
(The writer is a business journalist specialising in insurance & corporate history)
Source: https://t-tees.com
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