Regulator Irdai on Thursday issued guidelines on mandatory standard individual health insurance, asking the general and health insurers to offer product that can take care of basic health needs of customers with maximum sum insured of ₹5 lakh and a minimum of ₹1 lakh.
General and health insurers should offer this product from April 1, 2020 onwards and doesn't need any pre-approvals of the IRDAI. The regulator has fixed the minimum entry age as 18 and maximum as 65 years, The policy has no exit age and has provision for lifelong renewability.Depedents will be covered from the age of three minths to 25 years subject to the definition of `Family'.If the depedent above 18 years of age and financially independent, he/she would be ineligible for coverage in the subsequent renewals. ,
The standard product should have the basic mandatory covers, no add-ons or optional covers are allowed to be offered along with the standard product and the insurer may determine the price keeping in view the covers proposed to be offered subject to complying with Irdai guidelines, it added.
"No deductibles are permitted in this product. No plan variants are allowed. Standard product shall be offered on family floater basis also and it should not be combined with critical illness covers or benefit based covers," the regulator said.
The product will be named as Arogya Sanjeevani Policy, succeeded by the name of the insurance company. No other name is allowed in any of the documents, Insurance Regulatory and Development Authority of India (Irdai) said in its guideline.
The insurer may determine the price keeping in view the covers proposed to be offered confirming to the existing norms.
"The standard product shall be offered on indemnity basis only and the policy tenure shall be for a period of one year".
"The health insurance market is having a number of individual health insurance products. Each product has unique features and the insuring public may find it a challenge to choose an appropriate product. Therefore,…the Authority has decided to mandate all general and health insures to offer the standard individual health insurance product," the regulator said.
The mandatory covers under the standard health product include hospitalisation expenses, other expenses such as cataract subject to sub-limits, dental treatment and plastic surgery that have been necessitated due to disease or injury, all day care treatments and expenses on road ambulance subject to a maximum of ₹2,000 per hospitalisation.
It should also include expenses incurred on hospitalisation under AYUSH treatment, pre-hospitalisation expenses incurred for a period of 30 days prior to the date of hospitalisation, post-hospitalisation expenses for a period of 60 days from the date of discharge from hospital.
With respect to cumulative bonus, Irdai said sum insured (excluding the bonus) should be increased by 5% for each claim-free policy year, subject to condition, the policy is renewed without a break subject to maximum of 50 per cent of sum insured.
The product may be distributed across all channels including micro insurance agents, point of sale persons and common public service centers.
"The standard product shall comply with portability provisions and the premium under this product shall be pan India basis and no geographic location or zone pricing is allowed," it said further.
The standard product may be offered as micro insurance product, subject to sum insured limits and the product can be launched without prior approval from the authority, subject to certain conditions, Irdai said.
Meanwhile, IRDAI has clarified that `Migration” means, the right accorded to health insurance policyholders (including all members under family cover and members of group health insurance policy), to transfer the credit gained for pre-existing conditions and time bound exclusions, with the same insurer.
Similarly, “Portability” means, the right accorded to individual health insurance policyholders (including all members under family cover), to transfer the credit gained for pre-existing conditions and time bound exclusions, from one insurer to another insurer.
For individual policies, if the policyholder is continuously covered in the previous policy without any break for a period of four years or more, migration shall be allowed without subjecting the policyholder to any underwriting to the extent of the sum insured and the benefits available in the previous policy.
Migration from group policies to individual policy will be subject to underwriting. Where underwriting is done, the insurance company shall convey its decision to the policyholder within 15 days.
A policyholder desirous of migrating his/her policy will be allowed to apply to the insurance company to migrate the policy along with all members of the family, if any, atleast 30 days before the premium renewal date of his/her existing policy. However, if the insurer is willing to consider even less than 30 days period, then the insurer may do so.
Insurer shall not levy any charges exclusively for migration.
Policyholder should initiate action to approach the insurer to exercise migration option well before the renewal date to avoid any break in the policy coverage.Individual members, including the family members covered under an indemnity based group health insurance policy shall have the right to migrate from such a group policy to an individual health insurance policy or a family floater policy, thereafter Portability will be allowed.