“Insurers must ensure they offer health insurance products catering to all age groups. They may design products specifically for senior citizens, students, children, maternity, and other groups as specified by the Competent Authority,” stated a notification issued by the IRDAI
Insurers are also prohibited from refusing to issue policies to individuals with severe medical conditions like cancer, heart or renal failure, and AIDS
Hyderabad:
In a long awaited move, insurance regulator IRDAI has lifted the age cap on purchasing health insurance policies, effective from April 1, 2024.
Previously, individuals were restricted to buying new insurance policies only until the age of 65. However, with the recent changes that came into effect on April 1, 2024, anyone, regardless of age, is now eligible to purchase new health insurance.
“Insurers must ensure they offer health insurance products catering to all age groups. They may design products specifically for senior citizens, students, children, maternity, and other groups as specified by the competent authority,” stated a notification issued by the IRDAI.
Following the recent notification, insurers are also prohibited from refusing to issue policies to individuals with severe medical conditions like cancer, heart or renal failure, and AIDS.
The notification also reduces the waiting period for coverage of pre-existing conditions from 48 months to 36 months. After this period, all pre-existing conditions must be covered, regardless of initial disclosure.
However, waiting period norm of pre-existing disease will not be applicable for Overseas Travel Policies. Travel policies can only be offered by general and health insurers, it said.
Rakesh Jain, CEO, Reliance General Insurance said, “The Insurance Regulatory and Development Authority of India’s (IRDAI) decision to abolish age restrictions on health insurance is a ground-breaking move that opens the doors of comprehensive healthcare coverage to all, irrespective of age. For senior citizens, this initiative signifies an end to the constraints that previously barred many from securing health insurance past a certain age. It will encourage long-term health planning and innovation in insurance products, catering to diverse age groups’ needs.”
The competitive market dynamics spurred by this change may result in improved offerings and services for consumers. Insurers will now be encouraged to design products that cater specifically to the needs of senior citizens, including those with pre-existing conditions. However, insurers must adapt underwriting practices to manage increased risks associated with insuring older demographics effectively. With no age limit, the opportunity for adequate protection against medical expenses is now a reality for everyone, marking a significant step towards a more inclusive and accessible healthcare ecosystem, he elaborated.
Moreover, IRDAI has mandated a transition from indemnity-based health policies (which reimburse hospital expenses) to benefit-based policies, providing fixed payouts upon diagnosis of covered illnesses. This shift aims to enhance clarity and predictability in insurance offerings, ensuring policyholders receive timely and transparent benefits.
This move by the insurance regulatory body aims to create a more inclusive healthcare ecosystem in India and to encourage insurance providers to diversify their product offerings.
IRDAI has also directed health insurance providers to introduce tailored policies for specific demographics, such as senior citizens, and establish dedicated channels for handling their claims and grievances.
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, it said.
Policyholders with benefit-based policies can file multiple claims with various insurers, enhancing flexibility and options, it said.
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, it added.
“It’s a welcome change as it now opens avenues for people above 65 to seek health cover. Insurers, based on their Board-approved Underwriting guidelines, can cover people above 65. The coverage is subject to offer and acceptance between the Insured and Insurer based on affordability for senior citizens and viability for Insurers,” said an industry expert.
Furthermore, insurance companies 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.
Sumit Bohra, president of Insurance Brokers Association of India (IBAI), said its welcome move by the regulator to remove the entry age barrier of 65 yrs for purchasing health cover. It would be now left to the insurers to design the products which is suitable to this age group. The new product should certainly cut down on the waiting period for pre-exiting disease or a graded claim pay out should happen in first three years and full claim post four years of continuous renewal.”
The senior citizen health insurance market is quite huge either having no coverage or poor coverage in terms of smaller sum insured which is not enough to foot the current hospital bills. This is a great opportunity to innovate and penetrate the underserved market, added Bohra.
Sharad Mathur, MD & CEO, Universal Sompo General Insurance Company said, “By removing the age limit of 65 years for new health insurance policies, IRDAI has extended accessibility to health insurance for everyone, ensuring individuals can obtain comprehensive coverage regardless of age. Furthermore, the insurance regulator has directed coverage for pre-existing medical conditions, strengthening policyholders’ insurance protection. This move is commendable, benefitting both senior citizens and working adults caring for ageing parents.”
Not only will it improve access to quality healthcare services, but also encourage more Indians to secure their loved ones against serious medical conditions and illnesses alike. Besides, treatments under alternative medical systems will also be covered up to the sum insured amount, granting policyholders flexibility in choosing their preferred treatment options, explained Mathur.
“We welcome the transformative stride taken by the IRDAI towards creating inclusivity in healthcare ecosystem. The removal of the age cap on health insurance policies will provide senior citizens with complete peace of mind, knowing that they have access to quality healthcare when they need it most during the golden years of their life,” said Prasun Sikdar, chief executive officer, ManipalCigna Health Insurance
ManipalCigna had launched ‘Prime Senior’ plan that gives flexibility with lower waiting periods and provides coverage for pre-existing disease conditions from 91st day onwards, he added.
From the standpoint of insurers, the amendment has unlocked a new world of possibilities when it comes to product design, enabling insurance companies to create new health products tailored precisely to diverse customer needs. These developments should ultimately serve the interests of senior citizens and take India one step closer to its goal of achieving universal health care for all by 2030, said Mathur.
Anuj Parekh, Cofounder and CEO at Bharatsure said,” IRDAI’s decision to remove age restrictions for entry into health insurance policies is indeed a step towards inclusivity in the insurance sector. However, it’s essential to acknowledge that insurers may not be enthusiastic about catering to the 65+ age bracket. Even if they do, the terms and conditions of such policies may not be entirely favourable to the customer.”
For instance, while a 70-year-old individual may now have the opportunity to purchase health insurance for the first time, they will likely encounter stringent terms, exclusions, and possibly high premiums. It’s a reality that the 65+ age group often comes with pre-existing conditions, prompting insurers to carefully evaluate the profitability, sustainability, and scalability of policies for this demographic. In light of these considerations, he explained.
individuals seeking health insurance post-retirement may find it advantageous to continue with employer-offered health insurance, where insurers can provide more competitive premium rates and favorable policy conditions, suggested Parekh.