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Key changes in Health Insurance announced by IRDA

As you know, in Feb 2013 Insurance Regulatory and Development Authority (IRDA) had announced comprehensive regulations pertaining to Health Insurance policies. The objective of the same was to bring about standardization in the medical insurance policies.

In the absence of any uniform guidelines, insurers were offering vastly different products thereby making it difficult for the people to make an informed choice when buying such a policy.

Recently, IRDA has notified certain amendments to the aforesaid health insurance guidelines.


1. Provision for covering Non-allopathic Treatments
As per IRDA's original guidelines on AYUSH (Ayurveda, Yoga, Unani, Siddha and Homeopathy) coverage:
"Insurers may provide coverage to non-allopathic treatments provided the treatment has been undergone in a government hospital or in any institute recognised by government and/or accredited by Quality Council of India/National Accreditation Board on health or any other suitable institutions."

The revised guidelines are as under:
"Insurers may provide coverage to non-allopathic treatments provided the treatment has been undergone in a government hospital or in any institute recognized by government and/or accredited by Quality Council of India/National Accreditation Board on health."

The words "or any other suitable institutions" have been deleted. So now you have to be very careful in choosing where you propose to treat yourself through non-allopathic options, provided your policy does cover such treatments.

2. Provision on Cumulative Bonus
The original guidelines stipulated that the insurers could offer cumulative bonus only on the "indemnity-based" health insurance policies (e.g. the conventional medical insurance policies) and not on the "benefit-based" policies (e.g. the critical illness policies, personal accident).

This condition has been relaxed a bit and insurers can now offer cumulative bonus on personal accident cover, even though it is a benefit-based policy.

(By the way... indemnity-based policies are those wherein the actual expenses are reimbursed; whereas benefit-based policies are those wherein a pre-specified fixed amount is paid.)

3. Provision regarding Free Look Period
"All Health Insurance Policies shall have a free look period" was one of the conditions incorporated in the original guidelines. Under this provision, you get 15 days, from the date of receipt of policy, to review the policy terms and conditions, and return the same if it is not acceptable. 

This clause has been reworded as under:
"All new individual health insurance policies except those with tenure of less than a year shall have a free look period".

So, henceforth, someone buying a policy whose term is less than a year will not have the benefit of returning the policy if the same is not acceptable to him/her.

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