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Health Insurance in India - 3 New Useful Changes You Should Know

Team AckoJan 17, 2024

Having health insurance in India proves to be a boon in case of a medical emergency. Things like accidents or your nominee showing sudden signs of illness can put your monthly budget in jeopardy. In such a situation you may think of using your savings for the sake of receiving proper medical treatment. This is where buying a medical insurance policy beforehand proves to be beneficial. In India, the entire insurance sector is regulated by the IRDAI i.e. the Insurance Regulatory and Development Authority of India. This institution is responsible for processes like licensing an insurance company, checking if all the companies comply with the rules and regulations, publishing official reports, and much more. They also strive for the betterment of this industry and ensure fair practice towards the policyholder as well as insurers.

IRDAI also suggests certain changes that can be brought about for the enhancement of insurance products. In this article, we will take a look at a few of the useful changes brought about in medical insurance in India that you should be aware of. Let’s get started.

Contents

In this article, we will take a look at a few of the useful changes brought about in medical insurance in India that you should be aware of. Let’s get started.

#1 Innovative products

The insurance industry, is deemed as dull and stagnant for offering redundant products that lack innovation and fail to kindle interest in the masses. To break this notion, insurance companies have been asked to go all out and create breakthrough insurance products or “pilot products”. The product can be tested for a year (it will be of closed-ended nature). These should be designed for general insurance and not life or term insurance. The idea is to create and test products for risks that were not covered by insurers in the past. Insurance companies are also given the freedom to withdraw or continue with the product after 5 years. However, keeping the policyholder’s best interests at heart, any policyholder who chooses to opt for a pilot product should be ported to one of the regular products if the pilot product is withdrawn.

#2 Benefits for being healthy

By far, health insurance in India focused on the financial aspect of helping the policyholder in treating an ailment. However, not many benefits were given to those who keep themselves fit and healthy at all times. Since the year 2013, policyholders who bought a medical insurance policy at an early age and renewed the policy in time were rewarded. According to recent guidelines, insurers are to incentivise those who take active preventive measures and take care of their health. This should be clearly disclosed in the terms of medical insurance in India or in the policy document.

Under this change, however, health insurance companies cannot offer discounts on any third-party services like health club memberships if they have tie-ups with such vendors. But, discounts on diagnostic, pharmaceuticals or consultation services may be allowed if they are a part of the insurer’s network.

#3 Cumulative bonus

Until now, a no claim bonus was offered to the policyholder in case of claim-free years. This, however, did not have an impact on the sum insured. With the cumulative bonus, a policyholder can get a certain percentage added in the amount of sum insured in case of a claim-free year. This will help increase the amount of money that can be used for better medical treatment in the future. The increased amount of sum insured will not be proportional to the premium of medical insurance in India. The cost of the policy will not be in accordance with the cumulative bonus awarded to the policyholder. Thus, the cost of an insurance policy will remain more or less the same, but the sum insured will increase with each consecutive claim-free year.

The Bottom Line

The insurance industry is undergoing a positive change that will result in better and innovate products. As the article points out, IRDAI and insurance companies are working hard to deliver for the betterment of Insurance in India. Policyholders can contribute by revealing correct information while being honest in order to receive fair and customized products.

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Disclaimer: *Except for exclusions like maternity benefits, undisclosed diseases, etc. Please check policy wordings for more details.

**The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.