IRDA new circulation: Pay Health Insurance Premium in Instalments

IRDA’s Big Move That Will Change How You Pay Your Health Insurance Premium and More

For most of us, paying health insurance premium is a question to look at our pocket. If you pay a health insurance premium for yourself, family members, and parents, then chances are your palm is on your face at the time of renewal.

If you don’t have a health policy, the reason you always step back despite knowing its importance could be its annual premium amount.

Yes, you may get tax benefits when it comes to the premium under section 80D, but to pay the premium all at once, is too much. 

Isn’t it? Well, if that’s the case, then I have got good news for you: Now you can pay your health insurance premium in instalments with no change in the premium.

The Insurance Regulatory and Development Authority of India (IRDAI) has passed a circular in which it gives more freedom to the insurance companies and relief to consumers. 

Let’s see: What’s the IRDA’s big move and how it will be beneficial to you and insurers.

Minor modifications that are allowed to the insurance companies to make in the health products without seeking IRDA’s approval (From the circular passed by IRDA):

1) Addition of premium payment options (frequency/payment of premiums in instalments).

2) Addition of distribution channels.

3) Change in the base premium rates, not exceeding + or – 15% of the premium rates of originally approved individual product.

4) Addition of approved standalone riders or add-ons to the approved individual health insurance products.

5) Minor Changes in Policy Wordings.

6) Change in the name of the approved product subject to complying with the provisions of Clause (4) (xii) of Chapter – II of Guidelines on Product Filing.

7) Change in sum insured options made available to the policyholder within the sum insured range filed.

8) Decrease in minimum and/or increase in maximum premiums.

9) Decrease in minimum and/or increase in maximum entry age.

10) Extension of the premium table to provide premium rates for lower and/or higher ages or longer and/or shorter policy terms or premium payment terms.

11) Expansion of the list of daycare procedures to be offered.

12) Addition of Critical Illnesses covered under benefit based products.

How Are These Modifications Going To Be Beneficial To You?

a) You can pay the premium monthly, quarterly, half-yearly, and annually.

What could it mean to you? 

More flexibility. Don’t have to look at your pocket at the time of renewal. Easy on pocket. Worry-free mind.

b) IRDA has given its nod to the insurers that allow them to increase or decrease the insurance premium by up to 15 per cent, subject to their claim experience in a particular sector. Therefore, in case an insurance company faces higher loss ratio or higher claim, it need not file permission to the IRDAI for increasing the insurance premium.

What could it mean to you? 

Possible changes in premiums up to +/- 15% of the original premium. Lower or higher premiums as per the claims filed under a particular product. In the case of lower number of filed claims, lower premium. And, in the case of a higher number of filed claims, higher premium. 

c) IRDA has also given its nod to the insurers to add approved standalone riders or add-ons to approved individual health insurance products without having to file the product again. Expansion of the list of offered daycare procedures and addition of critical illnesses covered under benefit-based products.

What could it mean to you?

You can head on to have add-ons to your base plan. Often, insurers come up with new add-ons or riders to enhance the coverage, which you can add those to your base plan.

Moreover, most insurance companies may look forward to expanding the list of daycare procedures, giving you more options.

d) Insurance companies can make minor changes in the policy document without making any changes in the product policy: no changes in the time-bound waiting period, coverage terms and conditions, and should not impose any deductible, co-pay or sub-limits afresh. 

What could it mean to you?

More clarity. More transparency. Better understanding of the product, exclusions, and claims process.

More Heads Insured — More Worry-free Lives

This circular by IRDA is a big move, which will give more freedom to insurers, increase insurance penetration in India, flexibility to consumers to pay the premium and possibility of changes in entry age by insurance companies.

Earlier, the option of premium payment in instalment was available only under life insurance products. Adding this to health insurance products could increase the number of people who will opt for health plans in India. Perhaps, an incentive for the people to buy an insurance cover.

And, ultimately, increase in the number of insured people and deepening of insurance penetration.

As per IRDA, all this comes into force with immediate effect.

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