IRDAI removes age cap on health insurance purchase

News Excerpt:

The Insurance Regulatory and Development Authority of India (IRDAI) has removed the age limit for purchasing health insurance policies, with effect from April 1, 2024.

More about the news:

  • Previously, individuals were restricted to buying new insurance policies only until the age of 65.
  • With the recent changes, anyone, regardless of age, is now eligible to purchase new health insurance.
    • Now 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.
  • The coverage is subject to offer and acceptance between the Insured and Insurer based on affordability for senior citizens and viability for Insurers

Significance of the move:

  • This move by the IRDAI aims to create a more inclusive healthcare ecosystem in India and to encourage insurance providers to diversify their product offerings.
  • This may lead to better access to healthcare and reduced burden of medical expenditure for senior citizens.

Other changes introduced:

  • 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.
  • 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.
  • IRDAI has also reduced the health insurance waiting period from 48 months to 36 months. 
    • All pre-existing conditions should be covered after 36 months, regardless of whether the policyholder disclosed them initially or not. 
    • In other words, health insurers are prohibited from rejecting claims based on pre-existing conditions after these 36 months.
  • 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.

The Insurance Regulatory and Development Authority of India (IRDAI) 

  • IRDAI is an autonomous and statutory body that is responsible for managing and regulating the insurance and reinsurance industry in India.
  • IRDAI is a 10-member body- a chairman, five full-time members, and four part-time members.
  • It was constituted under the Insurance Regulatory and Development Authority Act, 1999 and it is headquartered in Hyderabad.

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