The purpose of having a good health insurance policy is to protect the financial situation of one’s family in case of a medical emergency. The new guidelines work toward benefiting the policyholder by updating and modulating the policy norms so that there is no conflict of interest. The first and the most critical step towards this change was made in October 2013 which has been the introduction of Guaranteed Renewability of health insurance throughout life with continuous benefits. It was beneficial for both the policyholder as well as the insurer. It was a sigh of relief for the policyholders who were not insured under post-retrial medical benefits. Also, the insurers could enjoy the continuous flow of premiums as a result of guaranteed renewability.
Health Insurance Policy Before the Guaranteed Renewability Plan
Health insurance policies had some strict rules for policy renewal before the changes were implemented in October 2013. This was a major disadvantage that the policyholders had to face as they could not get health coverage. Earlier, the policy renewals were based on the claims made in previous years. In case the policyholder made a claim, they would have to pay increased premiums. This made it difficult for them to get adequate coverage and put an extra burden on one’s pockets. Another crucial factor was age. Primarily, many insurance companies covered individuals until the age of 65 years after which the policyholder found it difficult to renew the health plan.
Health Insurance Policy After the Guaranteed Renewability Plan
After the new guidelines by IRDAI, the new generation health insurance policy now provides guaranteed renewability, which means, a policy that can now be renewed for an entire lifetime. The renewal is possible irrespective of the claims made earlier or the age of the policyholder. This implies that now the policyholder can get a cover even after the age of 65 years, getting it renewed throughout her life.
Difference Between Traditional and New Age Health Insurance
- Purchase Journey: In the case of buying traditional insurance, the steps involved are complicated and multiple. The policyholder has to buy a policy through an insurance agent and pay an extra bill as a commission. This makes the customer confused and irritated. On the contrary, buying a new age policy is simple and rapid. You can now digitally buy a health insurance policy for you and your entire family. It is as simple as shopping online on any e-commerce website.
- Documentation: While buying a traditional health insurance policy, you need to undergo lengthy paperwork to keep a track of all the details and documents involved which is a strenuous exercise on the part of the policyholder. On the other hand, new-age insurance processes digitally. This is convenient and you do not have to maintain a huge pile of paperwork also.
Features of New Generation Health Insurance Policy
- Claim Policy: The new age insurance offers easy to use claim policy. The process of claim is of utmost importance in determining the credibility of the insurer. Therefore, the new generation of insurers addresses the issue by providing customer-friendly ways to provide hassle-free claim settlements.
- Portability Benefits: The new generation of insurance policy providers now offers portability benefits. This means that if you want to change your insurance policy from one insurer to another or from one plan to another, you can do so without losing upon the already gathered benefits from the previous policy. According to IRDAI, your new insurer should give you the credit you obtained from your old insurer for the pre-existing conditions. Your new insurer must insure you at least up to the amount insured under your previous policy. You can do so only at the time of renewal of the policy.
- Family Floater Plans: The new generation health insurance policy has the procedure of buying health insurance that covers the entire family. Now you don’t have to buy health insurance covers separately for your family. You can simply avail of this benefit by buying a family floater plan.
- Critical Illness and Additional Sum Insured: With the change in the insurance policy, you can now avail the benefits of additional coverage such as critical illness and accidental hospitalisation at no extra cost. These plans provide extensive financial assistance in case the policyholder is diagnosed with specific and chronic diseases. Some policies also cover pandemics like COVID without the need to buy a separate policy.
How New Generation Health Insurance is Beneficial at Young Age?
Today’s generation is well-informed and understands the importance of financial independence. Their work culture is more of a sedentary nature making them more prone to medical ailments such as diabetes, hypertension, and other lifestyle-related illnesses. This scenario makes it critical for the younger generation to have a health insurance policy. Various reasons which make it necessary for them to buy a health insurance policy are:
- Comprehensive Cover: Many new-age health insurance policies provide wide coverage, especially for the millennials such as providing claims upon expenses incurred at daycare procedures, OPD, maternity benefits, and much more.
- No-claim Year Bonus: The policyholder can receive up to 100% of the claim bonus in the following year in case they have not made any claims in the previous years.
- Pre-existing Diseases: Buying health insurance at a younger age is beneficial as the pre-existing diseases get covered automatically.
- Less Premium: If you will buy a policy at an early age, the premium amount will be much lesser.
Conclusion
IRDAI’s latest move in the insurance sector benefits both the insurer and the policyholder. It has made policyholders’ lives easier by providing benefits such as insurance portability, no-claim bonus, critical illness coverage, and much more. The insurers also benefited from a steady flow of premiums as a result of guaranteed renewability plans. The shift is unquestionably in the right direction.
