Written by Vaidyanathan Ramani
Regulations and changes play an integral part in defining the growth and future of any industry and the insurance industry is no less. The Indian insurance industry – which is regulated by the Insurance Regulatory and Development Authority of India (IRDAI) – goes through a plethora of changes and developments every year to make the insurance products much more customer-centric. This helps consumers take maximum advantage of their insurance products and they also start showing much more faith and trust in insurance for financial well-being.
Talking about the health insurance industry in particular, as it was the most affected industry this year due to the ongoing COVID-19 pandemic, the industry went through a plethora of changes to provide protection to maximum number of people in India. The changes and developments introduced were extensively leveraged by the insurers to offer products that help consumers better manage their health and stay adequately protected.
Here’s a quick glance at the key changes in the health insurance industry in India in 2020.
Introduction of standard health product – Arogya Sanjeevani
In its wonderful attempt to make quality healthcare within the reach of one and all, the IRDAI in its guidelines issued on January 2nd January, 2020 directed all general and specialised health insurers to start selling standard health insurance product – Arogya Sanjeevani Policy – from 1st April 2020. A significant reason for introducing a standard health insurance plan was that the current health insurance products available in the market are a bit complex for a common man to understand. The introduction of a standard health product has helped in making the buying process much simpler and has played a major role in developing strong faith and trust in customers towards the health insurance ecosystem.
Developments in health insurance industry due to COVID-19 pandemic
Ever since the onset of the COVID-19 pandemic in India in the month of March, IRDAI has been consistently putting in extra efforts to handle the crises by a slew of measures in order to ensure utmost convenience to the customers.
The first and foremost development that happened in the insurance space following the pandemic was the inclusion of treatment for COVID-19 under health insurance policies. Usually, pandemics are not covered under health and life insurance policies. This was a welcome move as a treatment for COVID-19 amounts to approximately Rs 2 lakh – Rs 4 lakh for 14-day hospitalisation. With the pandemic being covered under health insurance, people could take quality treatment without worrying about the cost.
Further, some changes were even implemented in the underwriting rules for issuing health insurance policies to the customers. Keeping in mind the nation-wide lockdown, the regulator directed all insurers to issue health insurance policies to customers through telemedical wherever possible if conducting a mandatory physical medical test was not possible. The authority even allowed the use of e-KYC for renewal or issuing of new policies to the customers.
Under another set of guidelines, customers were allowed to give approval for issuing a health policy through video KYC or OTP in place of physical signatures. This helped people stay at home and follow social distancing rules and yet get a policy issued for financial well-being.
In the month of July, on the advice of the IRDAI, insurers came out with COVID-19 specific health insurance policies named – Corona Kavach and Corona Rakshak. Both these health insurance policies were introduced to provide financial protection to people falling under the lower income-group so that they can avail the best possible treatment for COVID-19.
Within a few months after the products were launched, over 3 million policies were bought by customers to stay financially secure. These products increased the trust and faith amongst consumers in insurance products up to a great extent, all thanks to the excellent pricing of these products.
In the month of September, the regulator even allowed covering treatment through telemedicine under a health insurance policy. Telemedicine will be a boon for people residing in Tier 2 and 3 cities as they will not have to travel to Tier 1 cities for doctor’s consultation and can rather discuss their condition with a doctor from the comfort of their homes and get the charges covered under OPD expenses through health insurance.
Standardisation of health insurance policies
Effective 1st October 2020, revamped health insurance policies were introduced which offered wider coverage to the customers. For the customers, the revised policies will mean cover for more illnesses and procedures at affordable prices. The policies will now offer coverage for many new ailments such as mental illness, age-related degeneration, internal congenital diseases and artificial life maintenance.
Some other popular illnesses for which cover will be provided under your insurance plan include behaviour and neurodevelopment disorders, genetic diseases and disorders and cover for puberty and menopause-related disorder.
Also, the definition of Pre-existing Diseases (PED) has been modified to cater to the needs and requirements of customers. As per the new guidelines, any disease/s or ailment/s that is/are diagnosed by a physician 48 months before the issuance of the health cover will be classified under PED. To ensure that policyholders suffering from pre-existing diseases get adequate health insurance coverage, IRDAI has mandated the insurers to include permanent exclusions only after the due consent of the customers.
Moreover, going forward, insurers cannot reject a claim requested by a policyholder after the insured has paid the premium for the policy for 8 consecutive years. This means a customer’s health insurance claim won’t be rejected from the 9th policy year unless you have indulged in fraud or are making a claim for a permanent exclusion.
These new revisions in the existing laws around health insurance are believed to benefit the customers to a great extent. The revisions are set to make the coverage way more comprehensive and efficient for the policyholders.
Introduction of EMI option for premium payment
Amidst the ongoing COVID-19 outbreak, the IRDAI has come out with a modification allowing customers to pay their health insurance premiums in instalments. The premium mode (frequency) can be monthly, quarterly, or half-yearly as per decided by the insurer. The modification will play a major part in increasing affordability in the health insurance industry.
With all these regulations in place, the future looks promising for the health insurance industry with several modifications in the regulatory framework which will lead to a wave of change in the way the industry conducts its business and engages with its customers. Also, several demographic factors such as growing middle class, young insurable population, and growing awareness for the need of adequate protection will support the growth of health insurance.
With the new modifications in place, the health insurance penetration which today stands at 4 per cent only is expected to grow and expand in India.
The author is the Head of Product and Innovations at Policybazaar.com. Views expressed are that of the author.
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