Consumers often worry that their Health Insurance premiums will go up or in the worst case Insurers will deny policy renewal in case of filing any claims. If a critical illness is detected, consumer may need to file a claim for diagnostic or in-hospital treatments. This should not result in insurers designating a customer uninsurable given possibility of future claims. Regulators have provided clear guidelines in this regard.
The Indian Insurance regulator, IRDA, has issued clear guidelines in this regard in the :
“A health insurance policy shall be ordinarily renewable except on grounds of fraud, moral hazards or misrepresentation. The renewal of the health insurance policy sought by the insured shall not be denied arbitrarily. And if denied, shall provide the policyholder with cogent reasons for non-renewal of the health insurance policy” – Health Insurance Regulations (2012)
Clearly, the insurers need to provide very good reasons for not renewing existing policy. In particular, IRDA has also clarified that:
“….the insurer shall not reject the renewal of the health insurance policy on the ground that the insured had made a claim or claims in the previous or earlier years.”
While the renewal of policy is protected by law, IRDA has given guidelines for increase in premium as well. It is the responsibility of the insurer to communicate any reasons for increase in insurance premiums clearly and at least three months in advance to the insured.
Guidelines state that:
“The insurers shall intimate such revision to the policyholders at least three months prior to the date of renewal of the cover. In such cases where the insurer has revised the premiums or the terms and conditions of the policy, the insurer shall send a renewal notice for health insurance policies to the policyholder”
“Where such renewal notice envisages a premium higher than that paid in the previous year, the notice shall explain the reason for the increase in premium and also quantum of the increase in premium which is in accordance with the disclosures earlier made in the prospectus”
Insurers will generally inform customers about the upcoming expiry of the policy and renewal requirements. However, it is the responsibility of the customer to renew the policy in time to ensure continuity of policy benefits including no waiting period, coverage of preexisting disease carried over from previous policy and accumulation of no-claim bonus if any. It is advisable that customers renew their policies at least 30 days in advance to avoid a break in coverage.
While insurers are required to allow renewals upto 30 days from policy expiry, policy benefits are not available during this period.
“The insurer shall provide for a mechanism to condone delay of renewal up to 30 days from the renewal due date, in line with break in policy. For the purpose of this clause, the insurer shall also state, including but not limited to, the fact that coverage would not be available for break in period.”
In some cases, such as critical illness, policy specific renewal clauses may exist:
“Benefit based policies where policies terminate on happening of the event as per the terms and conditions of the policy; renewability clause shall explicitly state such conditions in the promotion material and the policy document. Ex. Critical illness benefits policies.”
In summary, Insurers cannot deny renewals without due explanation. Customers have the right to ask insurers for full details regarding any denials. As always, TrueCover aim to provide consumers all the information they need to maximise their insurance benefits and continue to do so for a long time.