IRDAI's Proposal to Slash Waiting Periods and Entry Age Limits

Posted on: Mar 22, 2024 | 3 mins | Written by: HDFC ERGO Team

IRDAI's Proposal to Slash Waiting Periods and Entry Age Limits

IRDAI Plan to Shorten Waiting Period & Lift Age Restrictions

Any pre-existing ailment that a policyholder has before taking the health insurance is a pre-existing disease. According to IRDAI, pre-existing diseases include conditions diagnosed 48 months before purchasing health insurance policies - such as asthma, high blood pressure (BP), thyroid condition or diabetes.

Pre-existing diseases (PED) can be very costly to treat due as its a chronic illnesses. Unfortunately, most health insurance plans only cover pre-existing diseases after two to four-year waiting periods as it increases the insurer liabilities accordingly.

Pre-existing disease waiting periods in health insurance plans define when you must wait before beginning to use benefits provided under your policy for pre-existing medical conditions that already exist. It usually starts between six weeks and one year from when coverage becomes effective for these health issues.

Waiting periods vary among insurance providers for pre-existing diseases; policyholders cannot file claims until after that period ends. However, recently the Insurance Regulatory and Development Authority of India proposed shortening pre-existing disease waiting times and lifting any cap on maximum entry-age purchases of health policies.

As an impressive move toward critical illness insurance policyholders, the insurance regulator recently proposed cutting the waiting period to cover pre-existing diseases (whether disclosed or undisclosed) from four years down to three. Furthermore, senior citizens can now purchase health coverage without worrying about having their maximum age of entry at 65 being limited - something existing products do not permit.

Let's understand more about this news in detail.

Information About Reduction In PED & Entry Age Capping In Health Insurance

IRDAI has mentioned that there will be no entry restrictions for health insurance coverage based on age. Current plans only permit entry until age 65, limiting the coverage provided. The proposed changes would help the elderly get full advantage of insurance benefits.

The waiting period for individuals with pre-existing diseases will decrease to three from four years. Hence, these changes will bring huge relief to all health insurance policyholders.

Health insurers have also been instructed to develop customised health plans tailored specifically for target groups such as students, children and senior citizens. There must also be a separate channel to address claims or any grievances they confront in such products.

Draft norms have also mandated insurers to offer installment payments for premiums and coverage for one or more systems of Ayush treatment in hospitals or healthcare facilities.

Also, several times insures increase the premium when the individual files a claim. So, the draft norms mention that for individual products, any increase in premium during policy renewal should reflect overall portfolio experience rather than individual policy experiences. However, discounts in premiums may still be granted depending on an insurer's assessment of individual policyholder performance in terms of claim experience.

How This Move Will Benefit The Masses?

The Insurance Regulatory and Development Authority of India (IRDAI) has taken a significant step toward enhancing the accessibility and inclusivity of health insurance by proposing crucial amendments. The benefits for the masses are:

• Firstly, the decrease in the waiting time for pre-existing conditions from four to three years is a decisive shift. This implies that policyholders will be able to access benefits for pre-existing illnesses earlier, and thus, it will help them to reduce the financial burden of such health issues.

• Secondly, the proposal to eliminate the cap on the maximum entry age for health insurance purchases is a welcome change. This decision promotes the extension of health coverage to a wider demographic, especially senior citizens, who may face difficulties in obtaining insurance due to age restrictions.

• By lifting age restrictions, IRDAI paves the way for more individuals to secure health insurance, ensuring comprehensive coverage and financial protection against unforeseen medical expenses.

The Benefits Of IRDAI's Proposal

• The proposed changes by the Insurance Regulatory and Development Authority of India (IRDAI) mark a pivotal step towards improving public access to health insurance.

• Reducing the waiting period for pre-existing diseases ensures that individuals with existing health conditions can avail of coverage more promptly, alleviating financial burdens associated with medical expenses.

• Additionally, establishing a cap on the entry age makes health insurance more inclusive, allowing a broader demographic to secure coverage. These measures collectively enhance the overall accessibility and affordability of health insurance, contributing to a healthier and financially protected population.

• By fostering a more efficient health insurance landscape, the IRDAI's initiatives prioritise the public's well-being, reinforcing the notion that adequate healthcare should be accessible to all, irrespective of their health history or age.

Conclusion

The IRDAI's proposed reductions in waiting periods for pre-existing diseases and the introduction of an entry-age cap signal a positive shift toward a more inclusive and accessible health insurance environment in India.

These measures not only streamline the process of obtaining coverage for individuals with existing health conditions, but also broaden the demographic scope, ensuring a more comprehensive and equitable healthcare system. The regulator's commitment to enhancing efficiency and inclusivity in health insurance reflects a significant stride towards fostering the well-being of the public.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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