Irdai takes big step on insurance claims; here is what you get now

The Insurance Regulatory and Development Authority of India (IRDAI) has said in a statement, that health insurance companies will not be allowed to contest claims once the premium has been paid for a continuous period of eight years.

The insurance regulator explained that the step has been taken to standardise the general terms and clauses incorporated in indemnity based health insurance (excluding personal accident and domestic/overseas travel) products by simplifying the wordings of general terms and clauses of the policy contracts and ensure uniformity across the industry.

The Irdai is also released a fresh set of guidelines for the same, which it said, will be applicable to all policy contracts of the existing health insurance products that are not in compliance with these guidelines. These contracts will be modified as and when they are due for renewal from April 1, 2021, onwards.

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"After completion of eight continuous years under the policy no look back to be applied...After expiry of moratorium period (of eight years) no health insurance claim shall be contestable except for proven fraud and permanent exclusions specified in the policy contract," Irdai said.

The regulatory body said that the insurer shall settle or reject a claim, as the case may be, within 30 days from the date of receipt of the last necessary document. If there is a delay in payment, the Company shall be liable to pay interest to the policyholder from the date of receipt of the last necessary document to the date of payment of claim at a rate 2% above the bank rate.