Author: Rupanjali Mitra Basu

Having a health insurance policy with a sufficient sum insured is needed. How else would you be able to meet the expensive treatment costs of a medical emergency?

When you opt for an optimal sum insured level for complete coverage, you cannot overlook the premium associated with it. If a high sum insured is chosen, the premium, invariably, becomes high. In such cases, you have to choose between an optimal coverage and an affordable premium and the choice is not very easy. What if you can make your health insurance premiums affordable?

There are many ways in which you can save on your health insurance premiums. Let’s find out what these ways are –

• Following a healthy lifestyle

  Your health insurance premium is directly proportional to your health and your lifestyle habits. If you practice healthy living and choose healthy lifestyle habits, your premiums would be lower and vice-versa. So, you should maintain your health as premiums for healthy individuals with no medical complications tend to be lower than premiums for individuals suffering from medical problems. Similarly, if you smoke and/or drink, your health insurance premiums would be high as these habits impact your health negatively. That is why health insurance companies charge lower premiums from non-smokers than smokers.

• Wellness benefits offered by insurers

  The Insurance Regulatory and Development Authority of India (IRDAI) has asked insurance companies to include wellness benefits in their health insurance policies to promote healthy living. These benefits offer premium discounts if you are healthy or if you practice regular exercising and adopt healthy habits. These benefits also offer discounts on medicines and wellness programs at merchants partnered with the insurer. When buying a health insurance plan, look for these wellness benefits available in the policy and use these benefits to reduce your premium amount.

• Premium discounts

  Health insurance plans also allow different types of premium discounts in the policy for making the policy more pocket-friendly. Some of the commonly available discounts include the following –

  • Family discount for covering 2 or more members under the policy
  • Discount for buying a long term plan for a period of 2 or 3 consecutive years
  • Discount for buying the policy online
  • Discount for choosing voluntary co-payment under the plan

  You can hunt for these discount in the policy and use them to reduce your premium outgoes.

• Avoiding small claims

  When you don’t make claims in a policy year, you earn a no claim bonus. This bonus either increases the sum insured free of cost or it allows a discount in the renewal premium. So, during the policy year, if you incur small medical expenses, don’t make claims for such expenses. Avoidance of claims would help you avail no claim bonus and either get a higher sum insured at the same premium or a premium discount on renewal.

• Splitting the premium between spouses

  Health insurance premiums are allowed as a deduction from your taxable income up to INR 25,000 under Section 80D of the Income Tax Act, 1961. If, however, your health insurance premium is more than INR 25,000, you can split the premium with your spouse and claim double tax benefits. This splitting is allowed if the premium of the policy is paid through two bank accounts. In that case, the insurance company might issue two tax certificates allowing you and your spouse to claim a deduction from your respective taxable incomes. For instance, say your aggregate health insurance premium works out to be INR 35,000. In this case, you can pay INR 25,000 from your bank account and ask your spouse to pay the remaining INR 10,000 from his/her bank account. This way, you can claim a deduction of INR 25,000 under Section 80D from your taxable income and your spouse can claim a deduction of INR 10,000 from his/her taxable income. This splitting would, therefore, give you higher tax deductions and reduce your tax liability.

  Premium splitting might or might not be allowed by insurance companies. So, find out from your insurer whether it would allow such splitting and provide you with two tax certificates so that you can claim dual deductions on a single policy. (Source ET article)

• Choosing a super top-up plan

  To enjoy a high cover at a low premium you can opt for a super top-up health plan. The plan comes with a sum insured and a deductible limit. If the aggregate claims made in a policy year exceed the deductible limit, the excess claims are paid by the super top-up plan. A super top-up policy can act as a supplemental coverage on an existing plan. The deductible of the plan can be taken to match the existing coverage of your policy so that claims up to the deductible get paid by the existing health plan and excess claims get covered by the super top-up plan. A super top-up plan, therefore, is a good choice for increasing your coverage while reducing the premium cost.

Which of these ways would you choose to reduce your health insurance premium?

You can choose one or all of the ways mentioned above but do be smart about buying your health insurance policy. A high sum insured doesn’t always mean a high premium and you can use the above-mentioned steps to reduce the premium effectively. To enhance the sum insured, opt for super top-up plans and get comprehensive coverage which is also light on your pockets.

Watch the below video to find out more ways on how you can lower your health insurance premiums.

The number of Coronavirus cases is increasing with no relief in sight as India is expected to record the highest number of cases in the world. Since a vaccine is still in its development stage, people are looking at health insurance plans to solve their immediate financial needs if they test positive for Coronavirus and require hospitalisation. Health insurance plans have, therefore, become important in these testing times.

Normal health insurance plans allow coverage for COVID related hospitalisation and treatment. However, the cost of consumables like gloves, sanitizers, face masks, etc., is not covered under a normal policy. Since these costs are considerable, considerable out-of-pocket expenses would be incurred even after having a health insurance policy. Moreover, home treatments for COVID might not be covered under health insurance plans. Keeping these factors in mind and the need of a health cover for COVID, two new plans were launched – Corona Kavach and Corona Rakshak. 

Both these policies cover COVID related claims. However, while the former is an indemnity policy, the latter is a fixed benefit plan. This causes confusion for individuals as to which plan they should choose: indemnity or fixed benefit? 

Indemnity health plans are those which cover the actual medical costs incurred while fixed benefit plans pay a lump sum benefit in case of claims. So, while under Corona Kavach your hospitalisation bills would be covered, Corona Rakshak would pay a lump sum benefit if you suffer from Coronavirus and are hospitalised for three continuous days. So which to choose?

Let’s analyse the options in different situations –

• When you already have a health plan

  When you have an existing health insurance policy, your policy would cover COVID related hospitalisations partially. For full coverage you can opt for Corona Kavach plan and get covered for all medical costs if you are hospitalised for 24 hours or more. 

  Alternatively, you can buy Corona Rakshak and get a lump sum benefit. This benefit would help you cover –

  • Additional medical costs not covered by your health insurance policy
  • Lifestyle expenses when you are indisposed
  • Any loan EMIs which you are unable to pay because of loss of job, salary cut or loss of income due to business shutdown

  In fact, a Corona Rakshak policy would make more sense in these cases since it would provide a holistic coverage for your financial needs when you suffer from Coronavirus.

• If you don’t have a health insurance plan

  If you don’t have a health insurance policy altogether, opt for a Corona Kavach plan. The plan would cover your hospitalisation expenses incurred on COVID with a short waiting period of 15 days. Under other normal indemnity health plans, this initial waiting period can go up to 30 to 90 days which would not be feasible for COVID which is spreading so fast. So, for your short-term needs, you can opt for Corona Kavach and get covered for the hospitalisation expenses incurred on COVID. However, you should also buy a comprehensive regular indemnity health plan for coverage of other illnesses and injuries.

  A Corona Rakshak policy can also be taken, in addition, for getting complete financial assistance for other expenses which you might incur due to COVID. While the Kavach policy would take care of your hospitalisation costs, the Rakshak policy would provide coverage for all other costs which you might incur.

The bottom line

While both Kavach and Rakshak have been developed specifically for covering COVID, the choice between the two ultimately rests in your hands and whether or not you have an existing health plan. If you have an existing health plan, Corona Rakshak would be a good solution and if you don’t, you should opt for Corona Kavach and supplement it with a Corona Rakshak plan. The premiums of both these policies are quite low. You can, therefore, choose both the plans for a comprehensive scope of coverage too. So, assess your needs and then make a choice.

The Coronavirus pandemic is getting worse day by day as more and more individuals are being infected globally. In India, as of 27th August 2020, there are more than 7.29 lakh active cases of COVID infection (Source:Worldometers) while globally, the cases have touched the 24 million mark and the numbers are still climbing. (Source: Worldometers).As more and more individuals are falling prey to the virus, the need to face the financial implication of the illness has become important. That is why there is an increased emphasis on health insurance plans to cover the medical costs incurred due to Coronavirus. While the normal health plans offered by health insurers provide coverage for COVID related hospitalisation, new plans have also been developed for addressing the coverage needs of individuals. Health insurance companies and the Insurance Regulatory and Development Authority of India (IRDAI) have designed and launched specific COVID oriented health insurance plans to meet the demand for health insurance for COVID coverage. Let’s understand what these plans are

Types of COVID-19 health insurance policies in 2020

• Indemnity oriented health insurance plans

  The indemnity health insurance plans which are offered by health insurance providers cover hospitalisation expenses. As such, if you are hospitalised due to Coronavirus, the expenses incurred on such hospitalisation and associated treatments would be covered under the existing health plan that you have.

• Fixed benefit health insurance plans

  Seeing the rise in COVID cases, many health insurance companies launched a COVID specific, fixed benefit health insurance policy. These policies were launched under the Sandbox initiative of IRDAI on a trial basis. The policies promised the payment of the sum insured in lump sum if the insured tested positive for Coronavirus infection

• Short term, COVID specific health insurance policies

  While the existing health insurance plans cover the cost of hospitalisation due to COVID, the cost of PPE kits and consumables are excluded. In case of COVID hospitalisation, such excluded costs constitute a primary portion of your medical bills and result in considerable out of pocket expenses. Moreover, the fixed benefit COVID specific plans were issued on a trial basis by few insurance companies making these plans not easily available. As such, IRDAI asked insurers to come up with a short-term COVID 19 health insurance plan which would cover only the medical costs incurred in case of Coronavirus. An English proverb says necessity is the mother of invention and the IRDAI’s directive resulted in the birth of two new COVID insurance plans – Corona Kavach Insurance and Corona Rakshak Insurance. Both these plans are short-term health insurance plans which provide coverage only when the insured tests positive for Coronavirus.

Corona Kavach Insurance Policy

The Corona Kavach insurance policy is an indemnity oriented health insurance plan which covers the costs incurred if you are hospitalised due to Coronavirus. The features of the policy are as follows –

• Individuals aged between 18 years and 65 years can buy the policy on an individual or family floater basis. For dependent children, the entry age is 1 day to 25 years. If, however, the child is aged over 18 years and is financially independent, the child would not be allowed coverage under the family floater plan.

• Under the family floater variant, self, spouse, dependent children, dependent parents and parents-in-law can be covered
• The sum insured start from INR 50,000 and goes up to INR 5 lakhs in multiples of INR 50,000
• There are three policy tenures to choose from – 3.5 months (105 days), 6.5 months (195 days)and 9.5 months (285 days)
• Coverage is available after a waiting period of 15 days. Coverage is offered only for hospitalisation due to COVID.
• The plan does not offer the benefits of lifelong renewals or portability
• Pre-existing illnesses as well as co-morbidities are covered under the policy
• A single premium is payable to buy the plan
• There is no limit on room rent coverage offered by the policy
• A 5% premium discount is offered to healthcare workers if they buy the policy

Coverage under the COVID Kavach health insurance plan is offered for the following –

• Room rent
• Boarding and nursing expenses
• ICU and ICCU room rent
• Fees payable to surgeons, doctors, consultants, anaesthetists and medical practitioners
• Cost of anaesthesia, oxygen, blood, ventilator, surgical appliances, medicines, diagnostics, PPE kits, masks, gloves and other consumables
• Cost of ambulance up to INR 2000
• Treatment taken at home, which would have otherwise required hospitalisation, for up to 14 days after being diagnosed COVID positive. In such cases, the cost of diagnostics, medicines, consultations, oximeter, nursing expenses, etc. would be covered. Home treatments would be covered only after obtaining an approval from the insurance company 
• AYUSH treatments for COVID
• Pre-hospitalisation expenses for 15 days
• Post hospitalisation expenses for 30 days

Moreover, there is an add-on hospital cash benefit allowance which can be chosen at an additional premium. This benefit pays 0.5% of the sum insured for each day of hospitalisation for up to 15 days.

Corona Rakshak Health Insurance

Another standard COVID 19 health insurance plan is the Corona Rakshak health insurance plan. Contrary to Corona Kavach insurance, this plan is a fixed benefit health insurance plan. This means that the plan pays a lump sum benefit if you test positive for Coronavirus. The features of the plan are as follows –

• The plan is available on an individual sum insured basis only
• Adults in the age group of 18 years to 65 years can be covered under the plan. 
• The policy comes in three durations – 3.5 months (105 days), 6.5 months (195 days)and 9.5 months (285 days)
• Sum insured is available from INR 50,000 to INR 2.5 lakhs in multiples of INR 50,000
• You can avail a premium discount if two or more family members are covered under the same plan on an individual sum insured basis
• No pre-entrance health check-ups are required to buy the policy

Coverage under Corona Rakshak health insurance plan

Corona Rakshak policy covers COVID infection. It pays the sum insured in lump sum if you test positive for Coronavirus and you are hospitalised for at least 72 hours.

Corona Kavach insurance premium

Being a short term COVID health insurance plan, Corona Kavach insurance premium is low and affordable. Though the coverage features are standard across all insurance companies, the premium varies. Here are the sample Corona Kavach insurance premium rates charged by different insurance companies for different tenures. The age is taken to be 35 years and the sum insured is INR 5 lakhs –

Premium rates for Corona Kavach

Being a short term COVID health insurance plan, the premium of Corona Kavach is low and affordable. Though the coverage features are standard across all insurance companies, the premium varies. Here are the sample premium rates charged by different insurance companies for different tenures. The age is taken to be 35 years and the sum insured is INR 5 lakhs –

Premium rates for Corona Rakshak

Similar to Corona Kavach, Corona Rakshak also has a standard coverage across all insurers but the premium rates vary. The premiums of different insurance companies are given below considering a sum insured of INR 2.5 lakhs and an age of 35 years –

Difference between the plans

Though both Corona Kavach insurance and Corona Rakshak plan are standard health plans offered solely for covering the medical costs incurred due to Coronavirus infection, both these plans are different. Here is a table showing the comparative difference between the two –

Exclusions under Corona Kavach health insurance plan

Though Corona Kavach policy for COVID – 19 covers all possible medical costs of Coronavirus infection, it has exclusions too. These exclusions include the following –

• Cost of diagnostic investigation and evaluation for any medical condition not related to COVID
• Cost incurred in bedrest or recovery where no treatments are undertaken
• Cost of dietary supplements (vitamins, proteins, minerals, etc.)which are bought without any prescription 
• Expenses incurred on unproven or experimental treatments
• Cost of treating Coronavirus when the infection was diagnosed before the policy started
• Costs incurred on day care treatments
• OPD expenses
• COVID related costs incurred during the waiting period of 15 days
• Medical treatments or diagnosis of COVID outside India
• Cost of COVID testing at a centre which is not authorized by the Government
• If the insured individual travels to any country where the Indian Government has put up travel restrictions, the coverage under the policy would stop

Exclusions under Corona Rakshak health insurance plan

Corona Rakshak policy does not provide coverage in the following instances –

• Costs of diagnostics and evaluation
• Claims which occur within the first 15 days from buying the policy
• Illnesses or diseases which are not related to Coronavirus 
• COVID testing which is done at a centre that is not authorized by the Government
• Claim for COVID wherein the insured tested positive for the virus before the policy start date
• If the insured travels to a country where travel restrictions have been imposed by the Indian Government, the coverage under the policy would stop

Benefits of Corona Kavach insurance

Here are some benefits which you can get if you buy COVID Kavach insurance plan –

• Coverage for the cost of consumables incurred on treating COVID
• No out-of-pocket expenses in case of COVID treatments since the plan has no deductibles
• Comprehensive coverage since the plan covers co-morbidities as well as pre-existing illnesses
• Tax benefit on the premium paid under Section 80D of the Income Tax Act, 1961
• Affordable premiums which allow you to avail coverage for your whole family under a single plan
• Ease of buying the policy since no pre-entrance health check-ups are needed to buy the plan

Benefits of Corona Rakshak insurance

Corona Rakshak health insurance policy is beneficial because –

• It provides a lump sum financial benefit which you can use for meeting your treatment costs or for any other financial obligations that you have
• The premiums are affordable making it easy for you to buy the policy
• You can buy and avail coverage instantly since no pre-entrance health check-ups are needed
• The premiums are affordable and they also earn you tax benefits under Section 80D of the Income Tax Act, 1961
• The waiting period is very low allowing you coverage at the earliest. Moreover, the plan covers pre-existing illnesses and co-morbidities ensuring claim settlements in case of Coronavirus

Which one should you buy?

Both these policies are suitable for your short term coverage needs against COVID infection. Even if you already have an existing indemnity health plan, remember that the plan would not cover the cost of consumables in case of COVID hospitalisation. Since the cost of consumables would be high, you can buy Corona Kavach insurance which covers all possible costs incurred if you are hospitalised due to COVID. In fact, the COVID Kavach insurance plan also covers home treatment expenses thereby allowing you coverage for home quarantine too. While your normal health plan might not provide coverage for home treatments, the Corona Kavach insurance policy would and it would cover all possible costs incurred in treating you. The premiums are also quite low making the plan all the more feasible.

When it comes to Corona Rakshak health insurance plan, it gives you a lump sum benefit on hospitalisation for 72 hours or more. This benefit would help you meet the non-medical financial costs which you might suffer if you are tested positive for COVID. The plan, therefore, acts as a supplemental coverage which you can opt for if you have an existing indemnity policy. 

Here is a comparative analysis of all available health insurance options for covering COVID costs –

Both these policies are the need of the hour when COVID cases have become as common as the common flu. With more and more households falling victim to this dreaded illness, it is better to have complete coverage for the possible medical expenses that you would incur if you suffer from the infection. Corona Kavach and Corona Rakshak are short-term plans which cost low but provide complete financial protection against the medical expenses of COVID. So, invest in these plans and secure your finances against this pandemic.

Medical expenses have become unaffordable for the common man and given the rising trend of medical inflation, the costs are expected to increase in the coming time. Given the unaffordability of medical expenses, a health insurance policy becomes the most important part of your financial portfolio. The policy covers the medical expenses which are incurred if you or your family member is hospitalised giving you financial relief. These health insurance policies are offered as annual contracts which you need to renew every year for continued coverage. Moreover, with lifelong renewability available under all health insurance plans, if you renew the policies on time, you can enjoy coverage for as long as you live.

While health insurance plans come as an annual contract, there are long term health insurance policies too which provide you continued coverage for a specified duration. Do you know what these long term insurance plans are all about?

What is a long term health insurance policy?

A long term health insurance policy is nothing but a health insurance policy which is offered for two or three consecutive years at once. You are required to pay the aggregate premium for the duration of the coverage at once when you buy the plan and then the long term policy provides continuous coverage for the said duration without the need of annual renewals.

Features of long term insurance plans

 Long term health plans have the following salient features –

• The policy is issued for a period of two or three years as per your choice
• The premium is usually payable at once when buying the policy. However, many companies are also allowing the facility of instalment premiums wherein you can avail long term insurance plans by paying premiums in instalments.
• There is a premium discount when you choose a long term duration
• The no-claim bonus is added on an annual basis even when you have a long term insurance plan

Long term v/s short term health insurance plans – the pros and cons

Long term insurance plans have both merits and demerits compared to short term health insurance plans. Let’s have a look at what they are –

Pros 

1. No hassles of annual renewals

   Short term health insurance plans require you to renew them after the end of every year for continuous coverage. This might lead to a possible lapse of the coverage if you forget to renew within the due date. In long term insurance plans, however, there is no hassle of annual renewal. Once you buy the policy, you are secured of the coverage for a continuous tenure of two or three years. 

2. Less probability of lapse

   Renewing yearly has a high risk of lapse because of the high frequency of renewing year on year. Compared to this, under long term health insurance plans, since the frequency of renewals is reduced, the probability of lapse is also reduced.

3. Premium discounts

   There is a marked benefit in opting for long term insurance plans as you get a premium discount in choosing a multi-year policy. This discount ranges from 5% to 10% and lowers the effective premium payable for annual health insurance coverage. This discount is not available under short term health insurance plans making their premiums dearer.

Cons

1. Loss in tax benefit

   When you buy a long term insurance policy and pay the premium at once, you are able to claim a deduction from your taxable income in the year in which you pay the premium. In the next year, since no premium is paid, the tax deduction is lost. So, while in the first year, you can save a higher tax, in the subsequent years, when the policy is running, you lose the tax saving benefit of buying a health insurance policy. Short term plans require annual premiums and therefore, provide annual tax savings on the premiums paid.

2. Inability to port the policy

   After buying a long term policy, if you are dissatisfied with the plan or the insurance company, you would not be able to port the policy to another insurer for the coverage duration that you have already opted for. This limits portability and you are stuck with the insurance policy for the long term duration that you have selected. Since short term health insurance plans are annual plans, you can port to another policy on renewal if you are not satisfied with the plan that you have bought or the insurance company. 

3. A higher pocket pinch

   Since you are required to pay the premium of a long term insurance plan upfront when buying the policy, you suffer a higher pocket pinch. Even though the effective annual premium comes out to be lower than the premium payable for a short term plan, the aggregate premium payable might prove to be unaffordable for some.

Benefits of buying long term insurance plans

While the above-mentioned pros and cons highlight the benefits and drawbacks of long term policies, here is a quick guide to the benefits of such health insurance plans –

1. You are freed from the hassle of renewing the policy every year
2. You are assured of a long term coverage without the possibility of lapse during the coverage tenure
3. You can claim a higher tax deduction in the year you buy the long term insurance plan since you pay a higher premium upfront to buy the policy
4. You can enjoy premium discounts of up to 10% when buying a long term health insurance policy

So, to avoid remembering to renew the policy every year, you can buy long term insurance plans. It would cut down your efforts of maintaining your health insurance coverage and would ensure that you afford the medical expenses suffered in a medical contingency.

How to choose the right long term insurance plan?

There are a variety of long term health insurance plans available in the market. As such, when buying a policy for yourself, you should be careful in the product that you choose. The following factors should be kept in mind when choosing the right long term insurance plan –

• Choose an all-inclusive scope of coverage

  Different health insurance plans allow different coverage benefits and so you should choose a plan which has the most coverage benefits to cover all medical expenses. A plan with an inclusive scope of coverage would cover maximum medical expenses thereby reducing your out-of-pocket costs.

• Avoid sub-limits

  Under some long term health insurance plans, there might be sub-limits on room rent. These sub-limits limit the coverage available and if you get admitted in a room with a higher rent, your entire claim amount would be reduced. Thus, opt for plans which have no sub-limits so that you can enjoy maximum coverage from your policy.

• Check the premiums vis-à-vis coverage 

  It is foolish to compare apples to oranges. Therefore, when comparing health insurance plans, you should always compare the premiums vis-à-vis the coverage offered by the plan. Compare premiums of those plans which offer similar coverage benefits and then choose the policy which allows the lowest premium without compromising on the coverage.

• Check the network hospital list

  If you want to avail the benefit of cashless treatments, you should be admitted to a hospital which is tied-up with the insurance company. In case of non-networked hospitals, claims are settled through reimbursement which causes an unnecessary financial strain on you. So, before buying a plan, check its list of networked hospitals. If the plan has tie-ups with the hospitals in your vicinity, choose them for availing easy claim settlements.

• Maximize the discounts

  Long term insurance plans allow attractive premium discounts for choosing long term coverage period, for adding family members, for being healthy, etc. Look for these discounts offered by the different plans and choose a plan which offers the maximum possible discount. The higher the discount that you get the lower would be the premium charged.

  To ensure all these factors are considered, you should always compare and choose the most suitable long term insurance policy for your needs. Also ensure that all your family members are covered under the plan and opt for a sum insured which is sufficient enough to cover the expected medical costs.

Top long term health insurance plans in India

Here is a list of some of the best long term insurance plans available in the market –

How to buy long term insurance plans?

You can buy long term health insurance plans online after comparing the available plans and then choosing the one which is the most suitable. Online policies can be bought at your convenience either from the company’s website or from the website of an insurance aggregator. Turtlemint is also a platform which allows you to buy a long term insurance policy online after comparison. Turtlemint is tied-up with leading health insurance companies giving you the option of some of the best long term health insurance plans available in the market. You can, then, compare the available plans on their coverage benefits and premium rates and then choose a suitable policy. After selecting the policy, you can also buy it online directly from Turtlemint by paying the premium digitally. Once bought, the policy would be issued and you would get the copy of the policy in your email. Turtlemint also helps you with your health insurance claims. In case of a claim you can simply contact Turtlemint and its claim team would help you get your claim settled at the earliest. 

Frequently Asked Questions

1. Can I switch insurers in a long term insurance plan?

   Switching insurers is called portability and this portability is allowed at the time of renewal when the duration of the policy comes to an end. Thus, in a long term insurance policy, you cannot switch insurance companies during the coverage duration. You would have to wait for the duration to complete after which such switching would be allowed.

2. Will my no claim bonus be affected in a long term health insurance policy?

   No, there would be no affect in your no claim bonus in a long term insurance policy. The no claim bonus would be allowed after every claim-free year irrespective of whether you have bought a long term health insurance policy or a short term one.

3. Can senior citizens buy a long term policy?

   Yes, many senior citizen health insurance plans allow long term coverage for senior citizens. You can, therefore, choose such plans to avail long term coverage.

4. Can I add riders under a long term insurance policy?

   Yes, you can add riders to a long term insurance policy. These riders can be added either at the time of buying a policy or at the time of renewing the policy.

5. Can a new member be added to the coverage in a long term insurance policy?

   Yes, a new family member can be added to the coverage mid-term in a long term insurance plan. This addition can be done by paying a proportionate additional premium to the insurance company along with a written request to add the member to the coverage.

6. What happens to the pre-existing waiting period in long term health insurance policies?

   The pre-existing waiting period does not get affected in a long term health insurance plan. The waiting period gets reduced after the completion of each policy year whether you opt for a long term health plan or an annual policy.

The Coronavirus pandemic is spreading despite the various efforts taken by the Government and the health department. More and more individuals are getting infected even as the lockdown curbs are easing in many parts of the country. If you read the newspapers or watch the news, you would know that the numbers have crossed 3.5 million and they are rising everyday!!

The infection is resulting in hospitalisation and, in certain cases, even death. In case of hospitalisation in a Government hospital, the charges are minimal or even nil. But if you seek hospitalisation in a private hospital, be prepared to face huge costs. Private hospitalisation is expensive and the costs are considerably high making it difficult for an average man to bear. This is where you can call on your health insurance plans. The plans cover the hospitalisation expenses incurred due to COVID infection thereby helping you financially. Moreover, in case of death of an individual, life insurance plans provide the much needed financial assistance to the deceased’s family. 

Because insurance can play an important role in tackling the financial implication of this pandemic, the Insurance Regulatory and Development Authority of India (IRDAI) has issued various guidelines for health insurance companies. These guidelines have been issued in the interests of policyholders so that their health insurance plans can come to their rescue in case of COVID related claims. Here’s what the guidelines say –

For health insurance claims which cover hospitalisation expenses –

• If the health insurance policy covers hospitalisation, insurance companies should settle COVID-related claims of hospitalisation quickly
• The medical costs incurred by policyholders during hospitalisation due to the virus and also during the quarantine period should be settled as per the terms and conditions of the policy. Moreover, the settlement should be in compliance with the regulatory framework. In case of home quarantine however, claims would not be admissible.
• If a claim is being rejected or repudiated, the claim should be thoroughly reviewed by the claim review committee of the insurance company before such rejection or repudiation

Health insurance companies are also encouraged to offer COVID specific health insurance policies which would cover the treatment costs of the virus effectively.

The guidelines were issued by the IRDAI on 4th March 2020 under the provisions of Section 14(2)(e) of the IRDA Act, 1999 and they came into force immediately.

Though there were no specific guidelines for life insurance companies, they were urged by IRDAI to handle their death claims in an expeditious manner so that the family of the policyholders can get claim settlements as quickly as possible. 

These guidelines are proving beneficial for policyholders who are facing the threat of COVID infection. They are being able to make claims in their policies easily. You should also know these guidelines so that you know what to expect from your health insurance plans and how to handle your claims in case of an emergency.

Health insurance claim settlements can prove to be a challenge if the health insurance company contests the claims and rejects or repudiates it. After all, with the policy promising assistance in a medical contingency, claim rejection can be a nightmare!! In such cases, policyholders face huge medical costs and might suffer a financial strain. To safeguard your and other policyholders’ interests, the Insurance Regulatory and Development Authority of India (IRDAI) has, therefore, issued fresh guidelines with regards to health insurance claim settlements. These guidelines are aimed to standardize health insurance terms and conditions and to simplify them for the common man. Let’s find out what IRDAI guidelines state –

IRDAI guidelines on health insurance claim settlements 

According to the latest guidelines issued by the IRDAI, health insurance companies will not be allowed to challenge claims in a policy where premiums for eight continuous years have been paid. Thus, in simpler terms, if you have a health insurance policy which has been continuing non-stop for the last 8 years or above and you have paid regular premiums under the policy, your claims would be settled easily. The insurance company would not be able to challenge claims on such policies given the tenure for which the policy has been in existence. 

The other points highlighted in the guidelines are as follows –

• Any health insurance policy which does not comply with this new guideline would be modified from 1st April 2021 as and when they are up for renewal. This means that on renewals after 1st April 2021, all health insurance policies would have to comply with the new guidelines.
• The eight years specified in the guideline would be called the moratorium period. During this moratorium period, health insurance companies can judge whether the claims that you make are genuine or not. However, when this trial period is over, health claims cannot be challenged and the contestability clause would be revoked.
• The moratorium period would apply to the sum insured originally chosen by the policyholder. If, however, the sum insured is increased, an additional moratorium period would be applicable to the enhanced amount. For instance, if you buy a health plan of INR 5 lakhs on 1st June 2020, the moratorium period would end on 1st June 2028. However, if the sum insured is enhanced to INR 8 lakhs on 1st June 2022, a moratorium on INR 5 lakhs would end on 1st June 2028 but a moratorium on INR 3 lakhs would end on 1st June 2030.
• Claims would be allowed to be contested only in cases of frauds which the company would have to prove and in the case when a medical cost is specifically excluded from coverage in the policy contract. In the case of frauds, misrepresentation or non-disclosure of material facts, the policy would be considered null and void and the premiums paid by the policyholder would be forfeited by the insurance company
• Any sub-limits or co-payments applicable under the health insurance policy would continue to apply
• The new guideline would apply only to indemnity oriented health insurance plans which cover the actual cost of hospitalisation
• Health insurance companies would have to settle or reject their claims within 30 days of receiving all claim-related documents. If there is any delay in claim settlement, the insurance company would be liable to pay interest on such delay. The interest payable would be calculated @ bank rate + 2%.
• Even in the case of portability, the moratorium period would be applicable on the ported policies from the date the policy was first bought. For instance, if you buy a policy on 1st June 2020, the moratorium period would end on 1st June 2028 irrespective of the number of times you port the policy to another insurance company.

Impact of the guidelines

IRDAI has issued these guidelines to simplify the claim process of health insurance plans and to protect policyholders from the fear of claim rejections in their existing health insurance plans. With these guidelines, the claim related terms and conditions of health insurance policies would be simplified for the common man and you can expect quick and easy settlement of your health insurance claims.

So, in a nutshell, this move by the insurance regulator would ease your claim settlement process. You would not have to lose your sleep on health insurance claims once eight years have passed. Your claims would be settled easily and quickly.

The IRDAI is the insurance regulator which makes necessary changes and regulations in the interest of policyholders. This guideline is also aimed in the best interest of policyholders and would definitely give you an advantage in your health insurance claims.