 Broadly insurance can be classified in two categories: First - Life Insurance which matures in event of death of the insured/policyholder. On occurrence of such an event the insurance company pays a sum of money assured to the nominee/beneficiary (person nominated by the policyholder). Life Insurances are of two types: Traditional Plans - which contain Endowment Plan , Cash Back Plan, Term Plan , (Term Life Insurance) and Whole life policy. And Unit-linked Insurance Plans - are of 4 types - Endowment cum Ulips, Children Plan , Retirement Plan or Pension plan and investment/saving plans. Second - General insurance. All insurance policies other than life insurance policies come under general insurance segmentation. (Also known as non-life insurance policies). These policies include Home Insurance, Auto Insurance, Travel Insurance, Marine Insurance, Theft Insurance, Office insurance and Health insurance Health insurance is most acquired policy in general insurance segment. Health insurances are of 3 types - Comprehensive Plan - which include Mediclaim and Fixed benefits plan, Accidental Insurance and Critical Care plan . |
In a move that will bring cheer to health insurance policyholders, non-life insurers are finalising the contours of a new product that will have a common minimum standard cover and will be renewable and portable across companies.
The move being pushed by the General Insurance Council, the self-regulatory body, will mean that insurers cannot refuse renewal of policies on grounds of adverse claims.
Similarly, all benefits will continue to be available to an insured person even if he or she switches to a new company.
While pre-existing diseases are only covered after four years of a policy, an insured will be eligible to these benefits from the first year of switching to a new company. In addition, cumulative bonus and discounts will also be available after the change.
General Insurance Council Secretary General K N Bhandari said those buying a health cover at an early age will not be denied renewal on grounds of adverse claims. So, if someone buys the new cover at, say, 30, he will still get a cover at 50 years even if the he has developed heart problems and has filed for claims.
Insurers will approach the Insurance Regulatory and Development Authority for approval of the new product that will come with all these features later this month. Premium is, however, yet to be finalised, but will be affordable, Bhandari said.
"Insurance companies will not refuse renewing the health insurance policy except on specified grounds such as moral hazards. In case the insured has cheated the insurer or not disclosed the full facts regarding his health or in those cases where there is no correct exposure, we will refuse renewing the cover," he added.
Health insurance policies contain the renewability clause that specifies the type of the contract and terms for renewal, which are of three types. The first type is optionally renewable, where the insurer has the option to renew the policy on its terms. This is the cheapest policy for the insured.
The second type is guaranteed renewability, the premium rating for which depends on the claims experience. The third type, which is the most expensive variant, cannot be cancelled and renewal is guaranteed, but the price can vary.
