IRDAI Remove Age Limit to Purchase Health Insurance

Health Insurance for All Ages

The Insurance Regulatory and Development Authority of India (IRDAI) has mandated insurance companies to provide health insurance policies to all individuals, including senior citizens, regardless of age or pre-existing medical conditions. This directive ensures that even elderly citizens, ranging from 65 to 90 years old, can avail themselves of health coverage, bringing relief to many across the country. The move aligns with the BJP’s election promise to include individuals over 70 years old in the Ayushman Bharat health insurance scheme.

New Health Insurance Provision

The IRDAI has instructed insurers to create insurance products tailored for specific groups like senior citizens, students, children, and maternity. They must strive to provide coverage for individuals with pre-existing medical conditions. This directive aims to ensure inclusivity and accessibility to health insurance for all segments of society.

Significance of the New Rule

• India’s demographic landscape is shifting, with the elderly population projected to comprise 20% by 2050.
• With the IRDAI’s directive, insurance companies can develop or improve products to provide inclusive coverage for entire families, including parents.
• This move contrasts with the previous practice of limited offerings for senior citizens, fostering comprehensive protection for all age groups.
• This initiative will positively impact both senior citizens and working adults responsible for elderly parents.
• It enhances healthcare access and encourages more Indians to safeguard loved ones against medical conditions.

In the fiscal year ending March 2024, insurance companies collected Rs 1.09 lakh crore in premiums, with government schemes contributing Rs 10,577 crore, retail customers Rs 42,200 crore, and group policies Rs 55,020 crore, as per General Insurance Council data.

Age limit for health coverage until now

IRDAI regulations previously capped health insurance eligibility at age 65, imposing stricter conditions thereafter, such as mandatory pre-insurance health check-ups and exclusion of coverage for pre-existing conditions. This is due to the heightened susceptibility to illnesses in older age, despite an individual’s overall health.

Furthermore, premiums escalated with advancing age, leading customers above 50 to contend with restricted coverage and the elimination of specific insurance riders. Consequently, a significant portion of senior citizens lacked adequate coverage, leaving them vulnerable to substantial hospital expenses. This presents a notable opportunity for innovation and expansion into the underserved market segment.

What should senior citizens look for when buying health insurance?

For those without medical conditions, opting for the most comprehensive coverage with 100% bill payments and minimal waiting periods is advisable.

Customers with pre-existing health issues should compare offerings from different insurers, considering factors like network coverage, room rent limit, disease sub-limits, consumable cover, and other policy terms that might affect claim payouts.

Ultimately, the amendment aims to benefit senior citizens and move India closer to the goal of achieving universal healthcare for all by 2030.

Concerns Related to the New Rule for Health Insurance

• Insurance companies might not show much interest in serving the 65-plus age group.
• Even if they do, the terms and conditions of such policies may not be favorable for customers.
• A 70-year-old seeking health insurance for the first time might face strict terms, exclusions, and potentially high premiums.
• Insurers will closely assess the profitability, sustainability, and scalability of policies for this age group, considering the likelihood of pre-existing conditions.
• Retirees seeking health insurance may find it beneficial to maintain employer-provided coverage, as insurers often offer more competitive rates and favorable policy terms through such plans.

In essence, IRDAI’s initiative aims to widen insurance access for older demographics, emphasizing the need for insurers to prioritize customer needs for inclusive coverage across all age groups.

Enhanced Access for High-Risk Health Conditions

The IRDAI‘s new regulations aim to enhance healthcare accessibility in India, particularly for individuals facing severe medical conditions like cancer, heart, renal failure, and AIDS. Under these rules, insurers cannot deny policies based on these ailments, and the waiting period for pre-existing conditions has been reduced to 36 months. After this period, insurers must cover all disclosed pre-existing conditions as per policy terms, and denying claims for such conditions is prohibited. Additionally, insurers can only offer benefit-based health policies, ensuring fixed payouts for covered illnesses, promoting inclusivity, and ensuring a secure future for all citizens.

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