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Insurance Article

Highlights of The New Health Insurance Rules

August 22 2016
Highlights of The New Health Insurance Rules

New rules and regulations are necessary for the growth of the dynamic insurance industry. The Insurance Regulatory Authority of India has introduced health insurance Regulations, 2016 to replace the earlier ones. Some of the important changes are:

Innovative Insurance Products

Insurers are allowed to launch close-ended ‘pilot products’, with a one-year policy term. These products will be offered by general and health insurers for an initial period of five years. These policies will cover new risks and may be withdrawn or turned into a regular policy.

Phasing Out of Indemnity-based Products for Life Insurance

Life insurers are no longer allowed to offer indemnity-based products. The existing policy holders can continue these policies until the expiry of the policy term.

New Combi Plans

Earlier, combi plans used to be a mixture of health plan and a pure term plan only. However, according to the new rules, any kind of life plan i.e. endowment, money-back or ULIP, can be clubbed with a health plan.

Cumulative Bonus

Defined benefit policies like critical illness plans didn’t offer the clause of cumulative bonus. The change brought about by the new rules allows this clause in such policies.

Wellness Benefit

To stress the benefit of healthy living, policyholders will be rewarded on the basis of wellness habits by stating the incentives upfront on the policy documents and prospectus.

Flexibility for Standard Declaration Format

All insurers, including life, general and health can now design proposal forms independently, with standard declarations given in a separate set.

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