IRDAI: Exclusions in medical insurance now standardised, each insurer with own rules can’t trouble customers

The regulator has advised all the health insurers to update and include the suggested changes in existing products by 1st Oct, 2020; watch out the impact on premium rates

Kumar Shankar Roy Oct 1, 2019

Health insuranceBringing standardisation to health insurance, insurance regulator IRDAI has levelled the playing field for both customers and insurers. By bringing out new guidelines, there is no longer a grey area in terms of what would be excluded from a medical insurance policy and what won’t. This saves a lot of confusion for customers who would later find out about exclusions and become bitter about buying health insurance. Read on to know more.

Standardisation in health insurance

A health insurance exclusion refers to anything the insurance company will not cover, ranging from a type of medicine to a type of surgery. These exclusions varied from plan to plan, because till now there was no standardisation in the exclusions in a health insurance policy.

IRDAI has told insurance companies that they cannot exclude illness associated with hazardous work activity, artificial life maintenance, treatment of mental illness, age-related degeneration and internal congenital diseases.

Amit Chhabra, head-health insurance, says: “As per the new guidelines the exclusions will now be standardised along with the policy wordings. This was a grey area earlier and there was a lack of clarity as such on the exclusions which could potentially lead to confusing customers and problems at the time of claims. As per the new guidelines, there will be a defined list of exclusions and only the listed ailments can be excluded from the policy.”

Also, there was no clear guideline around exclusions like age-related ailments (knee-cap replacements, cataract surgery, Alzheimer’s and Parkinsons, etc.). Now exclusions like these will have to be covered under a health insurance policy. Other permanent exclusions like any ailment occurring due to working in a hazardous place like factory workers, pilots, etc. will be covered as well.

Permanent exclusions

There is also clarity around permanent exclusions. Insurers are free to put permanent exclusions on specified conditions with customer consent. There was a lack of clarity on this earlier. This will allow Insurance companies to offer health insurance to more and more customers, says Chhabra.

However, this does not mean that health insurers can get away by not insuring some diseases which could happen due to bad luck, etc. So, insurance companies will now have to cover people suffering from ailments like HIV AIDS, etc. even if they incur any other disease providing it is disclosed by the policyholder.

Also, the treatments requiring the use of some listed modern technology methods will also be covered.

The regulator has advised all the health insurance companies to update and include the suggested changes in existing products by October 1, 2020.

Pre-existing diseases

Pre-existing disease means any condition, ailment, injury or disease that is/are diagnosed by a physician within 48 months (4 years) prior to the effective date of the policy issued by the insurer or for which medical advice or treatment was recommended by, or received from, a physician within 48 months prior to the effective date of the policy or its reinstatement.

Earlier there was no clarity on PED. “Now, after the issuance of the policy, if the policyholder is diagnosed with any disease within three months of the issuance then the same will be considered as a PED if disclosed by the policyholder,” says the Policybazaar expert.

Also, if any policyholder is already suffering from any disease 48 months prior to the issuance of the policy, then the same will also be considered as a PED and will be covered by the insurance company. The maximum waiting period on such PEDs is 48 months.

Standardization of health regulations will also help when a customer changes their insurer. Earlier after switching the insurer, some companies used to set waiting periods, which seemed unreasonable to many, for PED. This meant if a person did not have a PED for a certain time under the old policy, that time was lost in the new policy. “If a person transfers from one insurer to the other and has already completed in part some of the waiting period requirement — then the new insurer may impose only the unexpired/residual waiting period not exceeding 48 months from the date of the first issuance of porting out the policy,” IRDAI says.

Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. Kumar is a financial journalist, with a functional experience of 15 years. He tracks mutual funds, insurance, pension, PMS, fixed income/debt and alternative investments markets closely. He has worked for The Times of India, The Hindu Business Line, Deccan Chronicle Group, DNA, and Value Research, among others, across different cities in India. He is deeply interested in marrying data insights with actionable opinion. He can be contacted at

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