IRDAI has ordered that general and health insurance companies cannot increase the premium of senior citizens by more than 10% every year. Permission has to be taken from IRDAI to increase more than 10% or to close the plan.
The Insurance Regulator Insurance Regulatory and Development Authority of India (IRDAI) has given this order to all general and health insurance companies with immediate effect. Under this order, companies will not be able to increase the premium of health insurance of senior citizens by more than 10% every year. At the same time, if it has to be increased by more than 10% or a plan has to be closed, then IRDAI will have to be asked first. The purpose of this order is that senior citizens do not face much difficulty in getting health insurance and companies cannot increase the premium arbitrarily.
The regulator of the insurance sector has taken this step because it has come to its notice that the insurance premium rates of senior citizens (60 years and above) have been increased significantly in some health insurance products. The insurance premium is mainly based on the cost of potential claims and the cost incurred by the insurance company in selling and managing the policy. The cost of claims largely depends on the fees charged by hospitals for treatment/surgery.
Insurance companies will not be able to increase more than 10%
According to the instructions of IRDAI, companies will not be able to increase the premium of senior citizen’s health insurance by more than 10% every year. Suppose if the annual premium of a senior citizen’s health insurance policy is Rs 5000 now, then next year the company cannot increase it to more than Rs 5500. If companies want to increase the premium of senior citizen’s health insurance by more than 10%, then they will have to tell IRDAI why they want to do so. They will be able to increase the premium only after getting approval from IRDAI.
A separate system will have to be made
IRDA has asked all insurance companies to make a separate system to listen to and resolve the health insurance claims and complaints of senior citizens. Information about this system should be easily available on the company’s website. IRDAI said, “For the benefit of senior citizens, as per the rules, all insurance companies are required to create a separate channel for claims and complaints related to their health insurance. This information should be given on the website of the insurance company.”
Steps taken in the interest of insurance holders
IRDAI has recently made many reforms, which give more rights to the insurance holders and make health insurance easy and accessible to all. Along with this, the way is also open for insurance companies to bring new and better products.
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