Recently, the Insurance Regulatory and Development Authority of India (IRDA) decreed that Health Insurance companies can no longer sell indemnity-based products. Indemnity policies reimburse your expenses incurred during hospitalisation or domiciliary care, up to the mentioned limit, on submission of necessary proofs.
IRDA has asked insurers to offer their customers a three-month notice and then maintain their contractual agreements until the end of the policy term.
As a policy holder, it may be bewildering to find yourself in such a situation. The first question you may ask is, can your policy be withdrawn? The answer is yes. Health Insurance companies hold the right to withdraw any existing plan, provided they have the IRDA’s approval. IRDA guidelines, however, make it mandatory for the insurer to offer the policyholder an alternative at the time of withdrawal of the original health plan.
As a policy holder, what are your options in such a situation? Let’s take a look.
1: Migrate to the alternate plan
If your health insurer withdraws your current health plan, you can consider migrating to the alternate plan being offered to you. The alternative is most likely to have additional features, offering a broader coverage than your current plan. Any benefits that you may have accumulated with your current plan also get migrated, should you choose to move to the alternate plan on offer. Do carefully check the alternate policy’s terms and conditions, sum insured, coverage of pre-existing diseases, and the premium amount, to avoid any surprises while filing a claim.
2: Discontinue and opt for a new policy
If you feel you would be better served by discontinuing the existing policy and opting for a new one, you should do that. You have the option of staying on with the current insurer or moving on to a new one. However, moving to a new insurer would mean losing on any accumulated benefits on your existing plan and restarting the waiting period for pre-existing diseases. Assume that your current policy had a three-year waiting period for pre-existing diseases, which you have completed. Moving to a new policy would reset the waiting period. This will be to your detriment.
3: Consider insurance portability
You could port your insurance policy to a different insurance company. The advantage of such a move is that you will retain the waiting period benefits with the new insurer, provided the benefits are the same. On the downside, transferring accumulated benefits and bonus are limited when you port your Health Insurance policy. There will be a fresh scrutiny for pre-existing diseases when you opt for Health Insurance portability.
It’s not a calamity to have your insurance plan withdrawn. So calmly assess your options and move forward with the best one available. But do ensure that you do not go without Health Insurance at any point.
Additional Reading: 7 helpful tips to choose the best Health Insurance Plan