Not too long ago, some media studies have claimed that the age restrict on medical insurance purchases has been eliminated. Is that this true? If sure, will this profit a big section of the inhabitants?
The IRDAI round dated twentieth March 2024, F. No. IRDAI/Reg/8/202/2024 (due to Kamlesh Rao for sharing it on the Fb group Asan Concepts for Wealth) says on web page 37,
“6. Product design:
6.1 Insurers shall be sure that they provide medical insurance merchandise to cater to all age teams.
6.2 Insurers could design merchandise particularly for senior residents, college students, kids, maternity and some other group as specified by the Competent Authority.
6.3 Insurers shall endeavour to supply protection for individuals with all forms of present medical situations”.
Does this imply the “age restrict on medical insurance purchases has been eliminated”, and does it imply all pre-existing situations will now be lined”?
Not fairly. The round solely says well being insurers ought to create merchandise for all age teams. It doesn’t say senior residents of all ages should buy present merchandise!
Insuring senior residents is a nightmare for any insurance coverage firm that needs to stay worthwhile (and due to this fact exist). Folks on this age group have all types of pre-existing illnesses. They’re extra prone to develop new situations with every passing 12 months, and what’s worse, they’re prone to be hospitalised regularly – every year or maybe greater than every year. And if there’s a surge in hospitalizations, insurers could have a tricky time paying claims.
If I had been in command of creating medical insurance merchandise, I might inform the world that the corporate is “growing” a particular product for senior residents to “comply” with the regulation and depart it at that.
When insurers launch these “particular” merchandise, count on them to be extraordinarily costly. Count on the acceptance course of to be far more rigorous (count on denials). Count on the premiums to be hiked each 2-3 years resulting from age and, extra typically, to lack of profitability.
IRDAI has solely mentioned, “Insurers shall endeavour to supply protection for individuals with all forms of present medical situations”. So, they don’t seem to be obliged to take action for each senior residents and youthful consumers.
Which means even when an unique senior citizen product is created to fulfill clause 6.1, insurers are free to limit entry in keeping with pre-existing medical situations.
So, this isn’t some new daybreak in medical insurance. It could solely profit wholesome senior residents who can afford excessive premiums. Even then, there isn’t a assure that claims will probably be paid with out problem. It’s higher to construct or allocate a sturdy corpus for dealing with hospitalizations.
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