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The Telegraph
26 May 2009
Calcutta, India

Insurance Relief for Seniors
Come July, citizens up to the age of 65 will be able to buy health insurance policies of their choice.

In a circular issued to all general insurers, the insurance regulator had said all health products filed hereafter must allow entry at least till the age of 65.

“Any proposal (for health insurance of senior citizens) denied on any ground should be made in writing with reasons furnished and recorded,” the Insurance and Regulatory and Development Authority (IRDA) said.

“Such reasons should stand the scrutiny of reasonableness and fairness,” the regulator added.

According to the circular, if an insurer accepts a proposal from a policyholder, it will have to issue an identity card within 30 days, failing which it will attract penalties from the insurance regulator.

The circular, which comes into effect from July 1, is expected to plug the gap in the health insurance system for senior citizens.

At present, insurance companies either do not offer fresh medical policies to people above 60 years or sell them only as special plans with prohibitive premiums.

Under these special plans, the maximum sum assured is much lower than offered under regular health schemes.

For example, the state–owned National Insurance Company, at present, allows entry into its regular health plan up to the age of 59. People above 59 have to buy its Varistha Mediclaim policy that comes with a fixed sum assured of Rs 1 lakh for domiciliary treatment and hospitalisation and another Rs 2 lakh for critical illness cover. Compared with this, the maximum sum assured is Rs 5 lakh under its regular mediclaim policy.

Almost all non–life insurers have capped the age for buying their regular mediclaim policies at 55–60 years. For senior citizens (above 60 years), they have come up with special plans.

When the new circular comes into effect in July, this anomaly will get rectified and a senior citizen will be able to buy a health insurance plan of his/her choice.

The circular states, “The premium charged for health insurance products for senior citizens should be fair, justified, transparent and duly disclosed upfront. The details of any loading (additional risk premium) charged must also be made available to the insured.”

At present, a policy buyer, who is 60 years of age or more, has to undergo a medical check–up before an insurer issues him/her a health plan. The cost of this medical check–up is borne by the policy buyer.

The IRDA has now provided some relief by making it mandatory for insurers to “Reimburse at least 50 per cent of the cost incurred by the insured in pre–insurance medical examination, in case where the risk is accepted”.

The new circular will help seniors to know the material information relating to insurance cover and likely premiums for future renewals.

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