Less waiting period, no age gap: ACKO Insurance’s Rupinderjit Singh explains IRDAI’s new health cover rules

The new set of rules by the IRDAI will empower one of the most sensitive demographics to secure them against major health-related concerns, albeit paying higher premiums.

Earlier, the 65-plus age group at a big level was not able to avail of treatment benefits from advanced healthcare facilities owing to multiple reasons, the primary concern being unaffordability.

However, with the new reforms coming in, this problem will now be eliminated from the ecosystem.

Moreover, the reduction in the waiting period from 4 years to 3 years, coupled with coverage of all pre-existing health conditions post-waiting period, are among other advantages of the new set of rules.

In an interview with Business Today, Rupinderjit Singh, Vice President of Retail Health at ACKO, explained how the recent initiative by the IRDAI will benefit senior citizens aged 65 and above. He also gave insights about the challenges faced and the potential rise in premium costs for this demographic.

What are the advantages of removing the age cap for the insurance company?
The new order by IRDAI is another instrumental move for the insurers as it will increase the eligible base of customers who can purchase health insurance due to the inclusion of this cohort. Some of the insurers earlier were keeping a higher age capping for customers to buy health insurance. This move will bring more competition and transparency in the >65 years category. Companies can now build new products or enhance the existing products by keeping in mind the comprehensive coverage to the entire family including parents instead of the current approach of restrictive offering for senior citizens.

What does this mean for old-age policyholders?
While this does not impact any existing old age policyholders, it brings in more options for the customers to choose from, in case they want to port from their current covers to more comprehensive coverage.

What are the key challenges you foresee in its implementation?
Some of the key challenges that this category could go through in the next few years are:

Accurately pricing premiums for older policyholders due to limited past experience
Ensuring adequate coverage without affordable premiums.
Administrative/process level hurdles in updating medical underwriting processes.

Are you planning to install any additional screening process for the insured people?
Some insurers already offer insurance products without any capping on the age. Hence they don’t foresee any changes in their current screening and underwriting processes.

Are you expecting any impact on your cost?
We risk price our policyholders at the time of onboarding based on their health status, age and other parameters. As new segments of customers come into the fold with more awareness in the market, the impact of the same will be dependent on what the insurers experience in the next few years.

If someone buys a policy at 60, 65, and 70, by how much will the premium increase?
Premiums usually increase with age due to increasing health risks. On average, premiums increase by about ~10% – 20% for every five-year age bracket in line with the experience of respective insurers and the situation of increasing health inflation, which in India stands at around 15%.

Will the waiting period be longer?
As per the IRDAI mandate, waiting periods are capped to a maximum of three years from the current four years, which will see most insurers increasing the cost of insurance to all customers in the range of 10-15%.

Anything more senior citizens should be aware of when buying policies after the removal of the age gap?
The customers within the category may or may not have any health conditions. Users with no medical conditions should look at buying the most comprehensive cover with 100% bill payment and lesser or no wait periods. Customers with any existing health issues should evaluate multiple insurers for the options that they can have and try to optimise coverage and cost of insurance for themselves. Some of the parameters that they should consider are, network coverage, room rent limit, disease sub-limits, consumable cover and other policy T&Cs which may curtail the payout at the time of claim.

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