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It is said that things get better with age. Not so when it comes to renewing policies when you are a senior citizen. But worry not there is good news for senior citizens. The Insurance Regulatory & Development Authority (IRDA) has decreed that senior citizens can now revalidate their old mediclaim policy, if the insurer had refused to renew it earlier and forced them to take up a new policy.
Insurers are guilty of having done this very often in the recent past, especially if the insured had come up with genuine big-ticket claims. Running policies have not been renewed, and sometimes, such claims have also not been honoured. To make matters worse, insurance companies have brain-washed old people sufficiently to make them take up more costly and newer policies instead where the premium is nearly 200-300% more! This has for quite sometime been the favourite system of cutting losses incurred by way of claim payments.
IRDA has now tightened the screws on insurance companies. IRDA chairman CS Rao has been noted to have said that now senior citizens will be able to knock off the new policy when it comes up for renewal and revert to the old one that they were forced by insurers to discontinue and insurers will have to comply with. He mentioned that they had received a large number of complaints from senior citizens in this regard. He justified the move, which should be music to thousands of the country’s elders who are covered by the health insurance net. What’s best is that not only would the old policy get renewed, but all accrued benefits like bonus that stood against the insured’s name till the policy ran, would once again be made available also.
Of course, there is a price to pay for it. But it is a small one. The premium for renewal of a discontinued policy will not be more than 75% of the last paid premium on that policy. So, if the last paid premium on the old policy was Rs 10,000, the insured can now renew it at a revised maximum premium of Rs 17,500. Still, it is a bonanza because the new policies that are usually forced down the throat command premiums at least thrice the amount. While revalidating his old policy at the revised premium, senior citizens can discontinue the new ones that they have been forced to purchase.
Way from being perfect as it is, mediclaim policies in the country have especially been harsh on old people, presumably because insurance companies always thought that insuring senior citizens was a loss-making proposition from the start. Old people do fall sick more often and insurance companies have always been generally reluctant about settling claims, especially tall ones or those that are raised very frequently.
Insurers, therefore, have often refused to renew an existing policy held by a senior citizen on flimsy grounds. A popular ploy not to honour a tall claim was to say that the diseases “pre-existed” the policy. Incidentally, in insurance lexicon, the nomenclature of “pre-existing diseases” is still unclear and many opinions exist. Be as it may, senior citizens have thus often been nudged out of policies that have been running for years, the accrued benefits naturally getting forfeited and they have been brain-washed into buying newer mediclaim policies that commanded 200-300% higher premium.
The logic is simple. If the risk is to be taken, let the insured also pay through the nose. For senior citizens, most of whom are superannuated, this is difficult. Despite the huge financial strain, some of them still opt for such new policies to cover future ailment possibilities. Health insurance company insiders do confess that policies for senior citizens always turn out to be loss-making since the elderly fall ill more frequently. The possibility of future claims also rise in senior citizen policies, which is why they try every trick in the book to prevent renewal of running mediclaim policies that do not have very high premiums.
IRDA is now determined to stop the practice. If a senior has been forced to take up a much more costly new policy, he can now insist that his old one be revalidated when the new one comes up for renewal. And what’s more, all the accrued bonuses will remain intact.
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