The insurance sector is undergoing constant transformation to better serve its customers, and recent developments reflect this ongoing evolution. These changes aim to enhance transparency, accessibility, and overall customer experience, making policies easier to understand and more beneficial. Whether you’re a current policyholder or considering getting insured, staying informed about these updates is crucial to ensure you’re making the most of the available benefits and protections.
Venkatesh Naidu, CEO, Bajaj Capital Insurance Broking, shared 10 critical updates to insurance policies and how they directly impact you;
1. Pre-Existing Disease Waiting Period Reduced
The waiting period for pre-existing diseases has been shortened from 48 months to 36 months across all products and variants. This is a major win for policyholders, allowing them to access coverage for pre-existing conditions sooner.
How this helps you:
If you have pre-existing health conditions, you no longer have to wait four years to make a claim. With this change, you can seek coverage a year earlier, easing potential financial burdens related to medical treatments.
2. Nomination Details Required at Renewal
At the time of policy renewal, it’s now mandatory to confirm your nomination details. This ensures that the right beneficiary is recorded, helping avoid complications during claim settlements.
Why it matters to you:
This step prevents any confusion or delays in ensuring your loved ones receive the policy benefits in case something happens to you. A simple confirmation can save your family from unnecessary stress.
3. Bank Account Details to Be Provided Upfront
When you log a new policy, you will now need to provide your bank account details. This speeds up processes such as premium payments and claim settlements.
Why it’s important:
By providing your account details upfront, any future payments—whether claims or refunds—are processed without delays. This also minimises paperwork and ensures smooth transactions, especially during emergencies.
4. Extended Free Look Period: More Time to Evaluate
The free look period, previously 15 days, has been extended to 30 days. This gives you more time to review your policy documents and reconsider your decision if necessary.
Why it benefits you:
Sometimes it takes time to thoroughly read through the fine print of your insurance policy. With this extended window, you can ensure the policy suits your needs and make changes or even cancel if it doesn’t, without any penalties.
5. Grace Period Adjustments for Premium Payments
For all policies, a 30-day grace period is now standard. However, for policies with monthly premium payments, the grace period has been set at 15 days. Importantly, your policy coverage remains intact during this time.
What it means for you:
This gives you some breathing room if you miss a payment deadline. The grace period ensures that your coverage remains active, giving you peace of mind, especially during financially tight months.
6. Pro-Rata Premium Refunds on Cancellation
If you choose to cancel your policy after the free look period, the refund will now be calculated on a pro-rata basis, rather than using the short-period grid system.
How this affects you:
This change ensures that you receive a fair refund based on how long you’ve had the policy, rather than a generalised formula. It makes the cancellation process more equitable and provides more financial fairness.
7. Group Policyholders to Receive Customer Information Sheets
For group insurance policies, a Customer Information Sheet will be provided to the master policyholder once the proposal is signed. This document outlines all the benefits, terms, and conditions in a simple format.
Why this matters to you:
If you’re part of a group insurance plan, ensuring that the master policyholder has a complete understanding of the policy can help streamline the claims process and ensure everyone covered under the policy knows what’s included.
8. Consent Required for Data Sharing
Insurers will now be required to obtain explicit consent from you for sharing your data with third-party service providers. This measure strengthens customer privacy and ensures transparency.
What it means for you:
You have more control over who has access to your personal information. This change increases transparency and helps ensure your data is only shared with your knowledge and consent.
9. Portability from Group to Retail Policies Now Possible
Consumers now have the option to port from a group insurance policy to a retail policy across insurers, depending on underwriting guidelines.
Why this is beneficial to you:
If you are part of a group insurance policy through your employer or other organisation, you no longer need to worry about losing coverage if you switch jobs or leave the group. You can transfer your benefits to an individual retail policy with ease.
10. Moratorium Period Shortened
The moratorium period has been reduced from 8 years to 5 years. After this period, claims for pre-existing diseases cannot be denied.
How this works for you:
Once you’ve held a policy for five years, your insurer cannot deny claims based on pre-existing conditions. This offers better protection for long-term policyholders and gives more confidence in coverage for future claims.
A New Era of Customer-Friendly Insurance
These updates reflect a positive shift towards making insurance policies more transparent, accessible, and customer-centric. Whether it’s the reduction in waiting periods, more flexible payment options, or enhanced portability, these changes have been made with policyholders in mind.
As a policyholder, it’s crucial to stay informed about these changes to ensure that you fully benefit from them. Always take the time to review your policy terms, check your nomination details, and be aware of the deadlines to make sure your coverage remains active.
In this dynamic landscape, the key to getting the most out of your insurance is understanding how these improvements work for you. If you have any doubts, don’t hesitate to reach out to your insurer or advisor for clarity and guidance.
Complaint Against Insurance Company
Policyholders must know the nuances of insurance policy to avoid inconvenience at the time of claim or surrender. The regulatory body of insurance in India, the Insurance Regulatory and Development Authority of India, has laid down rules to be followed by insurers and if policyholders feel that their interests are not met or the insurer is not resolving the grievance, you can reach out to the IRDAI to register a complaint.
