In this article I will be explaining the new rule announced by IRDA in favor of health insurance customers. The new announcement says beginning July 1st, customers can carry benefits to the new insurer which is not existing till date. It will create healthy competition between the insurers and increase the customer satisfaction. Till this time, if you are switching your insurer, then you will loose waiting period and the accumulated bonus on your previous insurer. This stops policy holders to stick with the same insurer for the long time. This will be changed from 01-July-2011 to switch your insurer without losing your accumulated benefits from the previous insurer.
What is Waiting Period in Health Insurance?
When you get the new policy, there will be 30 days waiting period. In that duration you can not claim any expenses due to the hospitalization. This is not applicable when the policy is renewed. This is called as the initial waiting period.
Apart from the initial waiting period, there is waiting period for the pre-existing illness of the policy holder. This normally varies from 1-5 years depends on the illness and insurance company. For example, if you have any pre-existing illness and had expenses before completing the waiting period, you are allowed to claim those expenses.
The waiting period is normally reset when you change the insurance company. That means if you switch to another insurer, you have to start the waiting period from the beginning. It is loss for the policy holder. According to IRDA, from 01-July-2011 the waiting period will not be reset while switching to the another insurer.
Carry Your Bonus to New Insurer
Health insurers credit bonus to the policy holders if there is no-claim for the entire year. For example, you have not claimed any expenses for the past three years and accumulated the bonus of Rs.60000. As per the existing rule, when you are switching to the new insurer, the accumulated bonus will be lost.
But, with the new rule, from 01-July-2011 the bonus amount will be carried to the new insurer.
It is one of the good step taken by the IRDA to help the health insurance customers. This move will bring the healthy competition between the insurers and insist them to satisfy their needs. If they are not serving better, customers have the option of switching to new insurer without losing the benefits.