India (IRDAI) to change its mind on permitting them to sell health plans of the kind they used to sell earlier. These were usually called ‘Mediclaim’ policies where the insured can avail treatment for pre-specified ailments and pay the bills at the hospitals and later claim the reimbursements from the insurance company. These were broadly termed indemnity-based health plans.
IRDAI put a stop to this practice in 2016 and as per a Moneycontrol report, the life insurance companies have reportedly approached the regulator now to revoke this ban so that they have a level-playing field. Insurers reportedly have said that it will also give customers a wider choice in terms of insurance products that can be offered.
One argument being put forward by the life insurance companies is that the practice followed in most other countries around the world is to treat life and health insurance as one set of products. The insurance regulator in India has been of the opinion that the general insurers are in a better position to offer health insurance plans and the life insurers must stay away from them. The latter feel this is not creating a level playing field and they are being discriminated against.
It is learnt that there has been no decision coming forth from the insurance regulator on this so far.
In a fixed benefit plan, which the life insurer can offer, if the IRDAI approves the request, the insurance cover is usually valid for a one-off treatment of an illness. It will lapse when the policy holder makes a claim for treatment under the policy and after making the payment applies for reimbursement.
The health insurance business has moved towards the cashless hospitalization route and the customers too appear to prefer these health insurance policies that offer this benefit. You need to present your health insurance card issued by the insurer and show the ID proof to be admitted in the hospital and the appropriate treatment to be started.