Some insurers will charge the same premium under all options. “The premium amount will remain the same irrespective of the mode of payment," says S. Prakash, managing director, Star Health and Allied Insurance. Brokers, however, inform that some companies may charge you an extra amount if you go for any option other than annual.
The burden of paying the premium does get eased in a frequent-payment option. “In some COVID-19 cases, treatment costs have gone as high as Rs 14-15 lakh due to accompanying complications. If the sum insured on your family floater is not adequate, use the monthly payment option to enhance your cover,” suggests Amit Chhabra, business head, health insurance, Policybazaar.
Approval within two hours: At the time of admission, patients sometimes have to wait for a long time before the insurer gives its pre-authorisation for cashless treatment. IRDAI has directed insurers to give it within two hours (the same limit applies at the time of discharge). IRDAI had also said earlier that COVID-19 cases should be treated on a priority basis and before any claim for this ailment is rejected, it should be reviewed by the claims review committee (a high-level committee) of the insurer. IRDAI has also asked insurers to simplify procedures, which means they should not ask for too many documents or conduct time-taking checks.
Thirty days’ grace period:
Most health policies offer a grace period of 30 days for payment of renewal premium. Now, IRDAI has offered an additional grace period of 30 days, so that customers who use offline payment modes like cheques are able to pay once the lockdown
ends. “Both continuity of cover and continuity of benefits will be available to customers if they pay within the grace period,” says Prakash.
Health policies have a waiting period for pre-existing diseases (PEDs) ranging from two-four years. If you fail to renew within the grace period, you will have to buy a new policy and the waiting period for PEDs will begin all over again.
Claims procedure simplified: The regulator has also asked insurers to simplify the claims process for COVID-19 deaths. “If the claim form states that a death took place due to COVID-19, we will not ask for additional documents. We will process the claim based on just a death certificate or a hospital document,” says Anil. Normally, insurers ask for treatment records, and sometimes they investigate cases.
More time to pay premium: A 30-day grace period has been extended to life insurance customers too. Life insurers offer a 15-day grace period in the monthly payment mode and a 30-day grace period in other modes. Now, the effective grace period becomes 45-60 days.
If you fail to pay the premium within the grace period, you can revive the policy within the next six months by paying the premium outstanding and the interest charge (sometimes waived by insurers). If even this period has elapsed, you will have to undergo fresh medical check-ups.
Grace period for settlement in Ulips: In all unit-linked insurance plans (Ulips) that mature by May 31, 2020, the regulator has asked insurers to give customers the settlement option. Instead of receiving the fund value as a lump sum, they can receive it over five years, with a minimum 20 per cent payout at the end of each year. “This option has to be provided irrespective of whether this feature was originally available in a Ulip product,” says Anil PM, head-legal and compliance, Bajaj Allianz Life.
If, after a couple of years, customers wish to withdraw the balance as a lump sum, they can do so. “The net asset values (NAVs) of Ulips and their fund values have seen steep erosion in this market correction. If customers avail of this extension, the markets will hopefully recover after some time and their fund value will be protected,” says Mohit Garg, head of products, PNB MetLife Insurance.
Customers who don’t need the money urgently may go for this option. Besides recouping a part of their fund value, they will get a tax-free income stream. “If the cover is at least 10 times the premium, then even the settlement payouts will be tax-free,” says Sanjay Tiwari, director-strategy, Exide Life Insurance.