IRDA allows people to surrender health policy within 15 days

Giving an exit route to health insurance policy holders, the Insurance Regulatory and Development Authority (IRDA) said today people subscribing to such policies with a cover for three years or more can surrender them within 15 days if they are not satisfied with the terms and conditions of the agreement. 

"The insured has a period of 15 days from the date of receipt of the  documents to review the terms and conditions of the policy. Where the policy holder disagrees to any of those terms or conditions, he has the option to return the policy stating the reasons for his objection," IRDA said in a circular to all general insurance companies. 

The IRDA further said that the policy holder would be entitled to a refund of the premium paid, however, expenses incurred by the insurer on medical examination of the insured persons and the stamp duty charges would be deducted.

The insurance regulator further said that in cases where risk has already commenced, the proportionate risk premium for the period on cover would be deducted from the refund at the time of returning the policy.

"Where only part of the risk (eg. only accidental hospitalisation risk) has commenced, such proportionate risk premium shall be calculated as commensurate with the risk covered during such period," it said. The circular would come into effect for all policies issued or renewed on or after October 1, 2009. 

Insurers can also voluntarily opt to provide such a free look in period even in health insurance policies of duration less than three years, IRDA said.

When only a part of the risk (accidental hospitalisation risk) has commenced, such proportionate risk premium shall be calculated as commensurate with the risk covered during such period.     

Insurers can also voluntarily opt to provide such a free-look period even in health insurance policies of duration less than three years, IRDA said.     

The provision for free-look for health insurance policies will be applicable for all policies issued or renewed on or after October 1, 2009, IRDA said, adding that all general insurance companies should ensure due compliance with the provisions.     

"Any failure to do so would render them (general insurance companies) liable to appropriate action under the provisions of IRDA Act, 1999, the Insurance Act, 1938, and the regulations framed thereunder," IRDA said.