Can policy features change?
An insurer cannot unilaterally introduce a sub-limit, co-payment or exclusion midway through the policy period. “A regulator-sanctioned product revision communicated months in advance may change terms at renewal,” says Amit Tungare, managing partner, Asahi Legal.
The revisions could make the policy more or less restrictive. “A product may be enriched with higher cover or broader benefits, or it may be quietly narrowed through a disease-specific cap, a room-rent ceiling or an age-linked co-payment,” says Tungare.
The insured need not compulsorily accept the modifications. “If a product is withdrawn or modified, the insured should be given the option to migrate to a similar product of their choice,” says Hari Radhakrishnan, expert, Insurance Brokers Association of India (IBAI).
Compare old and new terms
On receiving the renewed policy documents, check the policy schedule, which shows the sum insured, covered members and policy period. The policy wordings provide the detailed terms and exclusions. “The Customer Information Sheet (CIS) summarises coverage terms and can be used for comparison,” says Radhakrishnan.
Insurers usually email these documents at renewal. Radhakrishnan says the policyholder should retain policies from earlier years. This makes comparison easier.
Do a detailed comparison of key features. “Compare the sum insured, treatment-specific sub-limits, room-rent limits, co-payments, waiting periods and exclusions in the expiring and renewed policies,” says Yash Raj, senior associate, 3Sixty Law Group.
Even a small change can affect a claim payout. “Seek an explanation for an unexplained premium spike or a new clause before paying the renewal premium,” says Tungare.
In addition, examine whether the cashless authorisation process has changed and whether a preferred hospital remains in the cashless network. Also verify the no-claim bonus, each covered member’s name and date of birth, add-ons and other policy details.
Challenge undisclosed restriction
A restriction must form part of the operative policy. It should have been communicated to the policyholder and accepted by them.
Ask the insurer for the complete wording, schedule and CIS for the year of the claim. Request the renewal proposal and a claim assessment that explains each deduction. Also ask the insurer to identify the clause it has applied.
Mohit Mansharamani, counsel, SKV Law Offices, emphasises that when an insurer relies on an exclusion clause, the burden of proving it lies on the insurer. “Where the deduction is contrary to the policy, reversal of such deduction and payment of the balance claim should be sought,” says Soayib Qureshi, partner, PSL Advocates & Solicitors.
First, file a complaint through the insurer’s grievance channel. If the complaint remains unresolved for 15 days or the response is unsatisfactory, approach the Insurance Regulatory and Development Authority of India (Irdai) Grievance Redressal Cell. You can also register a grievance on its Bima Bharosa portal.
Approach the Insurance Ombudsman after the insurer rejects the complaint or after a month without a reply. “File an Ombudsman complaint within one year and the amount should not exceed ₹50 lakh,” says Mansharamani.
The Ombudsman may first attempt mediation and then issue an award. “An Ombudsman award binds the insurer and must be implemented within 30 days,” says Mansharamani.
If this remedy is unsatisfactory, approach a consumer commission.
An increase in the sum insured also calls for caution. The insurer cannot reassess the existing sum insured. “Enhancement generally does not remove continuity benefits on existing cover,” says Qureshi.
He adds that the insurer may undertake fresh underwriting only for the increased portion of the sum insured.
Inform the insurer about changes in health accurately when applying for enhanced cover. “Disclose illnesses, hospitalisations, surgeries and ongoing medication since the previous proposal,” says Raj.
Read every answer before signing the proposal. Retain the signed proposal, medical reports and correspondence with the insurer. “Treat the enhancement as approved only after written confirmation and a schedule showing the increased sum insured and its conditions,” says Raj.
Check that the insurer has recorded your declaration correctly in the policy schedule.
The insurer may renew the existing cover while declining the increase. “If the increase is declined, ask for the reasons in writing,” says Mansharamani.
Pay the premium for existing cover on time even if the insurer declines the enhancement.
Watch out for restrictions
Waiting periods may begin afresh for the increased portion. The pre-existing disease waiting period applies afresh to the increased sum insured. “A claim for a condition still subject to a waiting period on the increase may be limited to the original sum insured,” says Qureshi.
The 60-month moratorium on the enhanced limit starts on the date of enhancement. “The enhanced portion remains open to challenge on disclosure grounds for five years from the date of enhancement,” says Mansharamani.
The writer is a Mumbai-based independent journalist
Check the terms of enhanced cover
• Verify new sum insured, effective date, covered members in the revised schedule
• Review the premium and exclusions applicable to enhanced sum insured
• Check for waiting periods on pre-existing diseases and specified illnesses
• Check Customer Information Sheet, policy wording for sub-limits on enhanced cover
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