Insurance is often viewed as a distant promise, which holds little significance in one’s present. But in reality, insurance is like a lighthouse — its true worth realised only when the storm hits. The proverbial storm here is the moment of truth or claims. It, therefore, comes as no surprise that the regulatory body is firing on all cylinders when it comes to easing claims settlement for consumers.
In a landmark move, the IRDAI’s recent guidelines aim to streamline and enhance the health insurance claims process. Groundbreaking among them is setting the three-hour timeline on cashless claims. While the earlier Cashless Everywhere initiative was aimed at expanding the reach of healthcare, the new update is focused on further easing the financial woes of policyholders.
Easing recovery
A recent Policybazaar report — Is India Happy With Health Insurance Claims? — found that in the absence of a cashless facility, close to 70 percent reimbursement claimants ended up breaking their savings or resorted to borrowing to fund upfront medical expenses. Accelerating the claims process allows policyholders to focus on recovery rather than administrative hurdles.
The regulatory body through several initiatives has emphasised the role of digital platforms in modernising health insurance. According to our study, 94 per cent claimants had their claims approved, with approval rate touching an impressive 97 per cent if initiated and handled through online channels. The intervention of online platforms is even able to bring down the rejection rate from 6 percent to 2.5 percent, which demonstrates the value of digitisation. Unsurprisingly, excessive paperwork and long processes emerged as top dissatisfiers. A digital approach offers an efficient, reliable way to handle claims.
Addressing the persistent issue of claim rejections, the IRDAI called for greater transparency and communication through initiatives like the CIS (customer information sheet) mandate. Our data indicates that about half of the six percent of rejected claims are due to non-disclosure of pre-existing conditions or diseases not covered by the policy. The IRDAI’s updated guidelines encourage insurers to simplify and enhance clarity around policy terms, which in turn should lower the rate of claim rejections. Additionally, the moratorium period is cut from eight to five years. After five years of continuous premium payments, policies become incontestable, except in fraud cases.
The IRDAI’s latest approach is a visionary blueprint, paving the way for a fully insured India by 2047.
(The writer is Chief Business Officer - General Insurance, Policybazaar.com. Views are personal.)