Lifeguards...

A batch of new guidelines from Irda is meant to guarantee that senior citizens make not endure owed to high costs charged by coverage companies.

For 20 years, Rajeev Saxena, 55 had a no-claims record with his medical coverage company. That is, he had been lucky that there weren't any important disbursals for his unwellnesses which had to be claimed from the insurer. Imagine his surprise, when he approached the same company for a renewal of his policy and was quoted a insurance insurance premium that was four modern times his existent premium. Obviously, he was livid. But a speedy hunt confirmed that most coverage companies are charging astronomically high for person of his age, in malice of the fact that he had a clean record. The statement was simple: he was at an age when falling sick was more than likely.

Saxena's experience is not unique. Many aged happen themselves in a similar state of affairs when they travel to renew in their medical policy. But they can take a breath a suspiration of alleviation now. Last month, the Insurance Development Authority of Republic Of India (Irda) have advised the coverage companies to curtail the insurance premium tramp to 75 per cent, thereby effectively putting a cap on the insurance premiums that tin be charged for renewals.

Medical insurance, in India, is undergoing a rapid change. Earlier, an sole sphere of non-life companies, a big figure of life coverage companies are getting into this sector. But the pricing of these merchandises from both life and non-life insurers is such as that it is unaffordable, especially for the senior citizens who necessitate it the most.

Traditionally, a medical coverage policy have been a one-year event which have to be renewed each year. Also, the policyholder have been subjected to a different insurance premium when they make so. Though, the gap up of the sector have led to introduction of long-term health coverage policies in the country, most of the people are covered under the traditional policy that demands a renewal each year. This procedure do the state of affairs unsure because a crisp tramp in the insurance premium can hit them hard. Of course, any claim in the former twelvemonth additions the likeliness of an upward alteration as well.

And for the senior citizens, it is a regular occurrence. There are lawsuits where the tramp in premiums, known as "loading" in coverage parlance, leaps significantly to even 100 per cent in a single year. But with this alleviation they can anticipate that some stableness in the pricing of the products.

In numbers, this agency that if a senior citizen paid Rs 12,000 as coverage premium for a specified amount of screen in the former year, the insurance company cannot complaint him/her More than Rs 21,000 adjacent twelvemonth for renewal.

Another important alteration that the Irda have introduced is that the coverage screen cannot be denied, if a individual is willing to pay the needed premium.

This agency that is that no coverage company can deny you a screen if you are willing to pay the premium. In other words, if a senior citizen is willing to blast out Rs 21,000 (as per our example) the coverage company will have got to supply the screen to the person.

More importantly, the coverage companies have got been told that any disease arising during the life of the policy will not be considered as a pre-existing disease. Again, this volition aid senior citizens because it is quite common for them to be diagnosed with some new disease at their age.

In short, while gap the marketplace for new players, Irda is beginning to fasten the guidelines to guarantee that policyholders make not suffer. And, that is great news in a state where societal security is not there at all.

(The author is a certified fiscal planner.)