According to the draft guidelines issued by Insurance Regulatory and Development Authority (IRDA) in May, travel, personal accident and critical illness (CI) covers will come under the health insurance segment. Health insurance business means the effecting of insurance contracts which provide for sickness benefits or medical, surgical or hospital expense benefits, travel health insurance and personal accident cover, said the IRDA draft.

At present, personal accident and CI covers come under miscellaneous business. The Health Insurance Act, which comprises health insurance, does not include travel, personal accident and CI covers. Hence to include these covers under the health insurance may require the approval of finance ministry.

Also, personal accident, CI and travel covers are offered only as standalone coversan insurance product that an individual buys to cover a specific risk or cost. It is the opposite of an insurance policy with broad coverage that applies to a number of risks in different scenarios. While, benefit covers (issued by life insurers) can be bought as an add-on on term plans. IRDA wants travel medical policies to be offered either as a standalone product or as an add-on cover to existing health policy as and when existing policyholder travels. Anshul Anand, CEO, PolicyMantra.com, said, In the draft guideline, IRDA has mentioned two options for travel insurancestandalone policy or as an add-on to the existing health insurance policy. Lifetime renewability is not applicable for travel insurance as it is provided for temporary visit and lifetime renewability is available only when there isuninterruptedrenewal hence this contradicts.

The renewability of health insurance policies (Chapter IV) of the draft, says, Benefit based policies where policies terminate on happening of the event as per the terms and conditions of the policy; renewability clause shall explicitly state such conditions in the promotion material and the policy documents. Ex. Critical illness benefits policies.

In case of CI, policy ceases once the benefit is paid while in health insurance continues even after the claim is made. CI are like riders or standalone cover which cannot be renewed like health insurance plans, added Mr Anand.

He further said, Portability thing is not clearly mentioned in the draft for CI and hence it will raise some concerns as CI works differently from mediclaim. We will be able to comment more only when IRDA supply further documents on CI. We have also discussed things with reinsurer and they too felt that more clarification is needed. The regulator has also disallowed assigning policies to anyone else. Thus, policyholders may not be able link any of the general insurance policies to loan.

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