IRDAI bans life insurers from offering indemnity-based health products

The insurance regulator has banned life insurers from offering indemnity-based health products, which constitute 90 per cent of the health insurance market, dealing a blow to their business plans.

Indemnity-based plans are those where one can claim reimbursement after visiting a doctor.

The Insurance Regulatory and Development Authority (IRDAI) has asked insurance companies offering these products to withdraw them by giving three months’ notice to policyholders and to continue the existing contracts till the end of their policy term.

“We will have to withdraw our indemnity health insurance products,” said RM Vishakha, MD and CEO, IndiaFirst Life Insurance. IRDAI has allowed insurance companies to offer a combined health and savings product.

It has allowed general and standalone health insurance companies to offer long-term health insurance products for a minimum period of one year and a maximum period of three years with no premium changes. These do not include personal accident and travel.