Policy pill

New Delhi, Sept. 3: A health insurance policy can be returned within 15 days of its issue if the policyholder is not satisfied with the terms of the agreement. The policyholder will get a full refund of the premium paid.

“The insured has a period of 15 days from the date of receipt of the documents to review the terms and conditions of the policy. If the policyholder disagrees with any of those terms or conditions, he has the option to return the policy stating the reasons for his objection,” the Insurance Regulatory and Development Authority (IRDA) said in a circular to all general insurance companies.

The free-review period is applicable only to health insurance policies with a cover of three years or more. The policyholder will get a refund of the premium paid after deducting expenses of the insurer on medical examination of the insured and stamp duty.

In cases where risk has already commenced, the proportionate premium will be deducted from the refund.

“Where only part of the risk (e.g. only accidental hospitalisation risk) has commenced, such proportionate risk premium shall be calculated as commensurate with the risk covered during such period,” the circular said.

Insurers can also provide a free-look period in policies of less than three years if they want, the regulator said.

The provision of free look will be applicable to all policies issued, or renewed, on or after October 1, 2009, said the IRDA, adding that all general insurance companies must comply with the provisions.

“Any failure to do so would render them (general insurance companies) liable to appropriate action under the provisions of the IRDA Act, 1999 and the Insurance Act, 1938,” the IRDA said.

At present, there are 22 life insurance firms and 21 non-life insurance companies operating in the country.