Is your health insurance plan being withdrawn? Here’s how to quickly adjust and stay protected | Mint

Tata AIG General Insurance has withdrawn its ‘Medicare Protect Plan’ with effect from September 5. The move will not impact customers who have to renew their policies within 90 days from the date of the withdrawal of the product.

Tata joins SBI and HDFC Ergo, which announced withdrawal of its health insurance policies recently. While HDFC Ergo pulled out three variants of its ‘Suraksha’ policy in May, SBI announced in June that it is withdrawing its ‘Arogya Plus’ policy with effect from October 5.

The withdrawal of ‘Medicare Protect’, which is a basic health insurance policy that comes with a sum insured of ₹2 lakh to ₹5 lakh offering a wide range of benefits including maternity cover, could lead to higher premiums for existing policyholders during migration, industry observers said.

Here are a few things that you should know when your health insurance policy is withdrawn.

What happens next?

When a policy is withdrawn, it simply means that it is not available for new purchases.  Insurance Regulatory Development Authority of India (IRDAI) has mandated that existing customers of a withdrawn product shall be provided a one-time option to renew the existing product if renewal falls within 90 days from the date of withdrawal of the product.

“Policies due for renewal within 90 days from the date of withdrawal of the product would be eligible for renewal (i.e. policies with expiry date on or before Tuesday 3 December 2024). We request you to renew the policy before the expiry date to enjoy continuity of your insurance coverage,” Tata AIG said in a communication to its policyholders.

IRDAI has stipulated that policyholders can also migrate to any other suitable product (any other existing product or modified version of the withdrawn product) as per her/his choice. “Policies due for renewal 90 days after the withdrawal of the product (i.e. policies with expiry date on or after Wednesday 4 December 2024) will have the option to migrate to a suitable health insurance product,” Tata AIG said. “A separate product migration letter providing coverage, terms and conditions and premium details of the product would reach you before the renewal due date,” it said.

What will be the impact?

Policyholders will not lose any of their existing basic benefits due to the withdrawal. “We assure you that your continuity benefits with respect to pre-existing diseases waiting period, specified disease/procedure waiting period, 30 days waiting period and cumulative bonus would be transferred to the suitable health insurance product offered by Tata AIG as per the IRDAI provisions,” the insurer said in its communication.

But Medicare Protect’s policyholders may not get the same set of features when they migrate/port to a new health insurance plan. Medicare Protect’s family floater plan covers the proposer (self), spouse, three dependent children (up to 25 years of age) and two dependent parents. The policy even covers maternity expenses, which is capped at ₹50000 ( ₹60000 for girl child) and all payments made towards consumables (gloves, surgical kit etc.) during hospitalisation.

The policy does not have co-payment where the insurer has to pay a stipulated percentage of the claim amount. ‘Medicare Protect’ also offers ‘restoration benefits’ wherein an additional amount equivalent to the base sum insured will be restored if the original cover is exhausted due to high claims. The option is available once during the policy period. Medical expenses incurred for in-patient treatment for AYUSH (Ayurveda, Unani, Siddha and Homeopathy) are also covered under the policy.

Will there be an increase in the premium?

Since the insurer has withdrawn the product, a new product that the policyholder chooses will have a different premium. Some experts believe that the migration would result in higher premiums. “Customers will be migrated to other suitable insurance products! Indirect way to move customers to superior products to increase the premiums,” Nikhil Jha, who follows the life and health insurance sectors closely, posted on X (formerly Twitter).

“Same happened with HDFC ergo, suraksha policy moved to optima restore and my premium was increased from 18K to 26K,” a user wrote on X.

“I think it’s important to look at the bigger picture. Are they really putting their customers first, or are they just trying to boost their bottom line? Apply common sense,” another user said on X.

Allirajan M is a journalist with over two decades of experience. He has worked with several leading media organisations in the country and has been writing on mutual funds for nearly 16 years.