How the new health insurance customer insurance sheet (CIS) will help policyholders

CIS will provide a quick summary of the key clauses in your policy

From January 1, 2024, insurance companies will have to provide their health insurance policyholders with an updated document that will provide a quick glance at key policy clauses, the timeframe for paying claims, grievance redressal processes, and so on.

The Insurance Regulatory and Development Authority of India (IRDAI) has mandated a new format for issuing such a document – termed customer information sheet (CIS) – along with policy documents at the time of purchase and renewal. The purpose is to provide a quick summary of crucial policy terms and conditions, as policyholders may not be able to pore over and absorb the voluminous policy documents.

Even at present, insurers have to share this CIS – for which a standardised format was originally introduced in 2020 – with policyholders, but the newer, updated version comes with explanations in simpler language.

Also read: IRDAI proposal: Key health insurance features and clauses in a single, easy-to-decode document

Here are the key features of the CIS – existing as well as new – that will help you decode your health insurance policy wordings in simple terms.

Sum insured and type of policy 

The CIS format being used currently does not include information on the sum insured, despite this being central to the policy. The new CIS will specify the sum insured or cover amount under individual as well as family floater policies.

Insurers will also have to state whether the policy operates on the reimbursement principle, where hospitalisation expenses are reimbursed to the extent of the sum insured, or is a defined benefit cover that pays out a pre-agreed sum upon diagnosis.

Benefits under the policy 

The CIS contains information on the benefits you are entitled to under your policy and the conditions under which they will come into play. For instance, a hospitalisation claim will be payable if you are admitted beyond a certain number of hours (usually 24 hours, except in the case of listed day-care procedures), details of pre- and post-hospitalisation expenses, a list of day-care procedures that will be covered, OPD, maternity coverage, and others.

Free-look period  

Unlike other financial products, insurance policies come with a unique feature – the option of ‘returning’ them should you notice a gap between promises and actual offerings. You can do so during the initial 15-30 days of receipt of the policy docket. In the new CIS, this period will be stated upfront.

Turnaround time for claim settlement 

In the current format, the CIS does not require health insurers to spell out the timeframe for paying claims. But from January 1, they will have to mention the turnaround time for paying out claims and pre-authorising cashless payouts.

This will give policyholders an idea of the period beyond which they need to escalate complaints of delay in claim processing.

The CIS will also carry information on the list of network hospitals where cashless facilities are available, information on blacklisted hospitals, and helpline numbers.

Waiting periods, exclusions, and deductibles 

These are critical clauses that directly impact your claim settlement and, hence, form part of the current as well as the new CIS. Waiting periods come into the picture for certain procedures, such as hernias or cataracts in the initial one to two years, while for pre-existing diseases, they can go up to four years.

That is, claims related to such illnesses will not be paid during the waiting period. Insurers also have to mention the exclusions, or expenses that will not be paid for, and deductibles — the amount that you have to shell out before the insurer settles the claim.

Since the new CIS requires them to list all the exclusions, this will ensure that customers will not face heartburn due to non-payment of any expense at the time of claim processing.

Likewise, a quick glance at the CIS will help policyholders figure out the sub-limits such as room rent capping, co-pay (where the policyholder has to bear a part of the claim burden), deductibles (the initial expense limit up to which the policy will not pay the claim), and so on.

Grievance redressal  

Insurers will have to share the contact details of the company’s grievance redressal officers and IRDAI-appointed ombudsman offices in the CIS so that customers have a handy guide to getting their grievances addressed through the right channels.

Portability and migration 

The insurance company will have to detail the process for migration to another product or porting out to another insurer. Currently, the insurer is only required to mention the email IDs and addresses of the company officials who need to be contacted if a policyholder wishes to switch to another insurer.

Moratorium period 

The rules on moratorium changed in 2019, and many health insurance policyholders may not be aware of the consequent benefits. Moratorium is the period after which insurance companies are barred from raising queries around disclosures on pre-existing illnesses that the policyholder may have had at the time of buying the policy.

Put simply, your health disclosures made at the time of policy purchase cannot be called into question post this period. The moratorium, as per IRDAI rules, is triggered after eight continuous years of a policy being in force. “After the expiry of the moratorium period, no health insurance policy shall be contestable except for proven fraud and permanent exclusions specified in the policy contract,” your new CIS will state.