No, IRDAI has not eliminated any 65-year-age regulatory cap on issuing health policies to senior citizens. Here’s what the norms mean

No. The view that IRDAI has only now allowed insurers to sell regular health policies to people above 65 years of age is misleading. There was never any regulatory bar on insurance companies offering policies to those older than 65. In fact, some insurers already offer a few of their regular plans to those over that age.

This is what IRDAI's Health Insurance Regulations, 2016, which were superseded on April 1, say: "All health insurance policies shall ordinarily provide for an entry age of at least up to 65 years." In other words, they could always offer even regular cover to those over the age of 65, which several companies already do. Besides, many also provide senior citizen-specific policies.

So, prior to March, insurers had to mandatorily consider proposals of those up to the age of 65—they could not outright reject such proposals citing an age bar. “Some may have taken advantage of the 65-year rule to turn down insurance applications from senior citizens, but now, insurance companies may have to design products and put out premium charts for all age groups,” says Nikhil Apte, chief product officer, Product Factory (Health Insurance), Royal Sundaram General Insurance.

But this does not mean IRDAI has removed any age cap or mandated coverage for those over 65. Insurers still have control over the decision to issue policies and fix premiums.

Typically, premiums for senior citizens are prohibitively expensive, given their advanced age and health conditions, putting regular health covers out of their reach. Even now, post new regulations, insurers can  reject such proposals if their underwriting (process of ascertaining risk and determining premiums) exercise indicates that it is too risky to issue policies.

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So what has changed post April 1? Will senior citizens be able to buy health policies post April 1, thanks to change in IRDAI regulations?

As mentioned earlier, insurers offered health products—regular as well as dedicated—to senior citizens even before April 1. All that IRDAI has done now is omit the mention of ‘65 years’.

This will not lead to any change for the better in the current situation on the ground. Senior citizens find it difficult to buy regular health insurance plans due to exorbitant premiums quoted for their age group, and not because IRDAI had, at any point in time, barred sale of fresh policies to them.

There is also talk of how the regulator has asked insurers to ensure that they offer health insurance products to cater to all the age groups. However, this does not mean insurers will have to necessarily issue their regular health covers to all. They could devise dedicated products for different cohorts, such as senior citizens, which is already the case.

Also, even the earlier regulations required insurers to offer covers to different age groups and demographics. “Health insurance product may be designed to offer various covers: for specific age or gender groups…for different age groups…,” the 2016 norms stated.

But are the regulations positive overall, from the elderly policyholder's perspective?

The plusses include the modified pre-existing illness (period diagnosis or discovery brought down from four years to three) definition and reduced maximum waiting period for such illnesses (down from four years to three) and most importantly, shorter moratorium period for disputing claims (down from eight years to five).

However, the omission of 65 years as the floor below which insurance proposals cannot be rejected citing advanced age could also turn out to be a googly. “Earlier, it was mandatory in all products to offer entry age up to 65 years. In fact, now, some insurers could design products where the eligible age at entry (at the time of purchase) is between, say, 18 years and just 35, 40 or 50 years at the upper end. This will allow more innovative and targeted products towards many different age cohorts.,” says Bhabatosh Mishra, director, underwriting, Products and Claims, Niva Bupa Health Insurance.

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As far as senior citizens are concerned, this change isn’t a necessarily a big positive. “Even earlier, insurers were allowed to offer products to people above 65 years of age. It actually is a much bigger positive news for younger citizens,” adds Mishra.

So, contrary to what is being publicised, excluding the mention of 65 years could actually be detrimental to the interests of elderly policyholders, who will then have to choose from the limited number of senior citizen-specific policies available in the market. “Insurers could decide that their regular policies will be available only for those up to the age of, say, 55 or 60 years. Others might have to settle for policies targeted at elderly individuals,” says Hari Radhakrishnan, regional director, First Policy Insurance Brokers.

Can senior citizens ever hope to buy affordable policies to cover their healthcare expenses?

If the situation is to change for senior citizens, insurers will have to come up with innovative, affordable offerings to provide health covers to this category, where the potential, despite high demand, remains untapped. Several insurers including Bajaj Allianz and ManipalCigna launched new products targeted at the elderly in 2023, and more companies jumping on the bandwagon could make health insurance more accessible to the silver population.