Insurance is an ever-changing sector. Rapid advancements in science & technology and constant upgrades to insurance rules and regulations lead to new policies and regulations in life, health and motor insurance policies. 

Consumers have to be updated with the latest policy changes and rules pertaining to their insurance policies to take utmost advantage of their policies during claim processing. 

We have rounded up the top 21 changes relating to life, health and motor insurance policies for 2021 so far. It is good for every policyholder to know these changes for their own benefit: 

Important Changes In The Life Insurance Segment: 

1. Saral Jeevan Bima: The IRDA instructed insurance companies to launch a standard term plan called Saral Jeevan Bima, under the domain of life insurance, with the goal of providing the much needed coverage at affordable premiums. Individual coverage of up to Rs.25 lakhs is guaranteed under the plan. This type of standard life insurance plan is meant to suit the needs of a wide range of people without discriminating on the basis of their occupation, gender, or occupation.

2. Using E-KYC to Issue Policies: During the pandemic, a feature of e-KYC called video KYC was launched to make digital signatures and online verifications easier. 

3. Surging claims due to COVID-19: Insurance firms have been asked to honor death claims resulting from COVID-19 in order to provide financial assistance to policyholders.

Important Changes In Health Insurance Sector

4. Launch of the Arogya Sanjeevani Policy: Arogya Sanjeevani Policy, which was launched on April 1, 2020, is a standard indemnity-based insurance offered by all insurance firms offering health insurance plans, with the goal of simplifying health insurance. It is a cost-effective policy that covers the entire family for sums insured ranging from Rs. 1 lakh to Rs. 5 lakh. Claims originating from COVID-19 treatment are also covered under the coverage.  

5. Corona Kavach Policy: To deal with the pandemic scenario, the Corona Kavach Policy was also launched. Individuals are covered for expenses incurred as a result of COVID-19 treatment and hospitalization. The Corona Rakshak Plan is another comparable plan. Corona Kavach provides indemnity coverage, whilst Corona Rakshak Plan provides fixed benefit coverage. Both are short-term plans with no option to renew for the rest of your life.

6. Flexible Premium Payment Options: Due to the pandemic emergency, policyholders were given the option of paying premiums in monthly, quarterly, or half-yearly instalments for the first time ever. The decision was made in order to alleviate the financial hardship experienced by policy buyers.

7. More Transparency in Policy Terms and Conditions: The IRDAI has requested that insurance companies declare the diseases that they would not cover for a period of up to four years from the policy's beginning. Policyholders can now declare any ailment three months after purchasing the policy.

8. Convenient Cashless Claims: To put policyholders' minds at ease, the IRDAI authorized insurance companies to give cashless claim benefits in the event of claims arising from COVID-19-related hospitalization. Insurance firms were also urged to cover COVID-19 from the first day of the policy for customers who were previously insured. People who have acquired a new insurance plan, on the other hand, are protected after a 15-day waiting period.

9. Changes in Age Criteria: Insurance firms can now lower and raise the minimum and maximum age requirements for purchasing health insurance plans. Previously, the maximum age limit was 65. The insurers must submit a certificate to the IRDAI to notify them of the change in age limit.

10. Issuing Policies Through E-KYC: In the same way that life insurance customers were granted policies through e-KYC, health insurance customers were also issued policies through e-KYC, obviating the need for physical documents.

11. Lesser Exclusions And Much Needed Inclusions: Under indemnity-based health insurance policies, the insured is now covered for mental diseases, telemedicine, and advanced treatments.

12. Continued Coverage for Critical Illnesses, Genetic Diseases, and Mental Illnesses: The IRDAI has ordered insurance firms to provide critical illness coverage for genetic diseases, neurological disorders, and psychological disorders in their health insurance plans. The idea behind including coverage for mental diseases is that people should not be concerned about costs before seeking treatment.

13. Insurance Companies Have the Freedom to Change Health Insurance Premiums Based on Loss Ratio: The insurance regulator has given insurance companies the freedom to increase or decrease the health insurance premiums of various plans by 15% while keeping in mind the terms and conditions of the policies. On the basis of the loss-sharing ratio from the preceding three financial years, corporations can do the same. However, the premium can only be altered three years after the policy terms and conditions have been changed.

14. Policyholders Have the Freedom to Choose TPAs: Policyholders can now select their preferred Third Party Administrators (TPAs) from a list provided by the insurance firms. At the time of policy renewal, policyholders can also alter their TPAs.

15. Modern Treatment Coverage: Modern treatments such as balloon sinuplasty, oral chemotherapy, radiation, and others are now covered in the coverage benefits of health insurance policies and cannot be denied. Domiciliary hospitalization, daycare treatment, or in-patient treatment are all options. However, sub-limits can be imposed by insurance providers based on policy design.

16. No Rejection of Claims Upon Completing 8 Policy Years: There will be no claim rejection after 8 years of continuous coverage from the policy's commencement date, and no health insurance policy will be contestable except for permanent exclusions or those proven to be fraudulent. The moratorium period is a span of eight years.

17. Standardized Exclusions: When it comes to identifying exclusions and waiting periods, the policy wordings are made more apparent. According to IRDAI, confusing language such as," "indirectly related to," and "etc." should not be utilized. Standardization of insurance wordings is another step toward greater transparency for both the insured and the insurer.

18. Pre-Existing Diseases Have a New Definition: The definition of pre-existing diseases has been updated. Any condition, ailment, injury, or disease diagnosed by a physician within 48 months of the insurer's policy issuance or reinstatement date, or for which medical treatment was advised by or received from a physician within 48 months of the policy issuance or reinstatement date. This is to assist policyholders in better understanding pre-existing disorders.

Important Changes In Motor Insurance 

19. Long-Term Insurance Plans: are being phased out: Comprehensive car and bike insurance plans have been discontinued to make motor insurance plans cheaper and to reduce misselling. If you wish to buy long-term insurance plans, you can only get third-party insurance now.

20. Pay-As-You-Use Coverage: This coverage allows automobile insurance consumers to turn on and off their policies as needed. This assists policyholders in lowering the premiums they must pay for their insurance plans, increasing the popularity of those programs. 

21. Removal Of The Concept Of Long-Term Own Damage Cover: Another development in the auto insurance industry in 2020 was the removal of the concept of long-term own damage protection starting August 1, 2020. Long-term package cover is no longer available in both vehicle and two-wheeler insurance for both third-party and own-damage coverage for the next 3/5 years. For new automobiles, only third-party insurance coverage can be obtained for the long term. This means that only one year of own damage insurance can be sold at a time, along with the obligatory 3-year or 5-year third-party coverage for automobile and two-wheeler insurance.


These changes are just some of the most important changes that the consumer should know. IRDAI regularly updates new regulations and policies for insurers and insurance companies. Consumers should keep themselves updated with these updates to ensure the maximum utilization of their insurance policies. 


  1. What is a Cashless Facility under Health Insurance?

A policyholder with a cashless health insurance policy can receive treatment at any of the network hospitals without having to pay the hospital bills because the Third Party Administrator pays the hospital directly on behalf of the insurance company. Bill amount in excess of the insurance policy's limits or sub-limits, as well as expenses not covered by the policy, must be borne by the policyholder. 

  1. How can I apply for the Saral Jeevan Bima policy?

Saral Jeevan Bima policy is available from all leading insurers. You can contact your life insurance company or your insurance agent to buy this policy. 

  1. Who is eligible to get the Arogya Sanjeevani Policy?

Arogya Sanjeevani Policy can be purchased as an individual plan or a family floater plan. Persons in the age group of 18-65 years can purchase this plan for themselves and their family members. 

  1. How many years of 3rd party damage cover can I get under a motor insurance policy?

As per new regulations, one can get long term 3rd party damage for 3 to 5 years. This reduces your insurance cost considerably. 

  1. What is the ‘Pay as you Drive’ feature in car insurance?

Pay as you Go or Pay as you Drive is a new concept in car insurance. In this concept, you will be required to select a "distance to be travelled" slab when purchasing the plan, and your insurance premium will be computed based on this slab. This feature allows you to buy insurance based on the distance you will be travelling during the insurance period thus reducing insurance costs considerably.