What is KYC in Health Insurance?

  • Author :
  • TATA AIG Team
  • Published on :
  • 04/01/2024

Health insurance plans are designed for individuals to cater for their medical needs. Considering the rising medical cost and top-notch Medicare, every individual believes in investing in health insurance plans.

Individuals who buy medical insurance plans need to go through the insurance provider procedure. The one crucial thing that is needed in a health insurance plan is KYC or Know your customer. As per the IRDAI(Insurance Regulatory and Development Authority) regulations, the process of KYC is mandatory for insurance.

This blog will help in learning the importance of KYC for health insurance.

What does KYC Mean?

KYC, meaning know your customer, is a process issued to verify the address and identity of the customer. It is a government-mandated process for all financial institutions, such as banks, insurance, etc. The process of KYC is implemented to prevent money laundering, fraud, etc. By doing health insurance KYC, insurance providers will know if the person is legitimate before offering the insurance services.

What is the Importance of KYC?

There are several benefits of carrying out the KYC process, which are listed below:

Transparency- Insurance companies need the personal or sensitive data of customers to offer the services. By conducting the KYC process, the legitimacy of the user is accessed, through which insurance companies can gather customer documentation without hesitation to offer transparent services to customers.

Risk Assessment- Another perk of KYC for health insurance is it helps insurance providers assess the risk linked with offering coverage to customers. By analysing the person's medical history or health, insurance providers will be aware of the type of medical insurance claims and all.

Better Customer Experience- Besides this, by doing a health insurance KYC, insurance companies offer better customer experience to their customers. By collecting personal data about medical history and issues, insurance providers can offer the best custom-made plans to their policyholders.

Regulatory Compliance- Another thing which makes KYC mandatory for insurance services is to maintain regulatory compliance. There are some regulations that need to be followed by the financial institutions. Violating these regulations can cause serious trouble to institutions.

Fraud Prevention- Last but not least, health insurance KYC is imposed to prevent any fraudulent activities. It helps insurance companies to verify the real identity of the user before offering any services.

Different Types of KYC Process

Depending on the user's convenience, there are different types of KYC processes are available, such as:

Paper-Based KYC- The very first type of KYC process is paper-based KYC, which generally happens in person when a customer or user submits their self-attested address and identity document to the institutions.

Digital KYC- Another KYC process is digital KYC, where individuals can submit the KYC document online. In the digital KYC process, a live photo is captured. Then, the company verifies the submitted information with the geo-tagged document.

Aadhar-Based KYC- This type of KYC process makes use of an Aadhar card. By opting for Aadhar-based KYC, individuals can verify their identity using the Aadhaar biometric or Aadhar OTP. The registered number would be needed for Aadhar-based OTP verification, and for biometrics, users need to do biometric verification on UIDAI-certified scanners.

Central KYC-Central KYC or CKYC is the type of KYC process where users' KYC documents are recorded in a central repository. This central repository is government-authorised and can be used using the 14-digit assigned number.

Offline KYC- Offline KYC is a process where individuals need to share their downloaded Aadhar paperless e-KYC document. Besides this, users also need to give consent that the provided information can be used for KYC verification.

Video KYC- Lastly, video KYC is a process that utilises video conferencing technology. In this process, individuals need to submit their KYC online in the presence of an authorised agent using an application or web portal.

Documents Needed for KYC for Health Insurance

Below is the list of documents needed for the health insurance KYC.

Valid proof of identity documents such as Aadhar card, driving licence, voter ID, PAN card, passport, etc.

Legitimate documents for address such as Aadhar card, passport, voter ID, etc.

If you have an NREGA job card issued by a state government officer.

Bank details.

Recent photographs.

Income tax receipts.

Procedure to Do Health Insurance KYC

For health insurance KYC, there are online and offline methods, which we are going to discuss below:

Step to do Health Insurance KYC Offline

Step 1: To do the offline KYC, visit the insurance company branch.

Step 2: Ask for the KYC form and fill it out carefully.

Step 3: Submit the form along with other documents to insurance providers.

Step 4: The insurance provider representative will assess all the documents and complete the KYC process.

Step to do Health Insurance KYC Online

Step 1: To do the KYC process online, visit the insurance provider's website.

Step 2: Look for the online KYC option and fill out the KYC form carefully.

Step 3: Next, upload all the relevant necessary documents for the KYC process on the portal.

Step 4: After that, submit the form and then the insurance company will verify the submitted documents and finish the KYC process.

Things to Keep in Mind While Doing Health Insurance KYC

To ensure the successful submission of KYC, keep below points in mind such as:

It is best to submit a self-attested copy of the address and identity-related documents.

It is advisable to verify that the name and address in the KYC document should match the details provided by you on the insurance company application form.

Furthermore, if you are submitting the document online, then make sure to submit it in the proper format as asked by the insurance company

While submitting the photographs for KYC, it is best to submit the photographs in a defined size and background.

Lastly, while submitting the scanned documents, make sure to submit the front and back sides of each document.

Need for Purchasing Health Insurance Plan

Health insurance plans provide a financial cushion to individuals at the time of medical emergency. Individuals with medical insurance plans at the time of crisis can focus more on recovery and medical care without worrying about medical bills. From critical illness plans to cashless hospitalisation facilities, there are various benefits of health insurance plans.

Everybody is unique, and so are their medical conditions; Tata AIG understands this. With our health insurance plan, individuals can seek custom-made plans based on their health and needs. Further, we have various coverage options such as OPD cover, newborn cover, worldwide covers and more for our policyholders.

Conclusion

The KYC process is an integral part that individuals need to go through while purchasing a health insurance policy as per the IRDA. Those who have purchased the health insurance plan before and forgot to do KYC need to submit the KYC documents to the companies. Not just for new insurance, KYC for insurance renewal is also mandatory. You can visit the insurance company's website or reach out to their representative and ask for the KYC process.

FAQS

Can I do KYC verification online?

Individuals can do KYC verification online by visiting the KYC registration agency website. Here, individuals need to do the suggested procedure by website, and within minutes, their KYC process is completed.

What are the KYC requirements?

The requirement for doing the KYC process is identity verification, document verification and face verification in some cases.

Why is KYC important?

Knowing your customer is the process that helps banking and other institutions verify the original identity of the user and prevent any fraudulent activities.

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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