4 years after banning life insurance companies from promoting compensation-based health insurance policies, the Insurance Coverage Growth and Regulatory Authority of India (Irdai) has formed a group of nine members to examine the feasibility of allowing life insurers to provide these insurance policies once again.
The regulator had obtained statements from life insurance companies to enable them to provide compensation products as well. The Irdai panel could be chaired by G Srinivasan, director of the Nationwide Insurance Insurance Academy. The panel will submit its suggestions within two months.
A popular class of health coverage, compensation-based health plans protect the policyholder against sudden medical bills. The insurer reimburses the specific costs incurred by hospitalization as well as the sum insured. In some insurance policies, the policyholder can even declare the reimbursement after consulting a health care provider.
Tarun Chugh, Managing Director and CEO of Bajaj Allianz Life Insurance Insurance, says allowing life insurers to sell indemnity products will provide many benefits to clients. “Given the low penetration of Medicare in the country, the promotion of high value products by the strong distribution community of life insurers – brokers / companions / online – will help reap the benefits of the health insurance to many additional customers across the country. , allowing them to manage bills resulting from critical illness / hospitalization. “
Compensation-Based Wellness Hood
In Medicare, there are two types of cover: benefit-based and indemnity-based schemes. Right now, all 24 life insurance covers only promote for-profit wellness plans for buyers. Stand-alone non-life and welfare insurers each provide benefit and indemnity-based plans.
In mounted profit insurance policies, insurers pay a fixed amount which is the sum insured as a result of a statement. In indemnity-based insurance policies, commonly known as Mediclaim insurance coverage plan, insurers reimburse money spent on medical treatment after the policyholder has submitted all payments. hospitable. Common person’s health plans or floating household plans fall under compensation plans. As an illustration, if the sum insured for the coverage is “5 lakh and the policy holder submits a hospital bill of” three lakh, depending on the coverage situations, the insurer may pay Rs three. lakh to the policyholder and the remaining sum insured can be used for future claims throughout the period of coverage. In the case of a cashless hospital plan, the insured must pay a certain amount and the rest can be paid by the insurer.
The advantage of primarily benefit-based health coverage is that it covers a variety of treatments and illnesses and most policyholders prefer to purchase such an awning. These plans may also include a deductible, a lump sum paid by the insured for hospital bills and the remainder paid by the insurer.
Health insurance rules
In 2016, Irdai banned life insurers from providing benefit-based health products both as a person or as group coverage. The regulator has also banned life insurers from providing a single premium health insurance product under a unit-linked platform. In fact, the new health insurance rules, which came into force in July 2016, have made it possible for the first time to differentiate the choice of products by life and well-being insurers.
The regulator has allowed life insurers to provide long-term health insurance products for one person for a period of 5 years or more. He pointed out that the premium for such commodities would remain unchanged for a minimum of one interval of each block of three years and that the premium could also be reviewed and changed as vital. Common and stand-alone health insurers can provide individual health products with a minimum term of 12 months and a maximum term of three years, provided the premium remains unchanged for the term.
Santosh Agarwal, Managing Director of Life Insurance, Policybazaar.com, says life insurance companies perceive long-term pricing to be higher because they offer protection in the form of fixed-term plans for a minimum 25 to 30 years old. “Life insurers might be able to apply actuarial methods and assess value periodically, say every five years or so, instead of doing it every year. This step could be useful for buyers as it would improve a number of choices they can choose from with the intention of remaining protected.
While the Irdai panel recommends that life insurers can provide indemnity-based health insurance policies, policyholders should consider the pros and cons of each of the plans, and then choose the one that works best for them.