Offer a standard health insurance policy, the regulator tells all insurers

CHENNAI: The Insurance Regulation and Development Authority (IRDAI) has ordered everyone health insurance companies to offer a standard health insurance product - Arogya Sanjeevani Policy - which covers the basic expenses related to hopitalization, pre and post admission treatment and Ayush treatment. Both non-life insurers and independent health insurers will offer this policy as of April 1, 2020.

The move comes after the insurance regulator observed too many variations in individual health insurance products which it said had confused the public while choosing health insurance covers.

Throughout India, standard health policy will have uniform rates

The standard policy will have cumulative bonus benefits and insurers will not be allowed to impose deductibles. However, customers will be subject to a fixed co-payment of 5% of the claim amount for all ages, which will be explicitly disclosed in the application.

The regulator has asked all insurers to offer this coverage only as compensation (protection). This means that they can only pay the actual expenses incurred (either without cash or by reimbursement). There can be no additional coverage such as serious illness or benefit-based coverage. The insurers will have the final decision on the price of the premium. However, rates have to be uniform throughout India and insurers cannot have geographic or zone-based prices.

We already have a standard coverage and we don't see many challenges of

These guidelines at this point. Although common prices across the country are mandatory, insurers are free to decide the price of the policy. In the future, we can expect some relaxation of the clause without geography-based pricing, said Sanjay Datta, head of underwriting and claims, ICICI Lombard General Insurance.

The Arogya Sanjeevani Policy can be used for both individual lives and floating families. The minimum and maximum sum insured will be Rs 1 lakh and Rs 5 lakh, respectively. The product, which will not have an exit age, will allow a minimum and maximum entry age of 18 and 65, respectively, and from three months to 25 years for children under family flotation policies.

The standard product will be offered with a policy term of one year and will allow all modes of payment of the premium, that is, monthly, quarterly, semi-annual and annual.

Treatment for cataracts and age-related eye diseases, ulcers, piles, sinusitis, benign ENT disorders, tonsillitis, adenoidectomy, mastoidectomy, tympanoplasty, hysterectomy and all internal and external tumors will be covered subject to a waiting period of 24 months. Treatment for joint replacement, unless it arises from an accident and age-related osteoarthritis, will have a waiting period of 48 months.

The main objective will be to offer health coverage that addresses the basic health needs of the insurance public, which will have a common policy wording throughout the industry and facilitate trouble-free portability among insurers, the IRDAI said.

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