Awareness of health insurance has risen in India, and insurers are taking advantage of it to design newer products. Most insurers offer three basic products: a hospitalisation cover, a top-up cover for expenses not covered by the former, and a critical illness cover.
Some insurers also cover accident claims, permanent disability, outpatient department (OPD) expenses, and expenses for specific treatments such as cardiac care and diabetic care. There are products catering specifically to senior citizens and to women, and products with a smaller ticket size designed for tier-2 and tier-3 locations, such as Tata AIG General Insurance’s MediRaksha. Customisation is being built into products, as in the case of Religare Health Insurance’s Enhance, a customised deductible plan for families that provides an extra safety net of coverage at a relatively low premium.
There is even greater differentiation on offer. “We have Star Wedding Gift Insurance, where apart from regular hospitalisation cover, we extend coverage for delivery, including post-delivery complications and newborn baby cover. Newborns are covered even for congenital anomalies,” says V. Jagannathan, chairman and managing director of Star Health and Allied Insurance.
Then there is the all-rolled-into-one product, such as Future Generali India Insurance’s Health Total. “The 21 benefits include hospitalisation cover, restoration benefit, 50 per cent cumulative bonus (increase in the sum insured) for every claim-free year to a maximum of 100 per cent, OPD cover, vaccination expenses, treatment taken abroad for certain listed conditions, maternity cover with shorter waiting periods, and discounts on voluntary deductible,” says Shreeraj Deshpande, head of health insurance at Future Generali.
Tata AIG has a combination product as well. “The Wellsurance series offers a beautiful combination of wellness, health insurance and critical illness insurance products,” said M. Ravichandran, president of insurance at Tata AIG General.
Such diversification is natural. Says Yashish Dahiya, founder and chief executive officer of PolicyBazaar.com: “Health insurance is an evolving and strongly growing sector worldwide, and with increasing lifespan, changing customer needs, especially with a barrage of new lifestyle conditions being discovered, the associated health insurance cover must change to meet growing needs.”
The plethora of health covers can challenge buyers. Asked whether buyers are likely to be confused by them, Rahul Agarwal, founder director of Ideal Insurance Brokers, said, “Absolutely. With more than 20 companies offering more than 200 products, it is impossible for a customer to choose the right cover.”
Buyers must consider a number of factors. “While selecting an appropriate type of insurance, customers need to make sure that it is aligned with their specific requirements—whether they are looking for a hospitalisation-based coverage, critical illness, personal accident insurance or maternity-specific plans,” said Anuj Gulati, managing director and CEO of Religare Health.
Agarwal says the sum insured should be determined on the basis of the number of people in the family, their age and history of illnesses. Dahiya says inquiries should be made about provisions for room rent waiver, cumulative bonus and restoration benefits. “Cumulative bonus, popularly known as inflation protection, would help increase your sum insured from 5 per cent to 50 per cent per year, depending on the plan. Restoration benefit, on the other hand, would restore your base value as soon as you exhaust it.”
Dahiya recommends that one’s first health cover be an indemnity plan, which reimburses or provides for medical expenses incurred on hospitalisation, room rent and doctor’s fee. Such a cover is sometimes provided to salaried individuals by their employers. The next step for such individuals would be to buy a top-up. “The top-up cover is suitable for individuals or families who have some form of basic health insurance. It can also be taken by individuals who are able to bear out-of-pocket health expenses up to a certain extent and need cover only for expenses beyond that,” says Sanjay Datta, chief of claims, underwriting and reinsurance at ICICI Lombard General Insurance.
Says Puneet Sahni, head of product development at SBI General Insurance: “A top-up plan acts as a buffer if the existing cover is exhausted because of any unforeseen illness. The cost of a top-up cover is relatively lower than the base cover and one can get coverage for higher limits at lower premium.”
Long-term issues like medical inflation should be accounted for while buying a policy. “If your aim is to have health cover at an older age, a policy offering lifetime renewability should be considered,” says Sahni.