Standard health insurance policies used to be cheaper but capping on daily room rent, ICU charges etc causes problems for policy holders. On the other hand, premium products don’t contain most of the constraints and are more user friendly, but are expensive.
However, after the policies are being standardised as per the directive of the Insurance Regulatory and Development Authority of India (IRDAI), policyholders are getting renewal notices with higher premium even if there are no changes in age slab or the sum insured.
So, what features the newly standardised products are offering to make them expensive?
“IRDAI introduced modified guidelines to Standardise the Health Insurance Contracts which aimed at introducing standard wordings for common clauses and exclusions across health insurance indemnity policies to benefit the policyholders by bringing in uniformity in the Policy terms and conditions, help in simplification and ease in understanding the policies,” said Mayank Bathwal, CEO, Aditya Birla Health Insurance.
“With this standardisation there were certain conditions which were excluded earlier are now offered to the policyholders like coverage for Procedures such as Robotic Surgery, Oral chemotherapy, High Intensity Focussed Ultrasound, Balloon Sinuplasty, Deep Brain Simulation, Developmental problems & learning difficulties like dyslexia and Treatment for ARMD (Age related macular degeneration),” he added.
“Certain clauses like Disclosure of Information, Claim Settlement (provision for Penal Interest), Complete Discharge, Multiple Policies, Fraud, Cancellation, Migration, Portability, Renewal of Policy, withdrawal of Policy, Free look period, Redressal of Grievance, Nomination etc are now Standardised,” Bathwal further said.
According to Girish Rao, Chairman & Managing Director, Vidal Health Insurance TPA, “During 2020, with a view to simplifying Health Insurance products, IRDAI issued guidelines to standardise some terms and conditions for Health policies such as disclosure of information, claim settlement terms, cancellation, and renewal of a policies etc. Much earlier they had mandated portability of health policies. They also asked insurers to clearly declare norms of Associate Medical Expenses and allowance for Disability and HIV etc.”
“We think this standardisation of terms and products across insurers will go a long way in increasing the penetration of Health Insurance among large masses. The simplified policy terms will be competitive and drive lower premiums. The result was there to see with an amazing take up of Covid policies. Large corporates as well as Individual customers subscribe to these policies in large numbers,” Rao further said.
But how much is the average increase in premium after the standardisation?
“With standardisation of health insurance, insurance cover for policyholders is now more exhaustive and is available with no change in the premium for the majority of the products and a marginal increase in a couple of products,” said Bathwal.
Negating the reports of rise in premium, Rao said, “We have not seen any increase in premium so far. There may have been some increase in cost per claim due to implementation of Covid protocols in Hospitals but I think this is short term. As soon as vaccinations reach a critical mass we should see these costs come down.”
Although health insurance players are reluctant to reveal the quantum of rise in premium, holders of even policies with even premium features have witnessed a rise in renewal premium.
The quantum of rise in renewal premium, however, varies from insurer to insure and product to product.
For example, the holder of the basic version of a premium health insurance product has witnessed 19.45 per cent increase in renewal premium, while the holder of the higher version of the same product has reported nearly 16 per cent increase in renewal premium.
So, along with standardisation of features of the health insurance policies, the insurance regulator should consider standardisation of premium as well.