The Hindu Business Line : Market yet to evolve for high-end health covers

Life insurance players, such as ICICI Prudential and Tata AIG, offer a cover of up to Rs 20 lakh for a 20-year period. (Until a few years ago, health insurance was the forte of general insurers and life insurers used to offer it as a rider. But now they are aggressively offering stand-alone healthcare policies. World over, health policies are offered only by life insurance companies.)

In contrast, the health insurance products offered by Indian non-life insurers are of lower sum assured and are typically for a much shorter period, usually one year.

For example, the highest regular health cover offered by general insurer Cholamandalam MS is Rs 10 lakh. On the other hand, public sector companies cap it at Rs 5 lakh. Star Health, a stand-alone health insurer, offers a 10 lakh policy, while Apollo DKV Health plans to launch a 20-lakh cover next year.

Awareness still low

People opting for health insurance largely go for a cover of less than Rs 3 lakh, said Mr Gopala Rathnam, Managing Director, Cholamandalam MS. He said the Rs 10-lakh health policy forms less than one per cent of the premium garnered by the company since people do not see the value of high-value health cover.

Mr Binay Agarwala, Senior Vice-President & Head Health Products, ICICI Prudential Life, notes that customers do not quite realise the need for niche health products. In the company’s experience, even within the high-value products, customers prefer to buy less costly products though the sum assured is lower.

Insurance experts say health insurance awareness is still very low and high value health cover comes at an additional premium, for which customers do not see value.

Yet, insurance companies continue to offer high-value products in the hope that there would be demand for them in the future. “We are positive that there will be demand for our high-end product,” says Mr V. Jagannathan, Chairman and Managing Director, Star Health Insurance