The Hindu Business Line : Buy one policy, get two covers

Life-health combo
Under the draft proposal, a life insurance company has to tie-up with a health or a general insurance company if it wants to sell a policy offering both pure-term life insurance and health insurance.
Health/general insurers have to tie-up with life insurance firms for issuing a combi product.

Remya Nair
Manish Basu

Mumbai/Kolkata, July 9 Customers can soon buy a single insurance policy and avail themselves of twin benefits – pure-term life insurance as well as health cover.

The Insurance Regulatory and Development Authority (IRDA) has circulated a draft proposal for the combi product named ‘health plus life combi products’ among all insurance companies – life, general and health – for their comments.

Under the draft proposal, a life insurance company has to tie-up with a health or a general insurance company if it wants to sell a policy offering both pure-term life insurance and health insurance. Similarly, health/general insurers have to tie-up with life insurance firms for issuing a combi product.

Policy term

IRDA has suggested that the policy term be restricted to at least three years and the maximum sum assured be capped at Rs 3 lakh. The sum assured limit of Rs 3 lakh is to be considered separately for pure-term life insurance and the health insurance portion, the draft says.

While selling the product, one of the players will assume the role of the lead partner and sell the product, said a CEO of a life insurance company.

The lead insurer will be the single point of contact for selling as well as settling claims of customers. IRDA has proposed a charge to be levied on the insurers availing themselves of common service and network of the “lead partner”.

The combi product will leverage the synergies of the life insurer and the general insurer to increase insurance coverage across the country.

Customer-friendly

“It’s a customer-friendly move by the IRDA. When customers take a health insurance cover, they get reimbursement for their medical expenses. But if the serious sickness leads to death, they get no money. So if a health insurance cover is combined with a life insurance cover, the kin can get a death claim also,” said Mr K. Sahay, Chief Executive Officer, Star Union Dai-ichi Life Insurance.

The tenure of the health insurance cover needs to be aligned with that of the life insurance policy, feel market players.

“The policy term of the health insurance portion might also need to be increased to three years from the permissible one year in order to be concurrent with the three-year life cover,” Mr N S R Chandraprasad, Chairman and Managing Director of National Insurance Company (NIC) said.

A senior officer at NIC said there was scope of including personal accident cover as well in the single combi policy.