Buying health cover will now be a breeze

Buying health insurance has been made simple now. Saving you from the hassles of choosing a policy, the insurance regulator has mandated insurers to come up with a standard health cover product at an affordable price.

As per the guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI), all general insurers and standalone health insurance companies will have to offer a mandatory health cover product, Arogya Sanjeevani, from April 1, 2020.

“The standard health product will also supplement the PMJAY which is meant for people below poverty line. Hopefully, middle-class and senior citizens will find this product useful,’’ Subhash C Khuntia, Chairman, IRDAI, told BusinessLine.

It will also complement efforts under the Ayushman Bharat initiative for a healthy India, he added.

Simple product

The product is simple to comprehend. “In health insurance, there is no adequate time nor scope to understand serious terms. Here, we have tried to put across the basic simple terms and conditions with few exclusions and waiting period for pre-existing disorders,’’ Khuntia said.

The policy should be sold with a minimum sum insured of ₹1 lakh with a upper limit of ₹5 lakh for a term of one year. Apart from covering the basic hospitalisation needs of a policy holders, it will also have a 5 per cent co-pay clause; the room rent will be limited to 2 per cent of sum insured or ₹5,000, whichever is lower.

The entry age will be 18-65 years with lifelong renewability and there is no exit age, which will help senior citizens. The policy covers 22 diseases/treatments with a varying waiting period from 24 to 48 months. It will be offered on indemnity basis and should not be combined with critical illness covers or benefit-based covers.

The premium under this product will be the same across India and no geographic location-based pricing will be allowed. The insurers will now have to file their products with the regulator and will have to offer it from April 1.

The insurers can offer more comprehensive products without co-pay, with additional features and higher sum insured according to customers’ needs.

Pricing

With reference to pricing, the IRDAI has allowed the insurers to fix the price. “However, the pricing will also be ‘reasonable’ in view of the competition as all general insurers and standalone health insurers will have to offer it,’’ the regulator said. There are 32 general insurers in the country now.

“We have incorporated many points we gathered from the insurers and all other stakeholders in the guidelines,’’ IRDAI Chairman said.