Disease-specific health insurance plans are gaining traction

Siddharth Biswas, 32, wants to take no chances when it comes to health. Having faced the trauma of the untimely demise of his father due to cancer, he wants to be “adequately prepared” for any such eventuality.

Siddharth has signed up for a cancer-care product offered by ICICI Prudential for an annual premium of ₹4,800.

Attractive pricing and customised offering make disease-specific health insurance products a preferred choice over critical illness plans, which typically cover a host of illnesses including cancer, heart ailments, stroke, kidney failure and burns.

“I already have a comprehensive health insurance cover from my company. I wanted a specific illness cover. I did not want to take critical illness plan as it was more expensive,” Siddharth told BusinessLine .

Siddharth is right. The annual premium for a typical critical illness plan, (covering 20 diseases), for a 30-year old, could work out to be close to ₹5,600, while a cancer-care product costs at least 45 per cent lesser.

According to Dhruv Sarin, Head of Health Insurance, Policybazaar.com, there has been a rise in demand for standalone health insurance policies. Customers tend to choose these products over critical illness as they feel the probability of getting some of the diseases covered under such plan is relatively low.

“Before the launch of specific products, we used to sell around 50 critical illness policies a month. Now we sell close to 2,000 cancer-care policies a month,” he said.

The biggest advantage of niche plans is that they provide coverage for the disease at all stages — early or advanced.

Moreover, such a plan or product saves on premium and takes care of the financial burden in life-threatening situations as it pays lumpsum benefit or indemnifies the medical expenses, Sandeep Patel, MD and CEO, Cigna TTK Health Insurance, said. A regular health plan offers coverage to pre-existing ailments on completion of a predefined waiting period usually ranging from two to four years. However, the waiting period in case of these disease-specific products is waived.

From an insurer’s point of view, it is easier to sell such products as a bundled offering with loan products due to its competitive pricing, Sanjay Datta, Chief – Underwriting & Claims at ICICI Lombard General Insurance Company, said.

According to S Prakash, COO, Star Health and Allied Insurance, which recently launched a cover for persons already diagnosed with cancer, “Unless insurers come with a competitively priced product to cover people with pre-existing illnesses, customers will not gain confidence in the concept of insurance.”

Ashish Mehrotra, MD and CEO, Max Bupa, says that while disease-specific cover has its own set of advantages, given the rate of medical inflation and the complexity of ailments, one should opt for a mixed portfolio to ensure health expenses of all or most kinds are covered.

Insurers should also be careful while categorising products based on the specific need of customers to avoid mis-selling, Anurag Rastogi, Member of Executive Management, HDFC ERGO General Insurance, said.

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