All you want to know about Arogya Sanjeevani

Bavadharini KS | Updated on June 08, 2020

With the outbreak of Covid-19 pandemic, many first-time buyers are on the hunt for health insurance policy for self and family.

However, an individual looking to buy a policy for the first time, is not only overwhelmed by the choices in the market but also swamped by the many terms and conditions and jargon they need to navigate, to understand these products.

To address this issue, the insurance regulator IRDAI recently introduced a standard health insurance policy named Arogya Sanjeevani, which all general and health insurers will need to have on their menu.

What is it?

Arogya Sanjeevani is a health insurance policy where the coverage, exclusions and other aspects of the policy such as co-payment (cost-sharing arrangement where the policyholder pays a certain percentage of the claim from his/her pocket) and sub-limits (cap on coverage for a particular treatment), are the same across insurers. The name of the policy too is the same in the market but succeeded by the name of the insurer. For instance, Manipal Cigna’s product is named Arogya Sanjeevani Policy, ManipalCigna.

Launched in April, Arogya Sanjeevani is like any other health policy which provides financial compensation to an individual when hospitalised for injuries and illnesses up to a particular sum insured.

A policyholder can avail of the cashless facility across the network hospitals of an insurer and get can get his/her expenses reimbursed. Among insurance companies offering this product, the only differentiating factor is in the premium and the process of on-boarding a customer. The buyer gets to make a decision based on the credentials of the insurer and the cost, instead of comparing a long list of complex features across different products.

Why is it important?

The main objective of launching Arogya Sanjeevani is to take care of the basic healthcare cost of the public. The policy has basic mandatory covers such as hospitalisation, including for Covid-19, day-care treatment, pre- and post-hospitalisation expenses, and offers tax benefits. A second objective is standardisation, that is to have the same policy terms for all, irrespective of the insurer.

The policy offers cumulative bonus facility, that is, additional increase in sum insured (up to maximum of 5 per cent) without any increase in existing premium payment. This clause is same across insurers. The waiting period and one-year policy term are standard. A third objective is to have seamless portability between insurers. If servicing facilities are better with an insurer, then a customer can easily port without having to worry about the changes in policy benefits, coverage and other features.

Why should I care?

As health insurance is a complicated product for many due to the variety of products and features of policies in the market, making a choice becomes difficult. Affordability of the product too comes to question. In the case of Arogya Sanjeevani, since the maximum sum insured is ₹5 lakh (minimum ₹1 lakh), the premium may work out lower. With the policy being the same, you as a policyholder get to choose the insurer based on the premium, services offered and network hospitals.

While Arogya Sanjeevani checks all the boxes for offering basic health coverage at an affordable price, it comes with downsides. It features a sub-limit on room rent. If the policyholder is hospitalised, then room rent, boarding and nursing expenses would be limited to 2 per cent of the sum insured up to a maximum of ₹5,000 per day. It also has a fixed co-pay of 5 per cent on the total eligible claim. Two, for insurers, other health products providing comprehensive coverage generate better income; so they may not be keen to push this product.

The bottomline

At a time of health distress, basic insurance is better than nothing at all.

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Published on June 09, 2020

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