Should you go for Care Health’s new rider plan — Care Shield?

Care Health, earlier called Religare Health Insurance, launched a rider cover — Care Shield — in December 2020. The rider can be purchased with the company’s existing health plans Care, Care Freedom (diabetes cover) and Care Advantage (₹1- crore sum insured (SI) cover). A rider is an add-on insurance cover that comes with the basic policy for an additional price.

We review if the rider, Care Shield, is worth the money or only a cosmetic change that agents are using as a selling point.

What’s on offer

Care Shield comes with three features. One is Inflation Shield, which gives the benefit of increased SI at the time of renewal as per the Consumer Price Index (CPI) inflation rate for the previous policy year. The idea is to help policyholders afford higher medical costs.

The second feature is Claim Shield. Here, the insurer promises to cover costs of 60-plus items, such as belts, braces, buds, crepe bandages, gloves, leggings, masks, oxygen mask, spirometer, thermometer and ambulance equipment, which are used during treatment.

The third feature is No-Claim Bonus Shield where, if the policyholder has not made any claim in the previous year, the insurer will give her a reward when the policy is renewed.

This is through a bump-up in SI (by 60 per cent) at no extra cost. According to the policy brochure, this feature also ensures that any low-value claim (< 25 per cent of SI) does not lead to any erosion of the accumulated No- Claim Bonus (NCB).

For example, for a ₹10-lakh policy, if there is a claim of up to ₹2.5 lakh, there is no reduction in NCB.

Our take

Care Health’s base plan — Care — is a good product with a competitive premium. The policy allows pre- and post-hospitalisation cover of 30 days and 60 days, respectively, covers all day-care procedures, and allows claims of up to 10 per cent of SI for domiciliary hospitalisation (insured person is considered hospitalised even when she is home).

However, there is no great benefit in the Care Shield rider. First, the increase in premium offered through Inflation Shield is linked to CPI and not medical cost inflation. While CPI increases by 4-5 per cent, medical inflation is in double digits.

So, one can’t expect much relief from a CPI-linked SI increase. The insured will have to anyway increase the SI under her base plan if she wants to be covered sufficiently to ride over the inflation-linked spike in healthcare costs. It is prudent to calculate the inflation-led cost increase for at least 10 years while taking a health insurance cover and opt for a higher SI at the first instance of buying a health insurance policy.

Once you sign up for a small SI, to increase it at a later point, you will have to again undergo medical tests and it will have to be cleared by the underwriting team of the insurance company. At that stage, if you have any health complications, you may not get a higher SI.

The Claim Shield feature under Care Shield will help you save 5-7 per cent of the out-of-the-pocket expenses. However, note that most insurers today cover these costs even without a rider, unless it is a Covid-19 claim.

The last feature — No Claim Bonus Shield — is also not as great as the company claims it to be. Many insurers today allow doubling of SI if there are no claims on the policy, and also do not reduce the SI when a claim is filed irrespective of the value of the claim.

Examples here include Health Companion of Max Bupa and Lifeline of Royal Sundaram. For an SI of ₹10 lakh, a 35-year-old male will have to pay an annual premium of ₹7,004 for Care (excluding GST). If he buys Care Shield, too, the premium will increase to ₹8,265 — a 18 per cent higher outgo. This is expensive for the limited benefits the rider promises.

If you are looking for a higher NCB (doubling of SI in five no-claim years) and SI-restored benefit, you can go for Royal Sundaram’s Lifeline.

The premium is expensive but worth the features — the annual premium for a 35-year-old male for a ₹10-lakh SI comes to about ₹10,500.

Or if you want a larger cover of, say, ₹1 crore, you can consider the health policy of Max Bupa — buy it as a base policy of ₹5 lakh and a super top-up of ₹95 lakh.