End of confusion! New guidelines from IRDAI standardise health insurance ‘mediclaim’ product; 4 things you must know
23 Feb 2019
A Standard Health Plan will help consumers better understand the product and make it easier for them to compare the product with other insurers.
As per the draft issued on the IRDAI website, the Standard Health Product will cover both pre and post hospitalisation expenses.
As an ode to the common man, the Insurance Regulatory and Development Authority of India (IRDAI) on Tuesday issued draft guidelines for a plain vanilla Standard Health Insurance Product common to all non-life insurance companies – both general and health. The regulator through its latest development is not only moving towards standardising the policy exclusions, but even aims at creating a standard product in order to minimise the confusion among the masses.
As per the draft issued on the IRDAI website, the Standard Health Product will cover both pre and post hospitalisation expenses and the consumers will also have the option of taking treatment under the AYUSH scheme, subject to sub-limits. Wellness Incentives and Cumulative Bonus are some of the other popular features of the recently-drafted Standard Health Product. According to the issued guidelines, the product will even insure plastic surgery needed due to a serious accident. However, it will be subject to a co-payment clause. Currently, IRDAI has mandated that 5% of co-pay shall form a part of the policy feature, meaning, the policyholder will be liable to pay 5% of the total claim amount. For instance, for a claim amounting to Rs 3 lakh, you will have to pay Rs 15,000, while your insurer will pay the remaining Rs 2.85 lakh.
Treatments and Sum Insured
Further, the policyholders will also be entitled for regular day-care procedures wherein the treatment doesn’t require hospitalisation and the patient is discharged the very same day. As per the industry experts, the proposed move will make the product standard across all insurers that will indirectly help in portability too. While the minimum sum insured in the standard policy will be Rs 50,000, the maximum limit will be Rs 10 lakh. A No-claim bonus of 5% of the total sum insured can be availed by the policyholders up to a maximum of 50% provided no claim is made within the policy term.
Talking about the pricing of the product, as per the draft issued by IRDAI, insurers are allowed to follow differential pricing under which insurers are allowed to charge a lower premium from an old customer compared to a new customer regardless of their age. As per the new policy, the earlier you buy the health cover the better will be the pricing for you. Moreover, as a policy seeker you now have the prerogative of paying the premiums not just annually but in smaller instalments as well, i.e. monthly, quarterly and half-yearly.
No Add-ons and Riders
Yet another important guideline issued under the draft is that the proposed plan will entirely remain a basic insurance product wherein the customers will not be allowed to enhance the plan with any add-ons or riders. Doing this will not only cut out confusion among the consumers regarding individual features, but will also help them decide when to port the policy. A Standard Health Plan will help consumers better understand the product and make it easier for them to compare the product with other insurers.
(Disclaimer: These are the author’s views. Readers are advised to consult their financial advisor before buying any plan)