Arogya Sanjeevani Policy – Standard Individual Health Insurance Product


The insurance regulator i.e IRDAI has provided a New Year gift to the general public by paving the way for introduction of Standard Individual Health Insurance Product which will be known as Arogya Sanjeevani Policy. This product will be issued by all the non-life insurers as well as the Stand Alone Health Insurers (SAHI) from 1st April 2020 onwards.

 

There are many health insurance products with varying coverages offered by the insurance company. Often it creates confusion in the public as the terms and conditions vary amongst products. As health insurance is one of the basic needs of the public, it was necessary to have a standard product which should have common coverage across the industry. With this point of view, Insurance Regulatory and Development Authority of India (IRDAI) released Guidelines on Standard Individual Health Insurance Product on 1st January, 2020 which providing the details of the coverages and exclusions of the afore mentioned product. All the non-life and SAHI are mandatorily required to offer this product with same coverages and exclusions. IRDAI in the guidelines mentioned the below objectives in relation to the introduction of this standard product:

  • Insurance policy to take care of basic health needs of insuring public.
  • To have a standard product with common policy wordings across the industry.
  • To facilitate seamless portability among insurers.

This means every insurance company (general and health) will offer this product with same policy wordings as stipulated in this guideline without any modifications in coverages and exclusions. The insurance companies are free to price the product. However, Insurer can determine the price but the premium for this product shall be PAN India basis and no geographical location/ zone-based pricing is allowed. Let’s understand this with an example. Suppose, a person living in Mumbai buys this product from XYX Insurance company with Sum Insured of INR 5,00,000 and pays some premium say, INR 15,000. Other person residing in town, say Agra buys the product form the same company i.e XYZ Insurance with Sum Insured of INR 5,00,000 and he will also pay INR 15,000. The premium will be same for the same Sum Insured (INR 5,00,000 in the example) from the same insurance company (XYZ Insurance in the example) irrespective of the geographical area.

Unique Features of the Product

  • Obesity treatment covered.
  • All Day Care Treatment/Procedures are covered. Day Care Treatment means treatment or surgery where hospitalization required is less than 24 hours. Generally, there are list of day care procedures in health insurance policy which varies from company to company. Some company provides 140 day care treatments, some provide 200, 400, 500 or more. This product covers all day care treatment.
  • Dental Treatment, Plastic surgery necessitated due to disease or injury are covered. Generally, dental treatment and plastic surgery are covered only if necessitated due to accident/injury, but this product provide coverage due to disease as well.
  • Some of the procedures like Stem cell therapy, Robotics surgeries which are generally excluded from the health insurance products are covered in this product. The coverage for such procedures is restricted to 50% of the Sum Insured. The list of such procedures are mentioned in the Benefict Schedule of this article.

Features of the Product

  • The nomenclature of the Product shall be Arogya Sanjeevani Policy, succeeded by name of the insurance company, (Arogya Sanjeevani Policy, <name of the insurer>. No other name is allowed.
  • No Add-ons or optional covers are allowed to be offered along with the standard product. It shall not be combined with Critical Illness covers or Benefit Based Covers.
  • The product shall be offered on indemnity basis only.
  • Every General and Stand Alone Health Insurer are mandatorily required to offer this standard individual health insurance product.
  • The Policy tenure of the standard product shall be for a period of one year with lifelong renewability.
  • Minimum Sum Insured shall be INR 1 Lakh and Maximum Sum Insured shall be INR 5 Lakhs (in the multiples of 50,000).
  • Pricing: Insurer can determine the price but the premium for this product shall be PAN India basis and no geographical location/ zone based pricing is allowed.
  • The product can be offered on Individual or Family Floater basis.
  • Premium payment can be made on Yearly, Half-yealy, quarterly or monthly basis. ECS(Auto Debit facility) is also allowed.
  • 30 days Grace Period for Yearly premium payment and 15 days Grace Period for other mode of premium payment.
  • Minimum and Maximum entry age is 18 years and 65 years respectively for adults. Dependent children can be covered from the age of 3 months to 25 years.
  • Co-payment: Fixed Co-payment of 5% shall be applicable across all ages for all claims.
  • No Deductibles are permitted in this product.
  • Sub-Limit on Cataract: Cataract expenses shall be covered up to 25% of Sum Insured or INR 40,000 whichever is lower.
  • Dental Treatment, Plastic surgery necessitated due to disease or injury are covered.
  • Cumulative Bonus: 5% of SI for each Claim Free Year max up to 50%.
  • Moratorium Period: After completion of 8 continuous years under the policy, no look back would be applied. This period of eight years is called moratorium period. After the expiry of Moratorium Period, no claim under the policy shall be contestable except for proven fraud and permanent exclusions specified in the policy.
  • The standard product may be offered as Micro Insurance Product subject to the provisions of IRDAI (Micro Insurance) Regulations 2015.

The detail coverage’s are provided in the below benefit schedule.

Benefits Description
Hospitalization Expenses Expenses of Hospitalization for a minimum period of 24 consecutive hours. 24 hours time limit is not applicable if treatment is undergone in a Day Care Centre.

Other Expenses:

·         Dental Treatment, necessitated due to disease or injury

·         Plastic Surgery, necessitated due to disease or injury

·         All Day Care treatments

Sub Limit for room/doctors fee ·         Room, Boarding, Nursing expenses covered up to 2% of Sum Insured subject to maximum of INR 5000 pet day.

·        ICU/ICCU expenses up to 5% of Sum Insured subject to maximum of INR 10,000 per day.

Pre-Hospitalization For 30 Days prior to the date of hospitalization
Post-Hospitalization For 60 Days from the date of discharge from the hospital.
Coverage for Specific Procedures Following procedures will be covered either as in patient or day care treatment in a hospital up to 50% of Sum Insured:

·         Uterine Artery Embolization and HIFU (High Intensity focused ultrasound

·         Balloon Sinuplasty

·         Deep Brain Stimulation

·         Oral Chemotherapy

·         Immunotherapy – Monoclonal Antibody to be given as injection

·         Intra vitreal injections

·         Robotic Surgeries

·         Stereotactic radio surgeries

·         Bronchical Thermoplasty

·         Vaporisation of the prostate (Green Laser treatment or holmium laser treatment)

·         IONM – Intra Operative Neuro Monitoring

·         Stem Cell Therapy: Hematopoietic stem cells for bone marrow transplant for haematological conditions to be covered.

Road Ambulance Road Ambulance expenses up to INR 2000 per hospitalization
AYUSH Treatment Expenses incurred for inpatient Care treatment under Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy systems of medicines shall be covered up to sum insured, during each policy year as specified in the policy schedule.
Cataract Treatment Covered up to 25% of Sum Insured or INR 40,000 whichever is lower, per eye, under one policy year
Pre Existing Diseases (PED) PEDs declared in the Proposal Form shall be covered after Waiting Period of 4 years.
Obesity Cover Treatment of obesity are covered if all the below conditions are met:

1.       Surgery to be conducted is upon the advice of the doctor

2.       The surgery/procedure conducted should be supported by clinical protocols

3.       The members has to be 18 years of age or older and

4.       Body Mass Index (BMI);

a)       Greater than or equal to 40 or

b)      Greater than equal to 35 in conjunction with any of the following severe co-morbidities following failure of less invasive methods of weight loss;

i)                    Obesity related cardiomyopathy

ii)                   Coronary heart disease

iii)                 Severe Sleep Apnea

iv)                 Uncontrolled Type 2 Diabetes

Cumulative Bonus 5% of Basic Sum Insured for each Claim Free Year subject to a maximum of 50% of Sum Insured. In the event of Claim, the Cumulative Bonus shall be reduced at the same rate.
Co-Payment 5% Co-Payment on all claims.

Waiting Period

Waiting Period means that the listed risks will be covered after some duration from the commencement of the policy. The waiting period for the proposed Standard Individual Health Insurance Product are mentioned below:

  • Treatment of any illness within 30 days from the first policy commencement except claims arising due to accident.
  • 24 Months Waiting Period: Following specified disease are covered after 24 months waiting period.
    1.       Benign ENT Disorder 11. Gout and Rheumatism
    2.       Tonsillectomy 12. Hernia of all types
    3.       Adenoidectomy 13. Hydrocele
    4.       Mastoidectomy 14. Non Infective Arthritis
    5.       Tympanoplasty 15. Piles, Fissures and Fistula in anus
    6.       Hysterectomy 16. Pilonidal sinus, Sinusitis and related disorders
    7.       All internal and external benign tumours, cysts, polyps of any kind, including benign breast lumps 17. Prolapse inter Vertebral Disc and Spinal diseases unless arising from accident
    8.       Benign Prostate hypertrophy 18. Calculi in urinary system, Gall Bladder and Bile Duct, excluding malignancy
    9.       Cataract and age related eye ailments 19. Varicose Veins and Varicose Ulcers
    10.    Gastric/Duodenal Ulcer 20. Internal Congenita; Anomalies
  • 48 Months Waiting Period: Treatment for Joint replacement unless arising from accident and Age related osteoarthritis & Osteoporosis are covered after 48 Months waiting period.

Exclusions

Some of the exclusions of the Policy are as follows:

  • Treatment taken outside India.
  • Treatment for correction of eye sight due to refractive error less than 7.5 dioptres.
  • Sterlity and infertility
  • Maternity expenses
  • Expenses incurred on Domiciliary Hospitalization and OPD treatment.

Impact

This product is launched to increase the insurance penetration and insurance density of India and to make health insurance affordable to general public. As the policy wordings are standard and it won’t change form company to company, chance of confusion among the general public is minimal. It will also have competition among insurers in terms of pricing of the product i.e premium charged. Insurance company will have to provide best pricing for the listed coverages. The performance of this product can be assessed only after its launch but it is expected to have positive result in the insurance industry.

I hope this article will be useful for the readers and I have also attached the Guidelines on Standard Individual Health Insurance Product for your reference. 🙂

Guidelines on Standard Individual Health Insurance Product 2020

– Ashish Kumar

Insurance Terminologies – III


In this 3rd installment of Insurance Terminologies series, let’s look at couple of the jargons which comes across during health insurance purchase or claims.

  • Cumulative Bonus: Cumulative Bonus, as the name suggests, is an increase in the sum insured for the claim free year. This terminology is used in health insurance. This means if the customer has not made any claim for an year, there will be a percentage increase in sum insured which is generally 5% to 10% and can also range from 10% to 50% which varies from insurer to insurer. The maximum bonus given is 50%. One important thing to be noted is that the cumulative bonus is provided on the basic sum insured. For example, if the basic sum insured is INR 100000 and there is no claim made by the customer, the sum insured will be increased by 10% at the time of renewal and hence the new sum insured becomes INR 110000 for the next year. If no claim is reported again in the subsequent year, the cumulative bonus of 10% (10% of 100000=10000) will be provided and the total sum insured will become INR 120000 ( 110000+10000= 120000). As you can see cumulative bonus is calculated on basic sum insured which is INR 100000 in the given example and it is accumulated for every claim free year. The cumulative bonus is added to the sum insured of preceding year which becomes the new sum insured for subsequent year (110000+10000= 120000).
  • Waiting period: Waiting period is the duration for which the coverage is not provided. Health insurance policies have waiting period of 30-60 days. This means any claim made during this period is not payable even though if the loss occurred due to the risks covered in the policy. Any claim made post waiting period is payable provided the loss would have occurred due to the perils covered in the policy. One important point to be noted is that for pre-existing disease, waiting period is 48 months (4 years). Pre-existing diseases are covered after 4 years from the inception of the policy.

Ashish Kumar

Insurance industry in India


 

Insurance is a part of financial services apart from banking, capital market, money market etc. Insurance is considered as a protection from events which results into financial loss. The insurance industry in India comprises of life insurance, general insurance, stand alone health insurance and reinsurance. The Indian insurance industry is guided by Insurance Act, 1938 which was amended from time to time, the latest amendment happened in 2015.

This post briefly gives an overview of insurance sector in India particularly discussing about the regulator, life insurance, general insurance, stand alone health insurance and reinsurance. The life insurance comprises of around 79% of the market, the rest 21% is occupied by general insurance. Of the general insurance, motor insurance has the highest market share of 44% followed by health insurance having market share of 29%, as per IRDAI Annual Report 2015-16. It is worth to mention that the insurance industry in India has showed a significant growth after it got opened for private sector in the year 2000. Since then, the industry is growing rapidly. In 2015, the reinsurance sector was allowed for foreign players which were solely dominated by General Insurance Corporation of India (GIC Re).  A small discussion about regulator, life insurance, stand alone health insurance and reinsurance is mentioned below.

Regulator:  Indian insurance industry is regulated by Insurance Regulatory and Development Authority of India (IRDAI) which was formed by an Act of Parliament in 1999. The Insurance Regulatory and Development Authority (IRDA) Act was passed in 1999 leading to the formation of IRDAI. IRDAI is headquartered in Hyderabad and has offices in New Delhi and Mumbai. The regulator is responsible for carrying various activities like granting license to insurance companies, framing regulations which the insurers need to follow, protecting policyholder’s interest etc. Breach of IRDAI regulations can have serious implications resulting from penalty to cancellation of license of the insurance company.

Life Insurance: At present, there are 24 life insurers in India, of which, Life Insurance Corporation of India (LIC) is wholly owned by the Government of India. LIC was formed in September 1956 by an Act of Parliament known as LIC Act, 1956.  Some of the private life insurers include ICICI Prudential Life Insurance, HDFC Standard Life Insurance, SBI Life Insurance etc.

General Insurance: Non-life or general insurance comprises of all kinds of insurance except life. It has various segments comprising of motor insurance, health insurance, fire insurance, marine insurance, engineering insurance, aviation insurance, satellite insurance etc. There are 33 non-life insurers operating in India consisting of public and private insurers. The public insurers include the following:

  • The New India Assurance Co Ltd. (NIACL), headquartered at Mumbai.
  • National Insurance Co Ltd. (NICL), headquartered at Kolkata.
  • Oriental Insurance Co Ltd (OIICL), headquartered at New Delhi.
  • United India Insurance Co Ltd (UIICL), headquartered at Chennai.
  • Export Credit Guarantee Corporation of India (ECGC)
  • Agriculture Insurance Company of India (AIC)

ECGC and AIC are known as specialized insurers. Apart from above mentioned public sector companies, some of the private non-life insurers include ICICI Lombard, HDFC Ergo General Insurance, SBI General Insurance, IFFCO Tokio General Insurance, Tata AIG General Insurance etc.

Standalone Health Insurance: These are those companies which are solely carrying their business on health insurance. There are six stand alone health insurers like Apollo Munich Health Insurance, Star and Allied Health Insurance, Max Bupa Health Insurance, Cigna TTK Health Insurance, Religare Health Insurance and Aditya Birla Health Insurance. One of the ways to recognize the stand alone health insurers is that the stand alone health insurers will have the word “health insurance” in the name of the company as in the above mentioned six stand alone health insurers.

Reinsurance: General Insurance Corporation of India (GIC Re) is owned by the Government of India and is the national reinsurer which is headquartered at Mumbai. The reinsurance industry in India is now opened for foreign players to open their branch offices in after the Insurance Act, 1938 was amended in 2015. At present there are 9 foreign reinsurers who have opened their branch offices in India. They are mentioned below:

  • Swiss Re
  • Munich Re
  • Llyod’s India
  • Reinsurance Group f America (RGA)
  • Hannover Re
  • SCOR
  • XL Insurance Company
  • Axa France Vie
  • General Reinsurance AG

It is important to note that apart from GIC Re and the above mentioned foreign reinsurers, ITI Re is the first private Indian reinsurance company which got licensed by IRDAI. Hence the Indian reinsurers include GIC Re and ITI Re.

 

Apart from the above players, the insurance industry also comprises of various intermediaries and distribution channels like agents, brokers, Insurance Marketing Firms (IMF), Web Aggregators etc. which I will discuss in separate post.

One thing to be noted is that the insurers in India can take part in either life insurance or general insurance business and not both. This means that a life insurer cannot start their business of motor insurance, fire insurance etc and vice versa. Health insurance is the only insurance product which can be offered by both non-life and life insurers. Non-life insurers can sell separate health insurance policy while life insurers offer health insurance in the form of riders. Riders are the extra benefits which are covered by paying some extra premium. Example of riders include Accidental Death Benefit (ADB) rider, critical illness rider etc. Life  insurers cannot offer separate health insurance products.

– Ashish Kumar