Despite innovations in products, don't overlook fine print attached; comparisons remain complex.
The year 2011 had plenty in store for health insurance customers. Health portability, introduced in the later half of the year, empowered choice between insurers. Even otherwise, lack of choice was not a complaint. Apart from general and standalone health insurers, life insurers also launched health plans and product innovation became the differentiating factor, especially for newer entrants like Bharti AXA Life insurance, IndiaFirst life Insurance and L&T General Insurance.
However, with the product innovations here to stay, one cannot overlook the fine print attached to these.
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Features: "There was not much novelty in basic health insurance products during the year but there was active interest in bringing innovation to a policy, like inclusion of lifelong renewal, critical illnesses coverage, top-ups and so on." says Antony Jacob, CEO, Apollo Munich Insurance.
However, with more features, premiums got higher, outside the range of most. For instance, L&T General Insurance's 'Medisure Prime' offers 22 features, including benefits similar to cashless hospitalisation, personal accident cover and critical illness benefit policies. However, while it charges Rs 10,174 for a sum insured of Rs 5 lakh for a 30-year male based in Mumbai, a basic Mediclaim from Apollo Munich for the same would cost Rs 5,908.
Parental cover: As costs related to employee health policies went up, employees were expected to chip in for group policies that include parents. Some employers tied up for special policies for the employee's parents. The benefits are similar to what group policies offer, such as no waiting period, plus coverage for pre-existing diseases, but the premium is high. So, a policy for a sum assured of Rs 1 lakh can set you back by Rs 12,000-15,000 for parents aged 60 years. Bajaj Allianz General Insurance says you would have to pay Rs 5,130 for the same cover under its Individual Health Guard policy.
Diseases covered: Select insurers widened the coverage of ailments and lines of treatment, including dental, maternity and vision care treatments, otherwise excluded. Another focus area was the increased number of ailments and critical illness (CI) covered.
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However, Pankaaj Maalde, head-financial planning, Apnapaisa.com, feels customers need to be aware of the difference between an ailment and a critical illness. There are not more than 13 critical illnesses but CIs can result in loss of income, which impacts customers. So, one must choose plans that cover a higher number of CIs, rather than ailments, is his advice. "Not only should CI (cover) be bought as an add-on to a basic mediclaim policy, but it should be in the range of 33 to 50 per cent of one's life insurance need. So, suppose your life insurance need is Rs 60 lakh, the CI should be between Rs 20 to 30 lakh," adds Maalde. At present, the maximum cover available is only Rs 50 lakh.
Also plans with higher disease coverage could have clauses that may not always work in the customer's favour. For instance, Bharti AXA Life's Triple Health Plan covers 13 CIs and allows three claims under the same policy. Yet, it has classified the list of illnesses into three groups and a claim can only be made for one illness from each group. So, if the customer has already made a claim for a heart attack which belongs to group A, he will not be covered for a coronary artery bypass or heart transplant that fall in the same category.
Top-ups: Though top-ups were not really a new introduction, the number of companies offering it went up. For instance, Apollo Munich offered Optima Plus, under which the top-up plan can be converted into a regular cover at age 58, when the employee would retire.
While this is a good interim solution for those who cannot stretch their medical cover beyond that offered by the employer, it may end in restricting oneself to just one insurer. Portability guidelines do allow one to shift to another insurer, but the application will be subject to the insurer's underwriting norms. Even if the application is not rejected, the higher the age, the higher the premiums charged and the number of exclusions.
Wellness products: Another area of interest for insurers has been health-related risk mitigation. "Going beyond health insurance, a significant minority of employers are investing in wellness programmes around employee health as a pre-emptive measure. Similarly, insurers are also providing wellness incentives for retail insurance plans to encourage healthy behaviour," says Arvind Laddha, CEO, Vantage Insurance Brokers.
For instance, Tata AIG Wellsurance offers a free health helpline and personalised health tracker on its website, discounts at spas, weight management centres and so on.