The good news for AIDS (Acquired Immune Deficiency Syndrome) patients could end up just being that — a feel-good news item.
The Insurance Regulatory and Development Authority (Irda) has recently asked insurers to offer policies for AIDS patients. The insurers have been given a month to respond. However, experts say they are unsure how a comprehensive policy can be provided to such patients.
For one, there will be a lot of risk to be underwritten, as the cost of treatment in India is very high — the reason why insurers stayed away from these policies till now and listed the disease under the list of permanent exclusions. There is just one special policy, from Star Health Insurance — Star Netplus — that covers HIV-positive patients.
| INSURERS WORRIED ABOUT |
INSURERS WILLING TO |
- Cover people whose are under the threat of contracting HIV
- Help through tie-ups and group policies
Star Netplus pays a lump sum once the insured is tested positive. No bills or receipts are required. There is no age limit for applicants, either. This policy provides cover for Rs 30,000 and Rs 50,000 at a yearly premium of Rs 2,500 and Rs 4,000, respectively. In comparison, Star Health's health insurance policy, Medi Classic, charges Rs 2,680 for a cover of Rs 2 lakh (age: five months to 35 years) and Bajaj Allianz General Insurance charges Rs 3,283 for a Rs 2-lakh cover (age - 26-46 years). Obviously, the cover for a standalone AIDS policy is at least five times less for the same premium.
Going forward, things may not really change. "This is how the new covers are also likely to be priced. We may not see a very high sum insured for HIV positive policyholders," says Deepak Yohanan of Myinsuranceclub.com. Globally, too, insurers follow a similar model, said many experts.
There are two ways of covering AIDS. One, this cover can be added to existing policies. Here, the premium will be revised to incorporate the cost of this benefit. "At the very least, the premium could move up by 25 per cent, as business interests also need to be taken care of," said Amarnath Ananthanarayanan, CEO of Bharti AXA General Insurance. And, if the cover is extended to non-hospitalisation and related costs, the premium could be revised even higher, as the drugs are very expensive.
Second, the regulator says, "Provide a lump sum — to the individual on becoming HIV-positive — as a rider (treating it as critical illness)." Here, you pay extra on the base life insurance policy. Again, coverage for AIDS will push up the premium further.
Third, insurers could create a standalone policy that will cover AIDS. Though planning for the product hasn't started yet, they say this will be a very costly option and premiums may be raised five times, as opposed to a health insurance plan.
What makes insurers unsure about the product is that Irda wants them to cover patients — in stage-I and -II — who have already contracted the disease. "It makes sense to issue a policy to someone who is under threat than to those already infected," said a broker. For instance, a child whose parents or one parent had this disease may contract it.
The problems may escalate in case a policyholder who bought it online seeks to add AIDS as a rider . The insurer, in that circumstance, would be in a bind on whether to extend it, as the client may have contracted the disease, said insurers.
The solution, most feel, will come from group policies. For instance, Star Health covers AIDS in association with non-government organisations (NGOs). In this case, the NGO is the policy proposer and only the beneficiaries of the proposer are covered. The benefits, when payable, will be paid to the proposer, for the advantage, in turn, of the respective covered persons.
