In order to expand the horizon of the standard health insurance policy that every general insurer and health insurer has been mandated to offer under the Arogya Sanjeevani scheme, the insurance regulator has offered greater flexibility to insurers on the sum assured they can offer to policyholders.
The regulator has now said that insurers can offer a sum insured of less than Rs 1 lakh, while the maximum can exceed Rs 5 lakh. The guidelines that the regulator had issued in January for the standard health product had set the minimum sum insured under the product at Rs 1 lakh and capped it at Rs 5 lakh.
“To further facilitate the general public, insurers are hereby allowed to offer a minimum sum insured of less than Rs 1 lakh and maximum sum insured greater than Rs 5 lakh, subject to the underwriting policy of the insurers. The sum insured options shall be offered in the multiples of Rs 50,000 only,” the insurance regulator said.
“The more options customers have to choose from, the better it is for them to opt for a cover that suits their requirement. This move will allow insurers to offer a wider range of sum insured starting from Rs 50,000 and not limited it to Rs 5 lakh on the higher side. Moreover, since it is ‘use and file’, it will help implement this change sooner,” said Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance.
“When the product was launched, one of the problems was the capping of maximum sum insured at Rs 5 lakh. And, this was the feedback we were getting about the product,” said Amit Chhabra, Business Head–Health, Policybazaar.com.
There are broadly three types of feedback that we have got from customers of Arogya Sanjeevani: one was the sum insured, which has now been addressed, the second one is the mandatory 5 per cent co-payment, which is something many customers do not like and third is the room rent capping, he said.
While the product was intended to penetrate the uninsured section of the society, the response to it has not been very encouraging so far.
“The revised sum insured limits for the standard health insurance policy will help in attracting several new customer segments. It is also in line with the intent of making Arogya Sanjeevani available to a large section of the population, thereby increasing insurance penetration in the country. It is seen that since the healthcare costs are lower in smaller towns, people in these areas can avail the policy at the lower sum insured limits,” said Subrata Mondal, Executive Vice President, IFFCO-Tokio General Insurance.
While the regulator has allowed insurers to offer a sum insured exceeding Rs 5 lakh, it has not put a cap on the maximum sum assured the insurers can offer under this product, leaving it to them to decide.
Sanjay Datta, Chief–Underwriting & Claims, ICICI Lombard General Insurance said, “It will depend on the insurance companies on the maximum sum insured they want to offer for this product. Insurers also have their own products, so we have to see how it complements our own product and where do we position the standard product along with our own products.
The standard Individual health product or Arogya Sanjeevani is an indemnity based health product mandated by the insurance regulator to be offered by all general and health insurance companies to take care of the basic health needs of the insureds with common policy wordings across the industry. No add ons or optional covers are allowed with the product.
Despite being a standard product, the insurer are free to price it according to their risk assessment. The regulator had asked the insurers to offer this product by April 1, 2020.