Big change in Standard Individual Health Insurance: Buy Arogya Sanjeevani Policy for above Rs 5 lakh cover

Arogya Sanjeevani Policy: When Arogya Sanjeevani was launched lower Sum Insured was one of the major concerns for the buyer.

Standard Health Insurance policy: The IRDAI has modified the guidelines on Standard Individual Health Insurance Product called Arogya Sanjeevani Policy for the benefit of policyholders. Earlier, the maximum sum insured was capped at Rs 5 lakh while now it has been left to the insurers to offer a higher cover based on their underwriting policy.

In a recent circular, IRDAI states – “Whereas the standard policy is required to be offered by all General and Health insurers for sum insured between Rs.1 lakh and Rs.5 lakh, to further facilitate the general public, insurers are hereby allowed to offer a minimum sum insured less than Rs.1 lakh and the 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.

Amit Chhabra, Head-Health Insurance, Policybazaar.com, says, “This is a great move by the regulator because when Arogya Sanjeevani was launched lower Sum Insured was one of the major concerns for the customer. The other two being Co-payment & Room rent capping. Considering the medical inflation, health Insurance with the minimum sum insured of Rs 10 Lakh per person is advisable. However, there is no upper limit specified for the Sum Insured so insurers can innovate up to a great extent. This move can be considered as a game-changer as it will help increase the health insurance penetration in India.”

In order to make buying of health insurance policies simpler, in January 2020, the IRDAI had made it mandatory for all standalone health insurance companies and general insurance companies to offer a standard health product to the policyholders. Such a standard health policy is to be called Arogya Sanjeevani Policy. As the features of Arogya Sanjeevani Policy are going to largely similar, buyers will stand to benefit by avoiding to make a comparison of health insurance plans. The choice will largely depend on the premium and the level of comfort that the buyer has regarding the insurance company.