One health insurance policy to fit all

Friday 02, January, 2009 MUMBAI: Non-life insurers will, in the near future, develop a standardised mediclaim policy to facilitate portability in health insurance . Besides having uniform coverage, the policy would have standardised benefits for ‘no claim bonus’. The general insurance council — an industry body representing non-life insurers — will meet in January to discuss the details, according to two industry officials. Health insurance portability, as defined by the regulator, aims to facilitate change of insurance provider without the insured losing out in terms of policy coverage. While policyholders can shift companies even now, the essence of portability is that an insured is able to carry his track record with him. In other words, if a health policy covers pre-existing ailments only after four years and a policyholder decides to shift to another company in the fourth year, he will get immediate coverage of pre-existing ailments and will not have to wait another four years. Another advantage is, if there is a no claim bonus for earlier years, it can be carried forward to the new policy. Today, some companies have a cumulative no claim bonus where the sum insured increases by 5% for every claim-free year, while some products do not have any bonus facility. According to Deepak Sood, MD & CEO of Future Generali Insurance portability exists only when there is a standardised product. This would mean that the product offered by one company has to be identical to the other, with service levels being the only differentiator. Speaking to ET, Shreeraj Deshpande, head — Health and Travel Insurance, Bajaj Allianz General Insurance, said while companies will have one standard product, they can have other non-portable schemes as well so that product development will continue to take place. However, they will have to define in their sales literature that a particular scheme is not portable. The bad news for employees is that group mediclaim policies are likely to be a part of non-portable products. This means that an employee covered under a group health policy will be treated as a new prospect when he goes to buy a policy after retirement. “Group policies differ greatly from individual covers. Many group policies are very wide in coverage, as they cover pre-existing ailments and do not carry out underwriting of individuals. Such policies cannot be portable with individual policies,” said Mr Deshpande. Some non-life companies feel the standardised product will need to have sub-limits in the form of maximum ceiling for items such as room rentals. According to them, such limits will ensure that the product does not lose money.

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