Health insurance biz to touch Rs 35,000 crore by 2014-15

Rising middle-class incomes, inflationary pressure on healthcare costs and the popularity of state-sponsored healthcare schemes will help the health insurance business in India touch the Rs 35,000 crore mark by 2014-15, says the ‘India 2011 – Insurance Industry Report’ released by India Insure Risk Management and Brokerage Services.

The health insurance business has been growing at a steady pace over the past few years and accounted for 25 per cent of the overall business of the general insurance companies in 2010-11, against 23 per cent in 2009-10 and 20 per cent in 2008-09, retaining its second position after motor insurance. The sector earned a net premium of Rs 8,528 crore in 2010-11, against Rs 6,241 crore in the previous financial year.

According to the report, health insurance has been the fastest growing market segment registering a compounded annual growth rate (CAGR) of 32 per cent for the past six years. The growth drivers include an ageing population, increasing healthcare costs, improving per capita income and awareness and increasing employer-sponsored health insurance cover.

“Increased coverage under government schemes like Rashtriya Swasthya Bima Yojana (RSBY), innovative products to reach the rural sector, reduction in premiums and switching from hospitalization cover to health managed programmes under insurance, will all result in the health insurance sector growing to about Rs 35,000 crore by the year 2014-15,” the report says.

According to the report, the healthcare spend in the country is expected to double and touch Rs 2,25,000 crore by 2014 and with just 3 per cent health insurance penetration in the country, there is a huge market for health insurance in India.

The attitude of the Indian middle class towards the need for health insurance is also changing with factors like increase in lifestyle diseases, apart from rise in healthcare costs.

The report also questions why the industry focused only on hospitalization, which was only 20-25 per cent of an individual’s healthcare, spend, ignoring 75 per cent of the market. The insurance industry could also do well to develop new and innovative products in segments, such as micro-insurance health products and ‘health plus life’ products that provide life cover, along with health insurance to subscribers.

Max Bupa aims to breakeven by 2015

Max Bupa Health Insurance, one of the hottest players in the health care insurance business in India, hopes to reach a break-even in operations by 2015. The company, which started operations in mid-2010, is 76:24 joint ventures between Analjit Singh promoted-Max India and UK-based BUPA.

The chief financial officer of the company Neeraj Basur said, Max Bupa Health Insurance has an equity assurance of Rs 700 crore from the joint venture partners, of which, over Rs 300 crore has been infused so far. “We hope to break even in the 5^th year of operations as we had targeted,”

Being one of the most recent players in the business, Max Bupa has been trying to decide itself from other players by present unique products and special services. For instance, the company was the first to offer health insurance products with a sum insured of over Rs 15, 00,000, after which many other companies jumped into the fray, according to Basur.

In an industry where the average size of sum insured in health insurance covers is Rs 2, 00,000, Max Bupa offers health insurance products with covers ranging from Rs 15, 00,000-50, 00,000.

“We have a decent number of customers who have taken our Rs 50, 00,000 products. It depends on the customer needs. There is certainly a segment that sees value in these kinds of products. Those customers who want to ensure there are no hassles or running around when there is a health problem and if they can afford to pay that kind of premium, they go for it,” Basur observes.

Also, with the increasing medical costs and inflation driving prices up, people find it essential to move to policies with higher sum insured to ensure that they have enough coverage in the next ten years, he says.

Being a pure play health insurance player, Max Bupa has no insurance intermediaries or third party administrators, which makes the claims settlement process easy for the customers. Also, unlike most players, who get a bulk of their business from group health insurance schemes, the individual, retail customers are the focus for Max Bupa.

The company, which clocked a new business premium of Rs 46 crore for the first half of this financial year, hopes to complete its first full year on a strong note. “We have already crossed the 100,000 mark in customer base, which is pretty good for a 14 month old company. We hope to close this financial year with a total premium of Rs 70 crore,” Basur said.

Save Non life insurance Govt companies-Govt to disinvest

There is news that Indian government is in consultation to sell stakes in major Non life insurance companies. These are New India Assurance, National Insurance, oriental and United India. Is this move done to get more cash for government or it wants to modernize these players.

In Non life segment- the two major categories come are -
1. Health Insurance
2. Motor Insurance

With these companies who have large market share - it will certainly change the industry.
For customers - what this can do.

These companies are considered honest in terms of claims but to get claim in these companies is a very tedious work.

With selling the stake- may be new teams will get appointed who will look after the concerns in delay of claims etc.

The other motive behind this govt move can be to insure these companies do not get into large losses and with public participation in capital, they make find there way to profitability.
To comply with norms all these companies will have to have independent directors which will help in restructing.

Claim tax benefits for your medical expenses

It is rightly said that “health is wealth”. To ensure good health of ourselves and our families, medical costs are usually on the higher side, which may include medical insurance premium, medicines and hospitalisation costs, among other things. There is, however, some relief from taxes for such expenses.

Medical insurance: In times of rising medical costs, it is wise to invest in medical insurance for yourself and your family. By doing so, one not only ensures medical cover for oneself and the family during a medical emergency, but also gets relief from tax benefits associated with the expenses.

As per Section 80D of the Income Tax (I-T) Act,1961, a deduction can be claimed by an individual for the premium paid towards medical insurance or any contribution made to the Central Government Health Scheme. The deduction can be claimed up to Rs 15,000 per annum or the amount paid, whichever is lower. Here, family would mean spouse and dependent children of the individual.

In addition to the above, an individual can also claim deduction for the medical insurance premium paid up to Rs 15,000 per annum for parent(s) or the amount of premium paid, whichever is lower. Further, these deductions are increased up to Rs 20,000 per annum in case the premium is paid for a senior citizen (65 years old or more).

For example, if a person buys health insurance for himself and his parents, who are senior citizens, then the total premium that can be deducted from his taxable income will be Rs 35,000 per annum (Rs 15,000 for self plus Rs. 20,000 for parents).

It is imperative to note that for claiming an exemption under Section 80D, the payment for the same should be made by any mode other than cash. In addition, only medical premium paid under the medical insurance scheme of General Insurance Corporation, approved by the central government, or any other insurer, approved by the Insurance Regulatory and Development Authority (Irda) shall be eligible for the tax benefits specified above.

Reimbursement of medical expenses of employees: Reimbursement of expenditure actually incurred by the employee for his or his family member on medical treatment (domiciliary medical expenses) is exempt for up to Rs 15,000 per annum. Any reimbursement that is above the said limit would be liable to tax as income in the hands of the employee. Family for this purpose includes spouse, children, parents, brothers and sisters of the individual or any of them wholly or mainly dependent on the individual.

Generally, the employers insist on submission of original medical bills by the employee before making the said reimbursement prior to providing an exemption.

Dependent with a disability: In case an individual has incurred any expenditure on a dependent with a disability, then he would be allowed maximum deduction of Rs. 50,000 per annum or Rs 1,00,000 per annum, depending on the severity of the disability of the dependant under Section 80DD of the I-T Act. The expenditure could be on account of the medical treatment (including nursing), training and rehabilitation or an amount paid/deposited under any scheme framed in this behalf by the Life Insurance Corporation of India (LIC) or any other insurer for maintenance of the dependent.

Few specified diseases: An individual can claim a deduction up to Rs 40,000 per annum (Rs 60,000 in case of senior citizens) under Section 80DDB of the I-T Act for expenses incurred on treatment of certain prescribed diseases or ailments, such as malignant cancers and AIDS, among others, subject to fulfillment of conditions prescribed under the I-T Act.

Therefore, it can be said that while medical costs have increased substantially, the silver lining is that one may claim tax deductions available for these expenses.

Get the right health insurance cover under portability

Until portability was allowed for health insurance, customers were wary of shifting to a new insurer, even if they were unsatisfied with the existing one. The fear was the loss of accumulated loyalty benefits or having to begin the waiting period for existing diseases afresh. But now, with the option of health portability in place, they can right their wrongs. However, it would be wise to keep a few factors in mind before shifting to another insurer.

“Customers can only take the policy in totality. So it’s important to understand the benefits offered under the existing health policy and to match those with the plan one wishes to port to,” says Apollo Munich Health Insurance CEO Antony Jacob.

Those planning to port their services should look for an insurer with a good track record in claim settlements and a large network of hospitals. Besides these, there also are other conditions that should be looked up to avoid being in a spot when making a claim.

WHAT TO LOOK FOR IN A NEW INSURER

Claim-settlement record and network of hospitals for cashless facility Lifelong renewals. Insurers cannot refuse renewals to aged customers Additional premiums, co-pay and sub-limits Incentives for prudent usage of policy Flexibility to increase cover with age Wellness support facilities

Additional loading: Typically, if you have a hospital cash cover, you can opt only for a similar cover with another insurer. Going by the apples to apples logic, there may not be a wider scope for added premiums or loads on renewals.

But insurers say every portability request is considered as a new application. So, if a customer is considered a high-risk person under an insurers’ underwriting norms, he may be asked to pay a higher premium or extra loading. In such cases, unless the insurer is offering a better cover, you should not port your services in haste.

Co-pay and sub-limits: Companies often ask customers to share the risk burden, and levy conditions like co-pay or sub-limits on treatments. Under co-pay, a customer pays a percentage of the total cost, while under sub-limits, he pays anything above the pre-decided cost limit for treatment. For instance, Bajaj Allianz General Insurance levies the co-pay structure, if the customer goes to a non-network hospital.

Customers could look at insurers that reward customers for prudent usage of the cover. So, for instance, Apollo Munich encourages shared accommodation or hospitalisation under its ‘Easy Health’ policy. As an incentive, depending on the slab applicable, it offers Rs 300-500 per day hospital cash to policy holders.

“The cash perks attached to them mean lower price on the product in the long run,” adds Jacob.

Renewals: While insurers have been following 70 years as the average age after which they refuse covers to individuals, customers should now insist on lifelong policy renewals.

“There is no official regulation from the Insurance Regulatory Development Authority (Irda) on the age limit and insurers have been told that they cannot refuse health policy renewals. This, in effect, makes lifelong renewals a must,” says Suresh Sugathan, head (health administration team), Bajaj Allianz General Insurance.

Increase in cover with age: Given the rise in medical inflation, your current cover may be insufficient at a higher age. While you may plan to bridge the gap by buying a new policy, companies are sceptical about covering those in the higher age bracket, as medical risks rise significantly with age.

“Customers should, instead, approach their existing insurers, as they are much more open to upgrades from own customers, subject to the necessary medical tests,” adds Sugathan.

Doing this will also help a customer skip the waiting periods applicable on new policies.

Wellness support: A number of companies now offer wellness support to their customers through helpline set-ups for health tips, medical camps and newsletters. These are value additions and part of awareness campaigns insurers undertake.

But, experts warn, one should take into account the kind of support offered, since the costs involved are met by insurers in premiums. “How many people would really follow the advice dispensed by a doctor on the other side of the phone helpline,” asks an official.

It would be better to see if the new insurer has tied up with hospitals and offers discounted rates for out-patient procedures not covered in the basic policy.

All you need to know about health insurance portability

Now, policyholders, who are dissatisfied with their current health insurers, have the freedom of switching to other insurers who offer a better deal without losing the continuity benefits. But before switching the health insurers, know the fine prints.

Firstly, when a customer shifts to a new insurer, he will have to undergo all underwriting procedures just like a new policyholder. The loading for porting will be decided only after the completion of medical risk assessment.

Bajaj Allianz General Insurance, head-underwriting, TA Ramalingam says, “The new insurer has the right to reject your policy based on its underwriting guidelines, which may differ from your existing insurer. So customers need to be cautious before planning to switch.”

Why would anybody shift to a new insurer? Of course, to get a better deal compared to the existing health one. So, compare the sum insured available with the new insurer that you intend to shift.
It is always better to switch the plans that are similar in nature. Otherwise, the policy will end up in opting either lower cover or higher cover.

The policy holder has to inform the new insurer about the time regarding the choice of switching. According to Irda guidelines, insurers need to be informed 45 days before renewing the existing policy. If the request for the portability is made after 45 days, the insurer may reject the request.

Waiting period for certain illness varies from insurer to insurer. Hence, it is important for the policy holders to check the time period for pre-existing diseases. Besides the specific exclusions, other terms and conditions need to be scrutinised well before shifting.

“Take a conscious decision on shifting. Service levels of the insurers would be the most important criteria while changing your insurer. People would like to shift to an insurer who has excellent service levels especially in claims settlement,” says Shreeraj Deshpande, head-health insurance, Future Generali India.

The earned bonuses so far with the existing insurer may change as per the new portability guidelines. Ensure that you get existing benefits and additional benefits while porting your health insurance policy.

It is advisable to compare the product constructs such as internal sub-limits and co-payments. Also the policy holder should be aware about the age band pricing and how people of higher ages are treated while porting.

“With the implementation of health insurance portability, insurers will have to enhance their service capabilities and engage in constant innovation to service their existing and potential customers. It is expected to bring in new benchmarks in delivery mechanisms and product innovation in the industry,” say Damien Marmion, chief executive officer, Max Bupa Health Insurance.

SBI Life introduces ‘Hospital Cash' plan

SBI Life Insurance has launched its latest health insurance plan ‘SBI Life Hospital Cash'. The plan provides fixed daily allowance to the insured for every day of hospitalisation.

“Our foray into health insurance is also aimed at addressing the issues of rising healthcare costs and acute under-penetration of health insurance in India,” said Mr M.N. Rao, MD and CEO, SBI Life Insurance.

Hospital Cash's daily hospitalisation cash benefit is available for a fixed policy term of three years and offers the flexibility of premium payment options, with collection on a yearly, half-yearly or quarterly basis.

It provides policyholders with a 100 per cent fixed payout from the first day of hospitalisation without any deductions.

The cover can be renewed till the age of 75 years.

In case the insured person is admitted into an ICU, the amount receivable by the policyholder is twice that of the Hospital Cash's regular cash benefit.

An additional fixed lump-sum of Rs 10,000 is payable to policyholders covering two or more family members under the plan in case the insured person is admitted to the ICU.

Bonus up to 40 per cent of enhanced sum assured without increase in premium, discount of 2.5 per cent on premium on renewal of policy, family rebates up to 10 per cent and premium guarantee for three years are additional features of the plan

Health cover doesn’t fit the ayurveda bill

Are you suffering from diabetes, arthritis or any other chronic disease and opting for ancient forms of medicine? The good news is insurance cover is available for such patients. After some insurance companies began recognizing ayurvedic treatment, many are going ahead with cashless transactions or 80% reimbursements for chronic diseases. Not just that, Karnataka has recognized 15 ayurvedic hospitals for its employees who can undergo treatment and even claim reimbursement.

The Ayush department is in the process of drafting specifications of ayurvedic treatments that can be reimbursed like any other mainstream one. "This can help employees get treated anywhere they like," said Ayush director G N Srikantaiah.

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It is also evolving standards for alternative medicine hospitals so that they can be covered by private insurance companies.

But ayurvedic hospitals feel private insurance companies are still restrictive in terms of coverage. At Soukya holistic health centre in Whitefield, 25 cases of 80% coverage have been made after some insurance companies began covering alternative medicine. "It was a little tough as the parameters of our treatment do not match that of mainstream medicine and diseases. Neither do we have standard pricing. But nowadays, people are coming to us for long-term chronic diseases that could cost up to Rs 1.5 lakh. These are comparable to surgeries in English medicine," said Dr Isaac Mathai, director of Soukya.

Soukya is in the process of getting a certificate from the National Accreditation Board for Hospitals and Healthcare Providers (NABH), so that the process of insurance coverage becomes smoother. At Soukya, the diseases mostly covered by insurance are chronic longterm conditions like arthritis , spondilytis, neurological diseases and even cancer. "Anything chronic should be covered by health insurance providers ,'' added Dr Mathai.

Health expo to unveil low-cost medical equipment

The Indian healthcare sector has emerged as one of the most progressive and largest service sectors in India. The public sector however is likely to contribute only around 15% to 20% of the required $ 86 billion investment.

"The corporate India is, therefore, leveraging on this business potential and various health care brands have started aggressive expansion in the country," said Dr EV Ramana Reddy, secretary to the department of Health and Family Welfare, at the inauguration of a three-day long exhibition, Healthex, on Friday.

“Various state governments are collaborating with the private sector through PPP to improve efficiency and decrease the inequity in the health system. Community health insurance initiatives have also been undertaken in terms of Yeshaswini Scheme in Karnataka,” said Dr Reddy.

The country's vision 2020 should include the delivery of affordable healthcare system even to the rural people. Preventive healthcare is another aspect that should be focused on and doctors should gear up to educate patients, he added.

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On the healthcare development in Karnataka, he revealed that the healthcare landscape is changing rapidly with corporate and foreign hospitals setting up centres to offer high quality healthcare. Moreover, the government is also promoting India as the global healthcare destination to offer holistic treatment. Now, private and public hospitals need to synergise their efforts to promote India as the healthcare destination worldwide, said Dr Reddy.

The Indian healthcare industry is undergoing a rapid expansion and in order to survive the healthcare market competition and growth, hospitals are continuously updating themselves on current issues, challenges, and the best methods to reach out to and serve their patients better, he said.With several innovations in the healthcare sector, there is a need for both private and public sector to work jointly.

"The rapid technical changes in the recent past and the commitment of the Army Medical Corps Services to provide a cradle-to-grave service have encouraged diversification in the unexplored fields in military medical services,” said Air Vice Marshal Pankaj Tyagi, principal medical officer, Headquarters Training Command, Indian Air Force.

Rs.150-cr for new insurance scheme

A sum of Rs.150 crore has been allotted initially against newly-formulated Chief Minister's Comprehensive Health Insurance Scheme, Finance Minister O. Panneerselvam announced in the Assembly on Thursday.

The old insurance scheme of the DMK regime was terminated, but to benefit patients in the bridge period between suspending the old scheme and launching the new one, a sum of Rs.100 crore was separately allocated, Finance Secretary K. Shanmugam said in his post budget briefing.

The government will focus on improvement of primary health care facilities in urban areas. The 60 centres already sanctioned under the National Rural Health Mission, will be shifted under the administrative and technical control of the Directorate of Public Health. Further, the Finance Minister announced that Urban Primary Health Care centres will be set up in 75 more small urban towns. A super-speciality centre, at a cost of Rs.100 crore, would be set up in Annal Gandhi Government Hospital, Tiruchi.

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Additionally, infrastructure and equipment upgradation has been planned for district hospitals and poison treatment centres at a cost of Rs.55 crore, under the Tamil Nadu Health Systems Project. Also, under public-private partnership agreements, diagnostic facilities at the major hospitals will be improved, and state-of-the-art computer aided laboratories established in all districts in a phased manner. A ‘Hospital on Wheels' scheme will be launched to provide door-to-door health care services far-flung areas to begin with. Sanitary napkins will be provided free of cost to rural girls through the ICDS network and village health nurses. A sum of Rs.46 crore has been provided for this.

Emergency transportation provided through the 108 ambulance service will further be extended to offering inter-facility transfer for all emergencies. Additionally, special vehicles will be put into service in tribal and hilly areas, and one vehicle will be provided per district for transporting new born babies.

IndiaFirst Life forays into health insurance

IndiaFirst Life Insurance on Wednesday forayed into the health insurance segment by launching a new product and said it expects to garner about 10 per cent of its total premium within next three years.

The company, a joint venture between public sector lenders Bank of Baroda and Andhra Bank along with UK-based investment firm Legal & General, also said it aims to sell at least 1 lakh health insurance policies within that period.

"As a line of business, health offers the best potential in the insurance sector. We have today launched out first plan -- IndiaFirst Money Back Health Insurance Plan -- and in the coming days, we will come out with more offers," IndiaFirst Life Insurance Managing Director and Chief Executive Officer P Nandagopal said.

The Money Back Plan would offer protection to customers for up to 10 years. The minimum premium payout of the customer would be Rs 10,000.

The health insurance cover would be a minimum for Rs 1.5 lakh and maximum of Rs 10 lakh.

"Health insurance, along would pension and micro- insurance, would be our three focus areas and we expect 10 per cent of our total business to come from health insurance within three years," Nandagopal said.

We also aim to sell at least one lakh health insurance policies in next three years, it added. The plan would offer health cover as well as savings option to the customer.

A part of the premium, depending on the age and health of the customer, would be credited into the buyer's policy account and this money would be invested in various funds to get optimum returns.

"The plan offers a comprehensive health cover for the entire family along with the investment flexibility to grow wealth by investing in different funds under a single plan," Nandagopal said.

"Our aim is to grow by 40 per cent year-on-year and be among the top six players within three years in the life insurance segment," he said.

IndiaFirst Life Insurance, which started operations in March 2010, currently has total premium of over Rs 1,000 crore.

A large population is without health insurance, as the industry has reached only 4.22 per cent of Indians. Around 14 crore people in urban areas remain untouched by any form of health insurance.

Choose your health cover with care

Check for renewal ceasing age, co-pay norm and sub-limits before opting.

A health insurance policy is a ‘must-have’ according to financial planners. Yet, picking up the right health insurance is not an easy task, given that there are 23 health insurance companies. Consider the six to eight life insurers offering health benefits and customers can be spoilt for choice.

While cost is certainly a deciding factor when choosing a plan, here’s a checklist of what else to consider.

Renewal ceasing age: Customers buying insurance rarely look at the age of policy renewal. The renewal ceasing age is the one when the insurer, no matter how long you have been with it, will refuse to renew your policy. For instance, health policies from ICICI Lombard cease at age 70.

Obviously, the higher the renewal ceasing age, the better. Most companies now offer higher or even lifetime renewal policies to customers.

Co-pay options: Typically, as health risks rise with age, companies ask customers to chip in. Besides higher premiums, customers may also have to co-pay for the policy. Companies follow different parameters to decide when they will convert the policy to a co-pay scheme.

For instance, Star Health Insurance begins co-pay once the renewal ceasing age sets in. So, customers could extend their period of coverage by changing their existing plan to a co-pay scheme. Bajaj Allianz General Insurance asks to co-pay if the customer goes to a non-network hospital.

Exclusions and PEDs: These two factors are the most painful ones. An exclusion is a statement in an insurance policy which describes a condition or type of loss not covered under it. Like, hospital cash plans do not cover dental treatment or surgery, pregnancy-related treatment, childbirth and so on.

KG Krishnamoorthy Rao, MD & CEO, Future Generali General Insurance, says, “Check for the coverage in terms of the inclusions and exclusions. These are mentioned in the policy brochure. And, if it does not cover something, you can either opt for other plans or take a rider.”

Another important feature, pre-existing disease (PED), may or may not be covered in health policies. PED is an illness or medical condition diagnosed prior to buying the policy. Nowadays, most companies cover PED with a lag of two to four years.

Sometimes complications arising from already existing diseases may also not be covered for the first four years of the policy. Senior citizen health plans exclude many ailments and, in many cases, need to be topped up with a rider.

Sub-limits: Check, Krishnamoorthy warns, to check for the limit on payments against the health plan. Health insurers reimburse those expenses that have been incurred reasonably. This is one way for insurers to restrict payments, especially when they think there is overcharging by hospitals. Typically, policies have a cap on the hospital room rent, operation theatre, ambulance charges and so on. For instance, ambulance charges on Bajaj Allianz Health Guard are only up to Rs 1,000.

All other charges, too, are reduced in proportion to the room rent cap. This is primarily because the charge structures levied by hospitals varies by the type of room chosen by you. But insurers are trying to do away with it. ICICI Lombard Family Protect Premier does not have sub-limits or a cap on room charges.

Policy issuer: According to health insurance experts, there isn’t much to debate here. “A traditional plan from health insurers should be the first medical policy that you buy, as these are exhaustive. Those from a life insurer can be an additional buy,” says Mahavir Chopra, head of e-business and retail, Medimange.com.

Traditional policies from health insurers or indemnity plans settle claims on a cashless basis or they may reimburse your bills. Life insurers who offer benefit plans or Hospital Cash Benefit Plans pay a fixed amount as soon as the illness is diagnosed.

Policies from life insurers offer restrictive covereage. They also have limits on the amount paid per day and the number of days the benefit can be availed. Say, you are supposed to be paid Rs 25,000 for a surgery; you will get it. But if the actual expense rises to Rs 40,000, you will bear the extra Rs 15,000.

Insurers can’t walk out of convention mid-term: IRDA

In a move that will benefit health insurance customers, IRDA has said that companies can not cancel insurance policies in the medium term. The move, sources say, is in response to complaints from policyholders of health insurance contracts that were terminated before the end of a year due to higher claims.

In a circular to all companies on this week, the Insurance Regulatory and Development Authority said not political, either fresh or renewal can be sold with a clause contrary to the rules of cancellation. The rules allow cancellation if there is fraud, misrepresentation or nondisclosure of a material fact of the insured.

However, the industry says it would be unusual not to have a cancellation clause. "Historically and internationally has been the practice of having a facility of cancellation available to both the insurer and the insured after giving sufficient notice to use other arrangements," says G Srinivasan, President, General Insurance Public Sector and head of U.S. Insurance Company in India. He said the termination clause was important in cases where the cover was based on reinsurance support from reinsurers also include a similar clause.

Pavanjit Singh Dhingra care insurance brokers said the cancellation of insurance policies due to adverse claims violated the trust policyholders. In the past there have been cases in which the offer to increase its topline, insurance companies, have acquired a group of practices is very low. However, after burning their fingers high claims have not used the escape clause.

"It is incumbent on insurers to do their homework and purchase appropriate and bear the risk of the contract. What is the purpose of insurance if the insurer can move away from risk, at its discretion? Sometimes insurance companies have been ruthless in underwriting policies and cancellation or attempted to renegotiate the terms of the insurance period which is totally unfair, and we welcome this action to protect policyholders, "said Dhingra.

Health Insurance is the Need of the Hour

Health insurance has become a necessity in today’s world. There are several reasons for an individual to have the protection of health insurance

Of all the risks which an individual household faces, health risk probably poses the greatest threat to lives and livelihoods. Everyone needs medical care sometimes and health falls with age. Sedentary life styles, hectic work schedules, long working hours and eating habits are leading to silent diseases causing rise in the number of people suffering from obesity, diabetes and cardio-vascular diseases. As per a Government of India report of 2006, morbidity rate for males is 8.5 per cent (rural) and 9.1 per cent (urban) and for females 9.3 per cent (rural) and 10.8 per cent (urban).

The other important risk faced by individuals is the risk of accident. As per a report in the National Medical Journal 2.5 million persons were hospitalised due to road accidents in 2005 and it is projected to be around 3.5 million in the year 2015.

There has been high escalation of medical costs due to advancement and high tech intervention in health, diagnosis and therapeutic procedures as well as prescription drugs. We live in a system of patent protection-a legal monopoly to pharmaceuticals that has been making the new drugs expensive and increasing the cost of care.

The explosion of knowledge in genetic engineering, biotechnology, nano-technology, medical informatics and gene therapy will further escalate the costs for most people.

As per a study of NCAER in association with Max New York Life Insurance Company, the average medical expenses of an Indian household is 6.5 per cent of the annual income and it increases sharply to around 37.4 per cent in case of major ailments. According to a study “India Knowledge @ Wharton Report” around 65 per cent of people remain in debt for life due to their expenditure on major health problems.

Health insurance is the ticket to healthcare and the best mechanism to finance healthcare to protect one’s savings, avoid debts and miseries.

National Insurance has been a major player in the health insurance segment in the country. It has in its basket 18 types of health policies to cater to the needs of the different segments of the society. In addition, the company has also been involved in the implementation of Rashtriya Swasthya Bima Policy in 50 + districts in the states of Haryana, Bihar, Assam, Tripura, Mizoram and West Bengal.

For the year 2010-11, National Insurance completed a health insurance premium of Rs 1681 crores out of the industry’s total health insurance premium of Rs 11,137 crores mobilised by 22 multi-line non-life and three mono-line health insurance companies. The company issued 14.47 lakh of health insurance policies covering 2.39 crore of persons. It paid 4.11 lakh number of claims amounting to Rs 1399 crore during the year.

Health insurance is the fastest growing non-life insurance segment and it is estimated to grow at a CAGR of 35 per cent during the next four to five years. Increased awareness, expanding aspiring class, rise in health costs, government initiated schemes like RSBY for the BPL population, construction workers and street vendors etc., have given a big boost to the health insurance segment.

The company has geared up to play a significant role in this high growth business through planned participation in the different segments like government schemes, retail and wholesale. Though losses has been a cause of concern in this business to all the players, the company plans to manage it sustainably by initiating a number of measures like proper monitoring of TPAs, creation of health cells in regional offices commanding high volumes of health business, emphasising on investigation and fraud control etc.

Health policies by life insurance companies will not be portable

Your plan to switch your existing health insurance policy from a non-life insurer to a life insurance company may not be possible, at least for now. The insurance regulator is likely to confine the portability of health insurance policies to non-life insurance companies.

“To start with, only mediclaim policies offered by general insurance companies will be portable. Health insurance policies offered by life insurance companies, which are much more complex in nature, will not come under it,” said a senior official of the Insurance Regulatory and Development Authority (Irda).

One of the primary reasons for not extending the facility is that the term of the policies offered by general insurance companies is one year. However, for life insurance companies, it is long-term, raging between three and 15 years. Portability allows a policyholder to shift the policy offered by one insurer to the other, while keeping the terms and conditions of the cover unchanged.

“Most health plans offered by life insures are indemnity policies or benefit policies, which are associated with lump sum benefits at the end of the term, subject to certain pre-specified conditions. Hence, it is very difficult to port credits, since these policies require completely different underwriting techniques,” said a life insurance company official.

“More than 90 per cent of the health insurance business is confined to the general insurance industry. Policies offered by general insurers are fixed-benefit plans and are renewed annually. This is different from plans offered by the life insurance companies. So, portability between health products offered by life and non-life insurance companies is not feasible,” said a senior official at a state-owned general insurance company.

In short, for mediclaim policies, there are no survival benefits or life covers. So, general insurance companies would not be able to service these kinds of health insurance plans, he the official said.

Another aspect is the pricing of the policies. “One of the important issues is how to price the benefits. Different companies offer different benefits to add exclusivity to their products. For instance, in the case of portability, one has to forgo some benefits. Thus, the policyholder might claim some discount, which the insurer might not allow,” said an actuary in a life insurance company. Top Engineering Colleges

Last week, the insurance regulator decided to postpone the execution of portability of health insurance policies by three months to October 1, as industry officials sought more clarifications from the regulator.

In a bid to facilitate data sharing among insurance companies, Irda had embarked upon providing a web-based facility for insurers to feed in all relevant details on health insurance policies issued by them. This data would be accessible by the company to which a policyholder wishes to port his policy. “Such a system would enable the new insurer to obtain efficiently data on history of health insurance of the policyholder wishing to port. It is necessary to enable the smooth running of the system,” Irda had said.

Domestic workers now covered under health insurance scheme

There is good news for 47.50 lakh domestic workers in the country: they will now be entitled to health insurance cover under the Rashtriya Swasthya Bima Yojana (RSBY).

The extension of the medical insurance scheme, approved by the Union Cabinet here on Thursday, envisages smart card-based cashless health insurance cover of up to Rs. 30,000 under any empanelled hospital anywhere in the country.

The RSBY would be extended to registered domestic workers in the 18-59 age group, Union Information and Broadcasting Minister Ambika Soni told reporters after the Cabinet meeting. The majority of them were women.

Earlier this month, the Cabinet had approved extension of the scheme to 55 lakh beedi workers by 2013-14.

The funds for the scheme would be allocated from the National Social Security Fund for Unorganised Workers. The premium will be shared by the Central and State governments in the ratio on 75:25. In case of North East Region and J&K, the ratio will be 90:10.

The estimated expenditure to be borne by the Centre will be Rs. 29.70 crore in 2011-12, Rs. 74.25 crore in 2012-13, Rs. 148.50 crore in 2012-14 and Rs. 297 crore in 2014-15.

Domestic work form one of the largest sectors of female employment in the urban areas. Domestic workers are unorganised and the sector remains unregulated and unprotected by labour laws. These workers come from vulnerable communities and backward areas and most of them are illiterate, unskilled and do not understand the urban labour market.

The beneficiaries would have to get identification certificates from any two of the four institutions -- the employer, resident welfare associations, registered trade unions or the police, Labour and Employment Minister Mallikarjun Kharge said.

The upper limit of the annual contribution would be Rs. 750 per beneficiary — of which the Centre would bear Rs. 565 — and another Rs. 60 for the smart card, she said. A maximum of five members per family would be covered.

The Rashtriya Swasthya Bima Yojana provides for smart card based cashless health insurance cover of Rs. 30,000 annually to below poverty line (BPL) workers (a unit of five) in the unorganised sector and is being presently implemented in 25 States and Union Territories. The scheme has since been extended to building and other construction workers registered with the welfare boards constituted under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, street vendors, beedi workers and such Mahatma Gandhi National Rural Employment Guarantee Scheme who have worked for more than 15 days during the preceding year.

Asked whether a law would be brought to protect the rights of domestic helps as suggested by National Advisory Committee Chairperson Sonia Gandhi, Mr. Kharge said, "the issue [of making a law] came up recently. As of today, we are extending the benefits of an existing programme to domestic workers".

Mr. Kharge said a task force, constituted in December 2009, had recommended among other things the extension of RSBY to domestic workers.

The extension of the scheme would not only provide them insurance benefits, but also help in preventing their exploitation, Ms. Soni said. It would also lead to registration of workers and placement agencies.

Norms for common TPA may be ready in 3 months

The proposed regulations for common Third Party Administrator (TPA) to check excess mediclaim bills by private hospitals is expected to be ready in the next three months. Accordingly, a common TPA is expected to help insurance companies control both health insurance premiums and claims.

Last year, the four general insurers namely National Insurance Company, New India Assurance, Oriental Insurance and United India Insurance had decided to set up a common TPA as a joint venture to manage health insurance claims. Concerned about over-billing, the insurers had even barred about 150 private hospitals from the list of preferred provider network (PPN) offering cashless medical facility. But, later the services were resumed by some providers after a dialogue between the hospital administrators and the insurance regulator, Insurance Regulatory and Development Authority (Irda).

‘‘With the formation of a common TPA, the health insurance business will come together and we will be able to negotiate better with service providers. We hope that it should be ready in the next three months,’’ G Srinivasan, CMD, United India Insurance Ltd, said. He was in the city here for signing an MoU with State Bank of Hyderabad (SBH) to provide free personal accident insurance to provide ‘‘group Janata personal accident insurance coverage’’ to all individual operative savings bank account holders of the bank.

Typically, TPAs are companies to which insurers outsource servicing of health insurance claims. They are approved and regulated by Irda and undertake a majority of the back office work including networking with healthcare providers after the insurance company issues a policy. They charge about 5% of the premium as fee to process a policy. Over 27 TPAs are so far registered with Irda....

LIC Jeevan Arogya – In Good Health medical cover for your parents

Escalating medical expenses are a cause for concern not only for the elderly, but also for those in their middle age. As health awareness increases not just regular insurance companies, but life insurance companies too are coming up with new health policies.

LIC has recently launched Jeevan Arogya, a non-linked health insurance plan that provides health insurance cover against specified health risks, with benefits such as daily hospital cash benefits, major surgical benefits and day care procedure to meet medical emergencies. In the event of any major illness suffered by the insured, the plan allows waiver of premium for the subsequent one year.

WHAT'S ON OFFER

* Guaranteed coverage for the policyholder up to the age of 80 and his family including parents and parents-in-law against medical expenses incurred due to hospitalisation.

* Financial protection in case of hospitalisation and surgery

* Automatic increases in cash benefits every year at 5 per cent

* Fixed benefits to the individual irrespective of the cost incurred

* No-claim benefit of five per cent, for three claim-free years

* Flexible premium payment options with rebates and discounts for higher premium

* Sum insured increases by 5 per cent a year, to the maximum limit of 1.5 times of the initial sum insured.

* Fixed premium for first three years, irrespective of the claims. Age at entry is the base for all future premiums till the policy is in force.

* Riders such as term insurance and accident benefit. The overall cover under the plan inclusive of the two riders is Rs 10 lakh.

* Tax benefits under section 80D available for all health insurance.

HOW IT WORKS

Individuals can choose the amount of daily hospital cash benefit (HCB) as per their estimated requirements. The plan allows a minimum of Rs 1,000 per day and maximum of Rs 4,000 per day to cover the daily cost of hospitalisation. For instance, for a family of six with parents above 70 and principal insured at 40 for a sum insured of Rs 2 lakh each the premium will works out to a maximum of Rs 31,502(before any rebate).

Daily hospital cash benefit: If the principal insured or any of the persons covered under the policy are hospitalised due to accident or sickness and stay in hospital for more than 24 hours in non-ICU ward an amount equal to HCB will be paid for 30 days in the first year and 90 days from the second year. In the event they stay in an ICU an amount equal to twice the HCB will be paid for 15 days in the first year and 45 days from the second year. This will be within the overall limit for each year.

Major Surgical Benefits (MSB): 100 times of the HCB or applicable daily benefit with an increase by five per cent from the second year onwards. For instance, if the HCB is Rs 2,000 in the first year, it will increase by five per cent to Rs 2,100 (daily cash benefit) from the second year onwards. MSB benefit will be available for minors also. The total number of surgeries covered under the plan is 140. The sum insured is payable based on the categorisation of surgery and it varies from 40-100 per cent.

Day Care Procedure (DCP): In the event of the insured undergoing for any of the 140 day care procedures LIC has specified, the amount paid will be equal to five times of the daily benefit and it will be allowed three times a year and 24 times for whole of the policy.

Other surgical procedures: In the event of the insured undergoing surgery not listed under the above options, and is hospitalised for more than 24 hours then two times the daily cash benefit will be paid for 15 days in the first year and 45 days in the subsequent years.

Quick cash facility: An advance of 50 per cent of the major surgical amount will be paid to the insured for the specified surgeries. To avail the benefit insured has to inform the LIC or the facilitator for the claims. After the latter processes the request LIC credits the eligible amount to the policyholder's bank accounts.

OUR TAKE

With health insurance plans netting large losses for general insurance companies, they have imposed many restrictions on insuring older family members. Hikes in premia too have been steep. Individuals finding it difficult to include their parents/parents in-law in their existing policies may find this plan suitable to their needs. However, LIC Jeevan Arogya has a cap on entry age at 75.

You should also note that a health policy offered by life insurance companies can only supplement health policies offered by general insurers. The health policies are an indemnity plan - the hospital expenses are reimbursed up to a maximum sum insured without any limitation. The health cover offered by life insurers are benefit plans and the cover is restricted by various conditions.

The advantage under the Jeevan Arogya is that pre-existing diseases are covered after two years, against the usual four-year waiting period . However, the premia during the initial years are higher compared to the top-up plans offered by the general insurer. But an individual signing up for this plan at an early age has the potential to save on premium later .

This plan is ideal for self-employed professionals, people with a family history of critical illness and for those above 65 who do not have a medical cover.

Health insurance scheme for beedi workers a poll device

The general secretary of Gondia CPI and district president of AITUC Hauslal Rahangdale flayed State government's health insurance scheme for beedi workers in the district as a gimmick in view of the coming municipal elections in Gondia and Tiroda.

The government had in a recent notification included Gondia in a list of 21 districts which have been selected for the health insurance scheme for beedi workers. The insurance cover is of Rs 30,000 on payment of a principal amount of Rs 30 per year. The criterion for the scheme is that the workers should come under the BPL category and also the insurance will cover only five members of the family. Government has asked the district administration to issue smart cards for this purpose. The work for which is going on war footing according to the staff of the hospitals earmarked for the scheme. Approximately 50 thousand such cards are to be readied by June 30.

Houslal Rahangdale said that when National Health Insurance Scheme for those under BPL category already exists in the state since 2008, the propriety of a new scheme only for beedi workers is totally unnecessary and the motive behind the move is questionable.

He said that according to a government circular dated August 27, 2010 the information about such workers is supposed to be collected by the insurance company appointed by the Nodal Officer. So the move to deploy the staff of the government beedi workers hospitals for this work is a mystery. As per information the Nodal Officer had appointed Tata AIG Insurance Company for this propose but according to local labour officer one MD India Insurance Company is doing this work on behalf of Tata and it appears to have passed this work on to the medical officers due to political pressure, Rahangdale said.

After studying all these aspects Rahangdale asked, why the government did not come out with a simple package of Rs 30 thousand for a family which becomes member of this insurance scheme or work towards providing additional facilities to the existing hospitals for the beedi workers from the funds which will be collected from the beedi workers. Rahangdale pointed out that the whole scheme is eyewash and demanded enquiry into this scheme.

Tata AIG General Insurance wins awards at Indian Insurance Awards

At an awards ceremony organized by India Insurance Review, Tata AIG General Insurance bagged 2 prestigious awards, 1 each in the health and general insurance category.

India Insurance Review and Celent presented the India Insurance Awards 2011 - the awards were presented to the Indian insurance industry in a glittering ceremony held at the Intercontinental Hotel in Mumbai this evening.

The jury consisted of Mr S B Mathur, Secretary General, Life Insurance Council; Mr S L Mohan, Secretary General, General Insurance Council; and Mr Vepa Kamesam, Managing Director, Institute of Insurance and Risk Management (jointly promoted by IRDA and AP Government).

Tata AIG General Insurance Company (TAGIC) was awarded the Company of the Year Award 2011 for Health Insurance and Best Product Innovation Award 2011 in the general insurance category for the year 2010 – 2011.

TAGIC was awarded the Company of the Year Award 2011 for Health Insurance segment during the Indian Insurance Awards. This award was to recognize the company that stood out amongst its peers in terms of Revenue growth, Profitability, Innovation & Customer service.

Mr.Gaurav Garg, MD of Tata AIG General Insurance Company said “The award reinforces our perception as a strong health insurance company as evidenced also by the HT MaRs Customer Satisfaction Survey (results published in March, 2011) which ranked us as No.1 in customer service satisfaction and No.2 in claims settlement satisfaction. This perception is likely to be buttressed by our imminent entry into the mediclaim space as we await IRDA’s approval for the Mediprime product. It is a testament to our wide and strong product range of benefit based secondary medical insurance products that have not only delivered a profitable business line but also awards from the industry and a high degree of customer satisfaction. Our dominating presence in the Overseas Travel Insurance which is perceived as an Overseas Mediclaim also contributes in no small bit to our position.”

Tata AIG’s current health insurance portfolio consists of the following products

Wellsurance (Executive, Family and Woman version) – A comprehensive, fixed benefit hospitalization, surgical and critical illness plan that offers guaranteed insurability at renewal for whole life.

Accident and Sickness Hospitalization Cash Plan – pays a fixed daily hospitalization cash benefit based on number of days of hospitalization

CritiCare – Pays a fixed lumpsum benefit in the event of diagnosis of any of the select critical illnesses.

TAGIC was also recognized with the Best Product Innovation award amongst General Insurance players in the Indian Insurance Awards. The recognition was for Private Client Group Home secure Policy that was launched in August 2009. It is a unique product catering exclusively to the High Net Worth client’s need of insuring their high value possessions such as paintings, valuables, work of art, jewelry, collectibles etc. It offers packaged cover for the entire home contents including above items with first in the market covers such as hole in one expenses, loss in value for fine art, pairs and sets, etc.

Additional services are offered along with the insurance cover e.g vulnerability assessments, transit supervision, conservation and storage assistance.

Tata AIG General Insurance Company provides insurance solutions to individuals and corporates. It offers a complete range of general insurance products including insurance for automobile, home, personal accident, travel, energy, marine, property and casualty as well as several specialized financial lines. Tata AIG believes in offering innovative and relevant insurance solutions in the retail and commercial space. Each product offering is backed by expertise and an unparalleled claims service.

Tata AIG’s products are available through various channels of distribution like agents, brokers, banks (through bancassurance tie ups) and direct channels like Tele Marketing, Digital Marketing, worksite management etc. Tata AIG has its operations in 59 cities.