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.

Pvt hospitals get together insurance firm today

Leading corporate hospitals, which are out of the preferred provider network (PPN) of public sector health insurance firms, will offer standardized treatment packages for nearly 250 procedures to see their PPN status restored soon.
The representatives of hospital chains such as Apollo, Fortis and Max are expected to meet their health insurance counterparts with the new proposals tomorrow.
The move comes after a recent meeting of the heads of the hospitals and the four state-run insurance firms — New India Assurance, United India Insurance, National Insurance and Oriental Insurance — decided to form separate working groups to sort out the pricing issues the insurance firms had with these hospitals.
The groups were expected to sort out a compromise formula within 10 to 30 working days.
The insurance firms had stopped offering cashless services to their policy holders approaching the hospitals that are not in their PPN list as they felt that such hospitals were ‘over charging’ their insured patients.
The hospitals, grouped under industry chambers such as CII and Ficci, had argued that isolated incidents should not be the basis for excluding corporate hospitals from PPN.
“The insurance companies had never raised such an issue before. Now that they have expressed their concerns, we will try to address their problems. Tomorrow’s meeting will not be the final one, but we expect most of the current issues to be solved soon,” a healthcare industry executive, who is part of the negotiations, said today.
The high claim ratio — health insurance claim ratio stood at 130 per cent during 2009-10 — was the main reason for the insurance firms to have a strict scrutiny of the rates being charged by the hospitals for various procedures.

Keep on healthy, Keep on wealthy

The age of touting mutual funds is over and the age of selling fear has started. Fright for your life, fear for your health, fear for your loved ones. The excitement to say no to the pesky neighbourhood insurance sales guy is strong within all of us. But before actually banishing him from your life, just stop for a moment and do a quick 'health check'.

Health costs have been rising insidiously in double digits, year on year, for the last few years. Many of us are still impractical when it comes to the costs of a longish stay in a hospital.


More importantly, costs can be far higher once the hospital part is done with. It's the post surgery care that often eats large holes into our finances. This is rarely covered by the traditional Mediclaim Policy, which mostly covers hospitalization.

Previously, our choices were limited--there was mediclaim or mediclaim. In more recent years, a few more options have come up. Life Insurance Companies have been offering riders that cover some critical illnesses. In the last year or so, insurance companies, both government and private, are offering individual health policies worth considering. These don’t eliminate the need for the traditional mediclaim, but help you top up and catch up with the rising costs.

For example, non-hospital expenses can be covered by the 'critical illness cover' which must be bought alone. Similarly, say you are having a waterfall or some other surgery that doesn't require you to be in hospital; 'surgical cover' is an add-on where you get a fixed benefit regardless of the bill amount.

As always, when there are more choices, it's a bit of a land mine to navigate when you want to estimate whether to top up your health cover and if so with what, and how much. The sweat is in the nitty gritty, which diseases are covered, whether to take a Mediclaim family policy or a floater.

But once its done, at least you can heave a sigh of assistance that you won’t get wiped out financially if you fall ill. The table below can help start the wheels turning.

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