How has health insurance changed over time? When should you go to for riders??
Insurance
is now being offered for what is called the ABCD illnesses. Depending
on the stage or depending on how serious the disease is, they are
offering day one cover, which basically means that right after you buy
the policy, a certain kind of coverage kicks in and then maybe after 30
days, more coverage kicks in against having a waiting period of three or
four years, says Sarbvir Singh, Joint Group CEO, Policybazaar.com.
Singh
points out that some of these products will be a little more expensive
as compared to a basic product which has a longer waiting period, but it
offers the person a choice We are seeing health
insurance companies trying to do a revamp. It includes a lock-in
premium, high no claim bonuses, elaborate coverage and for senior
citizens, even treatment for critical illnesses like cancer abroad. All
of this is now being introduced. What
could be the reason behind these kinds of revamped features? Is this
the demand or innovation part where health insurance companies seem to
be focussing? There are a couple of points. We believe that the
health insurance product in India is actually a very good product, even
today thanks to the kind of coverage that is offered. Despite that, the
penetration of retail health insurance in India is still very low. All
companies are trying to find ways around the objections that people might have and to give them greater attractiveness for buying health insurance
One
of the points that a lot of consumers have is that if I do not make a
claim, then what happens to the sum insured that I have? Now, many
products allow you to carry that forward and it can add up to seven to
ten times where you started from. There are products which are giving
you a no claims bonus; even if you have to make a claim, they still
restore a large portion of the sum insured for you. There are products,
which are offering global coverage.
There
is a demand where sometimes you may need to go abroad for a specific
critical illness. Those products are being offered. Equally exciting is
one product which has now come out for senior citizens who typically
have one major problem; they do not want to serve the waiting period
because they feel that the reason they are buying health insurance is
because they may need it anytime.
Typically,
what used to be a four-year waiting period has been reduced now. So,
slowly but surely, health insurance companies are coming out with very
innovative products which are addressing each of the reasons why a
consumer may not buy health insurance.
You just mentioned waiting periods. Diabetes used to be a point of elimination for a lot of people when they were buying health insurance for themselves. It is no longer the case. What has been the shift over here?
Insurance is now being offered for what we call the ABCD illnesses. Depending on the stage or depending on how serious the disease is, they are actually offering what they call day one cover, which basically means that right after you buy the policy, a certain certain kind of coverage kicks in and then maybe after 30 days, more coverage kicks in. certain kind of coverage kicks in and then maybe after 30 days, more coverage kicks in.
This
is against having a waiting period of three or four years. Some of
these products will be a little more expensive as compared to a basic
product which has a longer waiting period, but it offers the person a
choice where if you are concerned about the fact that because you are
already suffering from one of these diseases, you are able to still get
coverage as soon as you need it. I think this is a very innovative
solution that the insurance companies have created where people with
illnesses are actually being allowed to be covered as soon as the first day. This includes diabetes as well.
In
terms of places from where we are seeing these kinds of interests
coming in, as an online portal, can you give us some data as to which
parts of the countries now are participating more into getting
themselves insured when it comes to health insurance policy? A lot of
people in India buy insurance policies, be it life or health, for tax
benefit which seems to be changed now because of the new tax regime,
there would not be any benefit on these insurance policies. What is the
change in narrative in terms of buying health insurance?
We
see that consumers have moved on from the tax narrative, especially for
protection policies. So, for health insurance and term insurance, the
tax narrative is a useful secondary thing, but primarily people
understand that they need to protect themselves.
In health
insurance, one of the things we have seen is that while five years ago,
almost 60 or two-thirds of our sales were coming from bigger cities or
tier I cities today
that situation has completely reversed. Today, about two-thirds of our
sales or 60% of our sales are coming from the smaller cities and the
remaining is coming from the bigger cities. That has happened
for a couple of reasons. One is Covid, because people understood the
need for health insurance when Covid happened and secondly, there is a
much greater awareness that health liabilities can come up and even
people living in smaller cities now understand the value of health
insurance.
Thirdly,
the insurance companies have done a great job of increasing the number
of cashless hospitals where this insurance can be used and that gives
confidence to the customer. When you see the names of hospitals around
you, that gives you confidence and these three things put together have
led to this change in buying behavior.
Coming
to senior citizen plans, can you help us understand how the entire
narrative has changed. In terms of coverage, we have seen a lot of
changes when it comes to senior citizens and their pre-existing
illnesses especially.Senior citizens now have a wide choice
of plans. On one end are the premium plans which provide day one
coverage for many named diseases. They provide a concierge service.
Insurance companies have now moved beyond just hospitalisation and
treating people
when they are in a hospital, but they also provide preventive care.
They provide disease management programmes, consultation, OPD
consultation with doctors, nutrition support and even exercise support.
So,
what is happening is that for senior citizens, on one hand, there are
these very premium plans with first day coverage and very good support
services so that if you ever need to go to hospital, disease management.
On the other hand, we have the more traditional plans which plans which have a copay, a higher waiting period, but then they are much more affordable.
So,
senior citizens now have a range of options to choose from ranging from
very easily usable plans to maybe more economical plans which provide
coverage.
What are the importance of riders? Having a
comprehensive policy is fine. Just have a base health insurance policy
with you and then later on for further coverage, you can add a lot of
top ups and riders. How can one design own health insurance policy with all important riders?I
would suggest that customers need to keep it a bit simple because
otherwise it is easy to get lost in the jargon and in the whole thing.
The main thing is to first have a sensible base plan which provides you
an appropriate level of coverage for the amount of money that you are
comfortable with and then depending on your situation, you can add
certain additional benefits.
These
could be in the form of reduced waiting periods, these could be in the
form of some of these disease management programmes in the form of OPD
consultations or others. But I would again reiterate that the first
thing that a customer should do is to get a good base policy and then on
top of it, depending on the situation, add riders. I would always
suggest that you should consult an insurance expert, a person who can
advise you very well on these things.
What
would you suggest the existing policyholders do? Should they just give
up on the old ones or get an update on the existing insurance policy to
have the benefit of these features?
I
would suggest that they should first look at their existing policy.
What we have found is that many times consumers do not know the full
benefits that they have in their own policies. Policies are quite
powerful and one should understand the policy better
Secondly,
what you will find is that many policies, even though they may be the
same for the last few years, have added benefits as they went along. So,
it is important to understand those.
Thirdly,
I would suggest after having done the first two steps, if there is
anything that is lacking in your policy and that is something that you
would like, then you can go in for a rider. Many companies offer riders
which can be attached to existing policies and, of course, if it turns
out that after all this, that policy is not suitable, then of course
they should consider looking at some of these new age products and
porting to them.
