Health Financing/Insurance

Non-life firms to appeal for health-plan clarity

The General Insurance Council announced its intention to make a presentation to the Insurance Regulatory and Development Authority (Irda) to strike “parity between life and non-life insurance companies on health insurance”.

The entry of life insurance players into the health insurance space has left general insurance players worried.

Policies from the former differ in that they generally offer a lumpsum payment, offer life cover within the same policy and do not need renewal every year.

Health policies offered by life insurance companies are benefit policies, wherein a person is given a pre-determined lumpsum amount on being detected with a disease or being hospitalised. The amount may be more or less than the amount you have spent. In case of general insurance, a person is reimbursed to the extent he provides medical bills up to the sum assured.

Recently, several life insurers have entered the health space offering a combination of life and health covers. So, individuals don’t need to go looking for a separate health insurance policy. Life companies are offering a co-ordinated care proposition while providing financial support and some sort of an income replacement to meet the cost of health complications.

As far as the nationalised insurers are concerned, all have grown their mediclaim accounts substantially. In fact, health insurance happens to be the second-most important segment after motor insurance.

Some of life insurance entrants in the health space include Tata AIG Life, ICICI Prudential, Max New York Life, Bajaj Allianz and Reliance Life.

Life Insurance Corporation’s Health Plus policy, while providing health benefits to entire family, allows investment of surplus funds in capital market.

At present, the scope of the health care market is estimated to be around Rs 60,000 crore and the share of insurance is less than 1%. Moreover, over 80% of the market is indemnity driven and is largely covered by mediclaim.

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