Customers are always advised that they should buy a health plan only after comparing the plan with other plans available in the market. Though comparing is essential, customers have to ensure that they compare similar health plans and not plans with varying coverage benefits. There are about two dozen health insurance companies in the Indian insurance market and each insurer offers a range of health plans.
As such, for an average customer, there are about a hundred health insurance plan to compare. Comparing between so many plans becomes difficult. Moreover, each plan has a different set of coverage benefits and so ensuring a fair comparison becomes impossible. Understanding this problem faced by health insurance customers, the Insurance Regulatory and Development Authority of India (IRDAI) has proposed the concept of a ‘Standard Health Insurance Product’. Let’s find out what IRDAI’s proposal is all about and the rationale behind it –
What is a Standard Health Insurance Product?
As per IRDAI’s proposal, a ‘Standard Health Insurance Policy’ would be a health plan which would have basic coverage benefits. The policy would be uniform across all health insurers in terms of the coverage offered. No add-ons or optional coverage benefits would be offered under the policy as it is supposed to provide a basic health cover.
Features of the plan
As per IRDAI’s proposal, the policy would have the following features and benefits –
- The range of sum insured under the policy would be from INR 50,000 to INR 10 lakhs
- Insurance companies can offer other health plans too besides the standard policy
- The product can be sold by all types of insurance middlemen and across all distribution channels including micro agency and common service centers.
- Individuals aged 18 years to 65 years can enjoy lifelong renewability under the plan
What would be covered under the standard plan?
The standard policy would provide coverage for the following basic healthcare expenses –
Hospitalization expenses – these would include expenses incurred when the insured is admitted to a hospital for a period of 24 hours or above. The following expenses would be covered under this head –
- Hospital room rent
- Nursing expenses
- Fee payable to doctor, surgeon, anesthetist, specialist, medical practitioner, etc.
- ICU and ICCU room rent
- Cost of anesthesia, blood, oxygen, medicine, surgical appliances, etc.
- Expenses incurred in cataract treatments
- Expenses incurred on dental treatments caused due to an injury
- Expenses incurred on plastic surgery required due to an injury or disease
- Domiciliary hospitalization
Pre-hospitalisation expenses – expenses incurred for up to 30 days before being hospitalized would be covered
Post-hospitalization expenses – expenses incurred for up to 60 days after being discharged from the hospital would be covered
AYUSH treatments – Ayurveda, Unani, Siddha or Homeopathy treatments would be covered
Wellness incentives – to promote wellness and healthy living, wellness incentives are also included in the coverage benefits. These incentives would include the following –
- Free health check-ups and consultations once a year
- Disease management which would provide professional medical service after the insured is discharged from the hospital
- Fitness activities
- Outpatient consultations and treatments
What would be the premium?
Though IRDAI has proposed to make the coverage uniform, the pricing of the policy is left to the insurance companies. Insurers can fix the premium based on their claim experience. However, IRDAI has asked insurers to give premium incentives to individuals who buy the plan young. Moreover, the premium should be fixed in a way that customers are motivated to renew the plan every year and also make lower claims.
How will the plans help?
Benefit for customers
- Customers would be easily able to compare the standard plan of different insurers and choose a plan with the lowest premium without worrying about missing the coverage benefits
- Since all the basic coverage benefits would be provided, customers looking for affordable plans can choose this plan
Benefit for insurers
- They can increase their sales as customers would be more interested in buying a standard plan at low-interest rates
- Due to the proposed premium incentives, companies would be able to lure customers to buy their plans
- Since the premium determination is left to insurers, they would not incur any loss in selling the policy
What would be your role?
As a PoSP (Point of Sale Person), your role would be to educate your customers about the availability of these standard health plans. You can, then, help your customers compare and buy the plan from the insurer charging the lowest premium. Your customers can get the basic coverage at affordable premiums which would promote health insurance among your clients increasing your business in the process. So, understand the concept of standard health plans so that you can help your customers buy them when the plans are launched.