Page 25 - Insurance Times May 2020

Another unique feature of this product is that the premium II) Amendment of the definition of pre-existing
need not be paid in a lump-sum at the commencement of diseases (PED)
cover and payment options range from monthly, quarterly,
The Regulator has modified the definition of PED and has
bi-annual to annual payments. Payments through Electronic
Clearance Service (ECS) with the use of auto-debit facility stipulated that no disease will be treated as PED, even if
diagnosed within three months or later of purchasing a
will also be allowed.
health insurance product, by way of a circular in February
of this year. However, this modification is not applicable in
The minimum sum Insured under Arogya Sanjeevani would the case of Overseas Travel Insurance. This definition was
be Rupees One lakh and the maximum sum Insured will be included in the guidelines on standardisation in health
Rupees Five lakhs. The policy may be issued on individual insurance released by IRDAI on 27th September 2019.
sum insured basis or on a floater basis to the family. The
minimum age at entry is Eighteen (18) years and the While this will lead to lower rejection of claims and bring
maximum age is Sixty-Five (65) years with life- long
cheer to customers, it will also increase claims outgo and
renewability. The policy would be available for a period of
one year on a pure-indemnity basis. Cumulative Bonus is ultimately lead to higher premia.
available under the policy and the sum insured will be
increased by 5% in respect of each claim-free year subject III) The option of Customers' choice for health
to a maximum of 50% of the sum Insured. insurance Third-Party Administrators (TPA)
In December 2019, IRDAI vide the Insurance Regulatory and
On a claim being made in any particular year, the Cumulative Development Authority of India (Third Party Administrators-
Bonus accrued will be reduced at the same rate at which it Health Services) (Amendment) Regulations, 2019 stipulated
has been accumulated. There is a fixed co-pay of 5% on all that policy-holders will be allowed to choose their own TPA.
claims. There are also specified waiting periods for diseases As is well acknowledged, TPAs now play an essential role as
as per standard guidelines and sub-limits for items such as they are the first point-of-contact when the insured applies
room rent charges, and capping of sum-insured for cataract for cashless authorisation for her hospitalisation claim. They
operations and for some specified procedures. Pre and post- are also thereafter responsible for processing the health
hospitalisation benefit provisions are available. Other claim (be it cashless or reimbursement) and for consolidation
standard clauses such as Grace Period for Premium of documents from the hospital concerned and final
Payments, Portability and Free-look Period of 15 days are quantification of the payable amount. However, they are
also available. not responsible for claims rejection or acceptance, which is
the sole prerogative of the insurer.
While this is a welcome step for customers who would often
require only a standard cover shorn of add-ons, the sum- It has been stipulated that henceforth, the policy-holders
insured options appear to be somewhat inadequate. The will be allowed to select the TPA at the time of purchase of
sum-insured perhaps could have been allowed up to Rs. 10 the health policy or during renewal. A list of TPAs is to be
lakhs, keeping in view the mounting costs of medical
treatment, particularly in Tier-I cities.

There is also provision for pre-acceptance medical
examination and loading based on health status and/or
occupation and these underwriting criteria may differ across
insurers. The premium is to be specified by the insurer
concerned and presumably, this would be the main
differentiator between the different insurers offering the
same product.

The option of making premium payments in instalments will
require the insured to be vigilant by close monitoring of the
compliance of premium payment guidelines by her,
throughout the policy period.

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