Page 26 - Insurance Times December 2018

2. Global health insurance policy targeting High Networth when the contingency strikes, he can discover the policy
Individuals (HNIs). Global policies provide coverage to would pay nothing, if the disease is at an initial stage or that
the insured all over the world, thus treatment can be disease is not covered at all in the policy. For example, in
taken in any country, and with this policy, one also case of 'Kidney disease', the critical illness policy would pay
avoids the hassle of going for an additional 'Overseas only in case of 'End Stage Renal failure', or in case of 'Burns'
Mediclaim policy' for a trip abroad. This product offers the policy pays only when it is 'Third Degree Burns'.
real benefits in terms of convenience and financing
treatment costs. No doubt, the premiums are high, but So, if a person does not have a comprehensive type of
premium being commensurate to the benefits, the 'Hospitalisation' policy, and has only DSP, he has no recourse
insured does not mind paying higher premium. Despite, in case of any non-included disease / injury afflicting him,
the benefits the market is slow to accept this product. or is of less severity than is defined in the policy; and he
3. Super Top-Up products, with high deductibles have has to bear the expenses of treatment from his pocket.
helped insureds get higher coverage amounts at There are indemnity type Critical illness policies also in the
substantially lower premiums and have indeed brought market, which make little sense since mainstream
hospitalisation type product is the first requirement for any
value to the customers.
insured, as the latter product provides a comprehensive
4. An important innovation by a PSU General Insurance protection and not against just a specific illness. Why
company, as part of the hospitalisation type is coverage
shouldn't the insured instead go for a Super Top-up policy
in respect of insured donating his organ, which is still with an underlying low Sum Insured hospitalisation type
an exclusion in most other health policies.
policy, thus ensuring adequate insurance protection?
5. The same PSU GI Company, launched a Hospital Cash
policy in 2015, where the Sum Insured (i.e the Daily Thus the DSP which the insured was sold with such
Cash Benefit) for women (irrespective of age) is 25% conviction, remains a piece of paper!
higher than the actual Sum Insured offered to the male
insured of same age (and same premium). What is the evidence?
6. Introduction of 'Medical Second Opinion' in Based on trends from few companies as well as anecdotal
hospitalisation type of policies, which provides coverage evidence, as industry wide data is not yet available, around
for taking expert's advice on-line / telephonically / in 80-85% of retail health insurance premium comes from
person from anywhere in the world. Mediclaim type indemnity type of policies followed by
Package policy accounting for around 5-6% of total Premium
These features / coverages are being offered for the first and Hospital Cash Plan accounts for 3-4 % of total premium.
time in Indian insurance history and can be termed as Rest of the policies contribute very negligible amount of
significant 'innovations'. premium. The number of policies and incurred claims would
be in same range.
However, now insurance companies have started offering
new Health Insurance products in the market, which merely This clearly indicates that customers are not impressed with
aim at making the insured feel good that he has some health critical illness product and the coverage it provides and
insurance protection, while practically offering little rightfully so. So the case for DSPs is even more weak and
protection. One such product is covering only a single disease. against customer interests. As mentioned earlier, Critical
One has started coming across disease specific products (DSP) illness products provide lump sum benefits. So if the sum
which provide cover against usually one illness like cancer or insured selected was low, the insured could be severely
cardiac or diabetes, or hypertension or dengue, etc. exposed as the illnesses treatment costs can be very high.
There are indemnity type Critical illness policies also in the
Some of these products resemble Critical Illness covers that market, which make little sense since mainstream
are usually on 'Benefit Basis', which means that the policy hospitalisation type product is the first requirement for any
pays a lumpsum amount on diagnosis of disease (it may be insured, as the latter provides a comprehensive protection
noted that most of the policies would pay only if the and not against just specified illnesses.
diagnosis reveals a specific 'stage' of the illness, which is
usually a later stage). So, by purchasing such DSP, the buyer Insurance data indicates that leave alone these DSP even
of the policy 'feels' he has insurance protection. However the mainstream critical illness covers are not really popular

26 The Insurance Times, December 2018