Page 27 - Insurance Times December 2018

among the individuals (families). This non- acceptance of support if the disease has been diagnosed at an initial stage?
Critical Illness covers among the insuring public is easy to Does the policy pay for diagnostics or for the treatment? The
understand. It is natural human psychology to think that answer is clearly in the negative.
nothing adverse, specially something as grave as cancer, or
renal or liver failure can ever strike them or their family So, where is the customer interest in these products? Are her
members, and this thought often prevents people from needs for comprehensive coverage being addressed? Is her
taking insurance covers like 'Critical illness'. need for medical expenses for a range of contingencies being
adequately financed? If the answer is NO, then do these DSP
The possibility is too frightening to even contemplate which constitute unjust enrichment or marketing gimmick of
leads to failure to purchase. Most insurers would agree that insurers? Do buying different policies for various specific body
this is a common underlying thought, which prevents people ailments make any economic sense to the buyer?
from purchasing such covers. A, DSP which is even more
restricted than a critical illness cover, on a stand-alone basis, Do these innovations help Insurers?
appears to be an impractical proposition and thus an eye Further questions arise on the need for such products from
wash, since it is not only one specified illness that can afflict an insurer's perspective. Those who have been involved in
a person. Any disease or accident has the potential to drain health insurance product development would have noticed
the family financially. So, shouldn't a person be insured
that considerable amount of time and effort is spent in
against many potential medical eventualities? Or shouldn't
developing such products. Given that very few people buy
a person have a comprehensive health insurance cover?
such DSP type of products, it would be a long time before
these products become popular.
Some of DSPs like cardiac are on indemnity basis as well
(meaning, the policy pays only when there is hospitalisation It is also not clear whether for example dengue specific
and the coverage is to the extent of actual expenditure). It product would be marketed in regions which are endemic
is a reasonable question that when given the option for with mosquito borne diseases? Or would a cardiac policy
coverage for hospitalisation, any reasonably informed be marketed to all those with sedentary lifestyle? Or will
person would go for a 'Mediclaim type' policy which covers these policies be marketed all over the country without any
any disease / ailment (of course subject to usual exclusions
bias? If so, then the question is how many such policies have
) including cardiac or any one illness. With IRDA Health
been sold? Of course, for the buyer it makes little economic
insurance Regulations 2013 & 2016, the Regulator has sense and she would refrain from buying such policies until
ensured that all major exclusions get covered after four she is coerced or fooled into buying them, or may be when
continuous years of policy, whether, the policy has been
she knows beforehand that she would actually need that
renewed with the same insurer or with different Insurers.
particular policy- a case of adverse selection which is
detrimental for insurers.
Does the DSP innovation have 'customer'
as the focus?? In view of the above, it becomes clear that sustainability of
such products is questionable. So a more pertinent question
So, it is pertinent to ask whether these disease specific
insurance products (DSPs) have been designed with is why do insurance companies come out with these health
customer as the focal point? Are these products worth
purchasing?

The basic reason why one purchases a health insurance cover
is that if need arises, the treatment expenses, arising from a
wide range of illnesses, gets financed by the insurance
company in consideration of the premium and full disclosure.
Now it is really perplexing as to how many DSPs would a
person think of purchasing? Do the insurers intend to offer
a bunch of 10 different health products to a customer, say
a 'Dengue' policy, a 'Cancer' policy, a diabetes' policy, a
'Cardiac policy', a 'Malaria' policy, a 'TB' policy', and so on.
Or in the case of Critical Illness policies, where is the insurance

The Insurance Times, December 2018 27