Life insurers may offer bundled life & health packages, likely at lesser price

Chennai: As discussion begins to assess the feasibility of life insurers to design and offer health insurance products, existing and potential policyholders may be offered bundled packages of life and health products, with a possibility of cheaper insurance premiums. “Unlike non-life insurers we can offer unique bundled products like — life and health products, health and savings. In this case, the morbidity risk still stays with us, but the savings part goes back to the customer. We may also offer five-year guaranteed premium products as we have the expertise to offer long-time products. Given our history of having a significant distribution channel, we plan to leverage on them to cover the significantly bigger under-insured population,” said Bikash Choudhary, appointed actuary and chief risk officer, Future Generali India Life Insurance Company Limited.

Last Tuesday, IRDA announced the setting up of a committee to study the feasibility of allowing life insurers to offer indemnity based health policies, Life insurers have expressed interest and their ability to create newer markets to cover the under insured population.

NS Kannan, MD and CEO, ICICI Pru Life Insurance said the focus has shifted to living well from living long. Going forward, the problem of the country is not mortality as longevity is increasing, but are people living well and healthy. Speaking on the advantage which life insurance companies will have in offering health products, Kannan said, “The deep expertise to assess morbidity and mortality is the biggest advantage, in managing the risks associated around health products.”

On pricing of health insurance policies by life insurers, Aalok Bhan, Director and CMO, Max Life Insurance said if a customer is buying both life and health cover from the same insurance provider at a given point of time, there will be no need for separate medical and financial underwriting for each product, thus, cost of policy issuance and administration might also be lower. There will be a possibility to pass on such cost benefit to policyholders. The distribution strength of life insurance companies is unparalleled at 2.3 million, especially with LIC alone having over 1.2 million agents. “Besides agent-driven distribution model, we have recorded vast customer base via bancassurance model, where 40-50% of premium comes from these bank partners.” Policybazaar.com spokesperson said through the drafted regulations, life insurers may be able to implement the actuarial models and review the price periodically say in every few years or so instead of doing it every year. IRDA banned life insurers from offering indemnity-based health products since 2014 .

Source: The Times of India

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