Standard health products for vector-borne diseases can work as a supplementary cover

The Insurance Regulatory and Development Authority of India (Irdai) last week launched draft guidelines on standard health insurance products for vector-borne diseases such as dengue, malaria, kala-azar, chikungunya and zika virus. The general and health insurers can offer one or a combination of diseases and can price a policy for every disease separately. The minimum sum insured is ₹10,000, while customers can opt for a cover in the multiples of ₹10,000, up to ₹2 lakh. The policies, which can be offered on a family floater basis as well, will have a waiting period of 15 days and the premiums will be same pan India.

A standard insurance product means that the coverage details for a particular policy is uniform across all insurers. Other standardized products include Corona Kavach and Rakshak for Covid-19, Arogya Sanjeevani, which is a health plan, and Saral Jeevan, a term insurance policy. Life insurers have been mandated by Irdai to launch Saral Jeevan products by 1 January 2021.

“Standardization helps set a baseline for insurers. At the first level, this will ensure the availability of specific-purpose plans. Next, insurers can innovate on product design to differentiate and provide more options to policyholders," said Abhishek Bondia, managing director and principal officer, SecureNow.in, an insurance broker.

However, it will not be mandatory for insurers to launch standard policies for vector-borne diseases. In a circular last week, Irdai said the base cover for such products should be offered on an indemnity basis (expenses incurred during hospitalization are reimbursed) and optional covers shall be offered on a benefit basis (payout is fixed). The insurers can offer two optional covers along with the standard product.

The regulator has also proposed that these products should be offered for a fixed term of one year, however, it is looking for suggestions on whether they can be offered for a shorter-term (less than one year), as vector-borne diseases are generally seasonal. The regulator is open for comments or suggestions on the guidelines till 27 November.

“These diseases have always been common in India, however, people take it lightly. The cost of treatment for dengue can range from ₹25,000 to ₹70,000. Having a vector-borne disease plan can help customers protect themselves against these diseases," said Amit Chhabra, head, health insurance, Policybazaar.com. Expenses for room, boarding and nursing have been capped at 2% and the charges for intensive care unit (ICU) have been capped at 5% of the sum insured above ₹20,000. Road ambulance charges have been capped at ₹2,000 per hospitalization.

Medical expenses incurred 15 days prior to the hospitalization and 30 days after the discharge will be covered. The policy will not allow any deductibles—an amount insured must pay from his or her own pocket before the insurer pays towards the policy coverage. According to Bondia, standard products for vector-borne diseases are expected to widen the ambit of health insurance coverage. However, for people with a standard health insurance plan, these risks are already covered in their existing policies.

“These plans will be beneficial for policyholders if the fixed-benefit payout can be enhanced. This can then help act as a supplementary plan for individuals with existing health insurance coverage. In several cases, these illnesses can be managed at home. So, a fixed benefit payout will help defray these expenses," he added. According to experts, for individuals who are looking for cover against diseases such as dengue, malaria, buying a regular health insurance plan would still be a better option.

Source: Live Mint

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