Mr. Antony Jacob's Interview in NDTV

Simply Ganguly - On the Hot Seat With Sourav

18 January 2013: 'Simply Ganguly' is a series starting today that will see Sourav Ganguly interacting with various interesting characters on the hot seat. Simple questions, straight forward answers, and unexpected guests.

This series will be launched at Apollo Munich's official facebook page on 18 January 2013.

The first guest on the hot seat is 'Elvisda'! Elvisda is a dhinchak party animal who is happy go lucky and wants to enjoy life without worries. Watch out for Elvisda – his hips don't lie. Nor does he.
This engagement initiative by Apollo Munich (@apollomunichins) marks Sourav's (@SouravGanguly) foray into social media.

Note to editors:
Apollo Munich Health Insurance Co. Ltd. is a joint venture between Apollo Hospitals Group and Munich Health, Munich Re’s newest business segment.

The company offers comprehensive health insurance plans for individuals and their families as well as for corporate houses. The company also offers individual personal accident plans and travel insurance for individuals, families and senior citizens. Apollo Munich is a specialized health insurance company in India that has expertise in both health and insurance and is able to leverage this understanding for the benefit of its customers.

With over 8,500 beds across 52 hospitals in India and overseas, neighborhood diagnostic clinics, an extensive chain of Apollo Pharmacies, medical BPO as well as health insurance services and clinical research divisions working on the cutting edge of medical science, The Apollo Hospitals Group is Asia’s largest integrated healthcare provider.

Munich Health draws on Munich Re’s insurance and reinsurance competence with over 5,000 experts at 26 locations worldwide. The Company devise innovative healthcare solutions for clients and partners all over the world.

Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. This is how Munich Re creates value for clients, shareholders and staff. In the financial year 2010, the Group – which pursues an integrated business model consisting of insurance and reinsurance – achieved a profit of over €2.4bn on premium income of around €45.5bn. It operates in all lines of insurance, with around 47,000 employees throughout the world.

Apollo Munich Health Insurance Company Limited
10th Floor, Building No.10, Tower B,
DLF Cyber City, DLF City Phase-2,
Gurgaon-122002, Haryana, INDIA.

IRDA Brings Insurance Closer to Public in 2011

Preeti Kulkarni, ET Bureau Dec 28, 2011, 04.45am IST

Insurance policyholders will remember the year 2011 for the series of small steps taken by the Insurance Regulatory and Development Authority (IRDA) to protect their interests.

The measures may not have had the course-altering stature of the September 2010 Ulip charge cap, but they did nevertheless have significant impact from the policyholders' perspective. This apart, trends in the insurance space also left their imprints. A round-up of some of them:


Advantage policyholders? 

Overall, life insurance policyholders did have plenty to cheer this year. "Unit-linked products have become less costly and more affordable for customers, the new pension guidelines ensure that the maturity benefit will have a guarantee of some sort embedded within the product," says TR Ramachandran, CEO, Aviva Life.

Agents feel the heat

For long, policyholders have complained about agents pushing life policies, particularly Ulips (unit-linked insurance policies), irrespective of whether they matched their needs or not. This year, the Insurance Regulatory and Development Authority (IRDA) decided to take some action to check this mis-selling menace by coming out with minimum persistency standards for agents to continue in the field.

"Customers can now look forward to being advised well and can look forward to continuing good service from the agent through the policy term. This is perhaps the most significant customer centric development for 2011 and will curb, if not eliminate, any scope of mis-selling," says Suresh Agarwal, executive vice-president at Kotak Life.

New pension Ulip norms out 

Insurance companies, barring a few, had stopped launching pension Ulips under the post-September 2010 regime, citing mandated return guarantee as the chief hurdle. IRDA has now decided to relax the norms and some insurers are upbeat about the same.

"The new norms will provide a fillip to the Ulip-based pension plans. This is extremely important in a country like India, where life expectancy is expected to go up, the joint family support system is giving way to nuclear families and social security is low. Pension is a huge market and the new guidelines will encourage insurers to provide the customers a wider choice in pensions of all types - Ulip as well as traditional," says AS Narayanan, chief distribution officer, Bajaj Allianz Life Insurance.

From policyholders' perspective, financial planners' advice is that they should consider other options like PPF, NPS and mutual funds too, before making a decision.

More flexibility to revive Ulips

November 1 onwards, policyholders were allowed to revive their discontinued Ulips. Until then, if you missed paying premiums, your policy would lapse. Now, however, you can revive your policy within a maximum of two years of last premium paid, provided it falls within the mandated lock-in period of five years.

Market sees new products, re-launches 

The shift towards endowment plans from Ulips continued this year and term plans, particularly online term insurance, gained popularity. Last year, the insurance regulator came out with norms on variable insurance plans after banning their previous avatar, that is, universal life plans.

Only LIC launched VIPs post the new regulations last year, but this year, SBI Life too threw its hat in the ring. This apart, the insurance space saw the introduction of Ulips that come with life-long cover, those with limited premium paying terms and others that carry zero-premium allocation charges.
Guaranteed Ulips face uncertain times

These popular, but complex, products were under the IRDA's scanner this year and the chances are that the fallout could be evident next year. The regulator's concern was that these highest NAV-guaranteed products could lead to miscommunication and customers may end up buying them without a thorough understanding of their workings.

Opt For Health Cover Early In Life For Optimum Benefits

With the economy’s recent highs and lows, it is little wonder that people are stressed for time, money and health. According to world reports, India already has the distinction of becoming the diabetes capital of the world. Going by recent medical reports from leading hospitals, the country is set to become the heart disease capital of the world too.

Changing lifestyles: Indians are seeking greater affluence and have changed their lifestyle drastically over the past decade. Today’s corporate employees are falling prey to ailments such as strain injury, carpal tunnel syndrome, postural back pain and disorders, computer vision syndrome, osteoporosis, stress-induced conditions and gastrointestinal disorders. Corporate life today means jet-setting across the world, perhaps, with little time to spare for oneself. The digital age has ensured that people are connected to their offices all day and sometimes, all night, with the advent of smart phones, among others.

In addition, lifestyles and work habits have resulted in limited physical exercise. Enhanced levels of stress and poor food habits have lead to an increase in chronic ailments such as diabetes, hypertension, obesity, cardiac diseases and gastrointestinal diseases. This should be a cause of great concern for every Indian today. With health taking a toll, people must ensure that they are ready to face the future securely. That is where health insurance plays a vital role in India.

With globalisation and innovation in healthcare technology, medical treatments are becoming almost unaffordable and because of no or inadequate health insurance cover, Indians end up exhausting their savings while striving to save their loved ones. Health insurance is an essential cover. Health insurance should not be seen as a policy to have when one turns 40 years or above. It is a safety net that is required right from the beginning of a person’s career, given the kind of lifestyles being led today.

Buy health cover at young age: The advantages of insuring oneself at a younger age are plenty. Health insurance companies have waiting periods for several ailments in their policies. If a person purchases a health insurance policy early enough in life, these waiting periods are over well before he or she may need the facility, thus, ensuring coverage for all ailments and diseases. The ‘no claim’ benefit is also positive for younger adults with health insurance covers because they gain benefits from every year they do not claim any medical costs.

Health insurance policies, nowadays, also cover dental, maternity and OPD treatments, which is an essential for the youth who is vulnerable to injuries, accidents and other unknown exigencies.

Health cover portability: Last but not the least, the new regulation on portability provides an option to switch insurance companies. Customers can now move away from previous negative experiences and ‘shop’ for a ‘better’ insurance provider.

For customers, the portability regulation is a ‘win-win’ situation. Customers can choose quality products with benefits and features that are best suited for them, rather than just opting for the lowest premium products with least benefits. Customers can compare products and their benefits, waiting periods, exclusions and inclusions and then decide on the one that suits them and their families.

Customers can also move to another insurance company for higher sum insured levels, type of policy, such as individual to family floaters or even choose those insurers who offer a better and wider network of healthcare providers in the country.

Predominantly, portability is expected to raise insurance companies’ existing levels of service standards. It is imperative that portability should be viewed on a holistic basis, where insurers will be able to build transparency in their procedures and processes and can then proactively build up value offerings to ensure customer satisfaction.

To conclude, it can be said that in order to counter the changing dynamics of today’s poor lifestyle, an early health insurance cover is vital for every Indian. It will go a long way in assisting individuals and families in caring for themselves and stay healthy in the long run. Insuring one’s health early on in life is ultimately beneficial for oneself, one’s family and society as a whole.

(The writer is the CEO of Apollo Munich Health Insurance)

2011 Saw More Health Cover Options

Dipta Joshi / Mumbai December 28, 2011, 0:08 IST

The year 2011 had plenty in store for health insurance customers. Health portability, introduced in the later half of the year, empowered choice between insurers. Even otherwise, lack of choice was not a complaint. Apart from general and standalone health insurers, life insurers also launched health plans and product innovation became the differentiating factor, especially for newer entrants like Bharti AXA Life insurance, IndiaFirst life Insurance and L&T General Insurance.

However, with the product innovations here to stay, one cannot overlook the fine print attached to these.
Features: "There was not much novelty in basic health insurance products during the year but there was active interest in bringing innovation to a policy, like inclusion of lifelong renewal, critical illnesses coverage, top-ups and so on." says Antony Jacob, CEO, Apollo Munich Insurance.

However, with more features, premiums got higher, outside the range of most. For instance, L&T General Insurance's 'Medisure Prime' offers 22 features, including benefits similar to cashless hospitalisation, personal accident cover and critical illness benefit policies. However, while it charges Rs 10,174 for a sum insured of Rs 5 lakh for a 30-year male based in Mumbai, a basic Mediclaim from Apollo Munich for the same would cost Rs 5,908.

Parental cover: As costs related to employee health policies went up, employees were expected to chip in for group policies that include parents. Some employers tied up for special policies for the employee's parents. The benefits are similar to what group policies offer, such as no waiting period, plus coverage for pre-existing diseases, but the premium is high. So, a policy for a sum assured of Rs 1 lakh can set you back by Rs 12,000-15,000 for parents aged 60 years. Bajaj Allianz General Insurance says you would have to pay Rs 5,130 for the same cover under its Individual Health Guard policy.

Diseases covered: Select insurers widened the coverage of ailments and lines of treatment, including dental, maternity and vision care treatments, otherwise excluded. Another focus area was the increased number of ailments and critical illness (CI) covered.

However, Pankaaj Maalde, head-financial planning,, feels customers need to be aware of the difference between an ailment and a critical illness. There are not more than 13 critical illnesses but CIs can result in loss of income, which impacts customers. So, one must choose plans that cover a higher number of CIs, rather than ailments, is his advice. "Not only should CI (cover) be bought as an add-on to a basic mediclaim policy, but it should be in the range of 33 to 50 per cent of one's life insurance need. So, suppose your life insurance need is Rs 60 lakh, the CI should be between Rs 20 to 30 lakh," adds Maalde. At present, the maximum cover available is only Rs 50 lakh.

Also plans with higher disease coverage could have clauses that may not always work in the customer's favour. For instance, Bharti AXA Life's Triple Health Plan covers 13 CIs and allows three claims under the same policy. Yet, it has classified the list of illnesses into three groups and a claim can only be made for one illness from each group. So, if the customer has already made a claim for a heart attack which belongs to group A, he will not be covered for a coronary artery bypass or heart transplant that fall in the same category.

Top-ups: Though top-ups were not really a new introduction, the number of companies offering it went up. For instance, Apollo Munich offered Optima Plus, under which the top-up plan can be converted into a regular cover at age 58, when the employee would retire.

While this is a good interim solution for those who cannot stretch their medical cover beyond that offered by the employer, it may end in restricting oneself to just one insurer. Portability guidelines do allow one to shift to another insurer, but the application will be subject to the insurer's underwriting norms. Even if the application is not rejected, the higher the age, the higher the premiums charged and the number of exclusions.

Wellness products: Another area of interest for insurers has been health-related risk mitigation. "Going beyond health insurance, a significant minority of employers are investing in wellness programmes around employee health as a pre-emptive measure. Similarly, insurers are also providing wellness incentives for retail insurance plans to encourage healthy behaviour," says Arvind Laddha, CEO, Vantage Insurance Brokers.

For instance, Tata AIG Wellsurance offers a free health helpline and personalised health tracker on its website, discounts at spas, weight management centres and so on.

Beginning of a health insurance decade

2011 was a positive start to what we believe to be the Health Insurance Decade (2010-2020). Concepts such as health insurance portability and bancassurance have been topics of general conversation, which is a great sign for the times to come.

The Union Budget provided the required sense of direction for higher trajectory growth. Since a vast majority of the Indian population lives below the poverty line across the country, the government's plan to increase health allocation by 20 per cent and widen the scope of the Rashtriya Swasthya Bima Yojana (RSBY) is a positive move and is expected to bring in more opportunities for insurance penetration.

The total allocation for the health sector was hiked to Rs 26,760 crore as compared to Rs 23,530 crore last year. The Union Budget proposed to bring diagnostic tests and hospitals with 25 or more beds with facility of central air conditioning under the service tax regime, resulting in an additional burden for the consumers opting for reimbursement claims under insurance plans and also hurt those going for medical treatment without cover.

Due to the concerns of affordability by the general public, this proposal was squashed later in the year. Additional tax benefits from choosing health insurance policies did not find any mention in this year's budget.
In June, the health insurance sector and the general public awaited the Insurance Regulatory and Development Authority's (IRDA) guidelines on health insurance portability and its implementation. Due to unresolved operational issues, the implementation of health insurance portability was moved to October 1, 2011.

From October 1, 2011, health insurance policyholders were able to port their existing policies to another insurance company, without losing out on the benefits accrued. While people are still unsure of the portability process, many customers have come forward to port and are choosing insurance providers based on service quality standards and products and benefits. Portability brought with it increased levels of standards amongst insurance companies and allows for more cooperation in information sharing between the players.

The second half saw IRDA issuing draft regulations for the licensing of bancassurance agents, primarily to increase access to better healthcare. Today, the gap between the total cost of healthcare incurred by the population and the amount covered by health insurance is as high as $57 billion. Healthcare is an enterprise that is growing rapidly, and spends in this sector will soon touch $200-250 billion.

2011 also saw the entry of a few more players in this segment as well as some product introductions. All these have helped to increase awareness levels across the country, thereby allowing for a better informed customer who will choose a health insurance policy, purely on his or her individual and family requirements, rather than a low premium.

2011 was a year where the health insurance segment leapfrogged over the past few quiet years. We expect to see more players, more innovative products and increased positive regulations from the regulator in order to ensure that gap between healthcare spending and total health insurance coverage reduces sooner, rather than later.

Soon, banks to sell specialised health insurance products

You may be able to bring home a comprehensive health plan from a specialised health insurance company from your regular bank branch, if the IRDA's bancassurance draft guidelines are implemented.

As a customer your choice of health insurance products are now wider. That may not necessarily come cheap. But it is good news for standalone health insurance companies, such as Max Bupa, Apollo Munich and Star Health, which will benefit from the IRDA's new guidelines (on insurers' tie-up with banks for distribution).

Under the existing bancassurance guidelines, banks were allowed to tie up with one life and one non-life company. Banks preferred partnering insurers offering multi-line (high ticket) products such as motor and fire insurance.

But now they will be able to tie up with one insurance company in the life, non-life and specialised health insurance space. They will, however, be allowed to do it only in a specified number of States.


At the same time, specialised health insurers can also now tie up with multiple banks for selling their products across different States.

“It is an exciting opportunity for us and these guidelines definitely do open up the bancassurance channel for us,” said Dr Damien Marmion, CEO, Max Bupa Health Insurance.

The guidelines have further stipulated that if general insurer does not have any health product to distribute, the bancassurance agent may tie up with one more general insurance company, carrying on exclusively the business of health insurance.

Experts from the insurance industry feel that apart from opening up the avenue for health insurers, the guidelines will also help boost health insurance in the under-penetrated Indian market.

“We welcome any initiative that promotes access to better health care for the people. Today, it is estimated that the gap between the total cost of healthcare incurred by Indians and the amount covered by health insurance is as high as $57 billion,” Mr Antony Jacob, CEO, Apollo Munich Health Insurance.

7 Things You Need to Consider While Porting Insurance Policy

You can now officially bid goodbye to the days when you had to continue with your health insurance plan for the sake of accumulated benefits and time-bound coverage. With the new portability regulation in place, if you experience a gap between what is promised and what is delivered by your insurance company in terms of service or benefits, you can choose to move out and opt for a similar plan with any other insurer of your choice, while protecting the accumulated benefits of the existing health insurance policy.

The change is expected to bring in minimum service requirements amongst all insurance players, which, in turn, will have a positive impact on customer service. New benchmarks in terms of service standards and delivery mechanisms for the insurance players are expected to come into existence . While portability may seem like an ideal choice for all those who are looking for a superior level of service and benefits, many factors must be considered before one takes the decision to port.

Here are a few facets that should be kept in mind while making the choice to switch an insurer.

Regular features

Does your health insurance policy cover both hospitalisation and day-care procedures and without any sub-limits ? If not, look around and find one that offers all these benefits.

Do remember that all the policies are different and are governed by their underwriting principles. Hence, you should choose the one you deem fit.

Age limit for renewal

Does your current policy have an age limit for renewal? If there is a cut-off age, then look for an insurer who offers life-long renewal.

This is crucial to ensure health insurance coverage when you need it the most, as during old age, health deteriorates.

Claims-led rise in premium

Does your insurance company load your future premiums in case you make a claim in the current year? You can search for insurance companies that do not place additional loading on premiums for claimed years.

Room rent limits, co-payments and sub-limits on treatments

Some insurance companies have daily limits on hospital room rents, while others offer sub-limits.

You can choose to port to an insurance company that does not make any restrictions on the type of room customers choose.

Cashless or reimbursement

What is your mode of payment and collection of medical expenses currently? Do you have to pay first and then submit bills or are you able to avail of cashless facilities?

With age, ailments and concerns also rise. You may choose to opt for a cashless policy that will free your mind of payments, at the time of a medical emergency.

Increasing coverage without restriction

In addition to life-long renewal, does your current policy allow for an increase in coverage with progressing age? With medical inflation rising consistently, your current medical cover may be insufficient in the future, when you are likely to require a higher cover.

Your plan should allow an increase in cover without any new conditions or restrictions.

Network of hospitals, doctors

Have you faced problems in getting cashless claims or too much time was taken to close on a decision? In case it's a yes, then review your current insurance company's network and compare it with other insurers who have larger and widespread coverage.

At the time of emergency, it is important to rush to the nearest hospital, rather than looking for a hospital which is covered by your insurer.

So if you have made up your mind to change your insurer, the first step should be to fill up and submit the proposal form of the insurer of your choice, along with the standardised portability form. On receiving a request for portability, the incumbent insurer will underwrite as per their guidelines and will inform you on the final decision within a stipulated time frame.

It is advisable to start the process at least 45 days before your premium is due in order to take an informed decision and hedge the risk of a break in coverage at any point in time. And a final piece of advice: do not choose to port to a lower premium cover, as you may lose your benefits and features previously enjoyed!

Healthy Covers

The country’s health spend as a percentage of the gross domestic product may be one of the lowest in the world, but the business of health insurance is getting healthier by the day.
While countries like Canada and the US spend 17.9 % and 19% of their total yearly budgets on health care respectively, in India it is only 34 %.

However, factors like rising income levels and a growing elderly population are driving the growth in the industry. In addition, changing demographics, disease profiles and the shift from chronic to lifestyle diseases has led to increased spending on healthcare delivery.

“The highly competitive and stressful times are definitely taking a toll on the health of our people. The problem gets magnified among the youth. For example, a young heart is far more damaged and suffers a more dangerous heart attack than that of an older person,” explains Dr Ramakant Panda, an eminent cardiac surgeon, who performed a bypass operation on PM Manmohan Singh.

With 80% of all health expenditure borne by patients and their families, the importance of adequate planning for health contingencies cannot be overemphasised, especially given the steep escalation in healthcare costs. Inflation in medical costs has been running in double digits—higher than overall inflation—for the past four years and is scorching the middle class and the poor alike, a survey by global consultancy firm Towers Watson has found. Worse, the situation is not going to get better any time soon.

The health insurance business, which has been predominantly within the non-life sector as part of the miscellaneous accident portfolio, has emerged as one of the most promising growth segments with increase in not only number of products but also in the number of insurance companies, including life insurers and stand alone health insurers, venturing into the health insurance market.

With increasing focus on health care in the country, health insurance in a very short span of time has emerged as the second largest portfolio in the domestic general insurance industry. With a premium size of almost R10,000 crore, the segment is witnessing a growth of 25% and insurers say in another two years it will be the single biggest premium driver in quantum accretion. As far as growth rate is concerned, it has already beaten motor business, which contributes the largest premium income for general insurers. The health segment contributed over 22% of the total premium in 2010-11 (21.06% in 2009-10). With increasing demand, the health insurance industry is launching innovative products and improving the post-sales services with a sophisticated IT back up to enable policyholder to plan comprehensive protection against health eventualities by combining hospitalisation indemnity products with supplementary covers or additional policies to meet specific needs of the policyholder.

In their second round of revamping the claim services, some of the general insurers are even offering cashless service to enable a policy holder’s hospital bills to be settled by insurers through a professional middle entity called Third Party Administrators (TPA) without even involving the latter to take direct responsibility of such services.
Two top private sector general insurers—ICICI Lombard General Insurance and Bajaj Allianz General Insurance—have even done away with the services of TPAs.

Bajaj Allianz General Insurance has gone for automation of cashless management process which, the company says, has resulted in a drastic improvement in the response time to 40 minutes as on date. The company now directly transfers the claim amount to the insured accounts and also provides SMS alerts to the insured at important stages in the claims process.

One of the latest entrants in health insurance space is L&T Insurance, which has launched a unique product to allow customers to buy a policy till the age of 60. The policy, called Medisure Prime Insurance, can be renewed as long as the customer survives and the premium will not increase annually after the policy holder turns 80 years of age.

The company has chalked out a strategy to focus exclusively on the retail segment. Y M Deosthalee, CMD, L&T Insurance, says the products would cater to individuals rather than the corporate or group health segments where it is a tad more difficult to make profits.
“Retail health insurance if sold carefully is a profitable proposition,” says Deosthalee, pointing out that with the rise in the standard of living as also in the cost of healthcare, the need for health insurance is rapidly increasing.
“The policy provides an additional cover equivalent to the sum assured for the treatment of a critical illness,” adds Joydeep Roy, CEO, L&T Insurance, adding that at least 22 features have been built into the product to address both problems of health and services.

The largest private sector general insurance company, ICICI Lombard General Insurance company, has seen a good response for one of its products called Secure Mind. It is basically a packaged and benefit product, which is offered with loans availed by customers from financial institutions and serves as a financial protection to them along with the benefits of a health insurance product. The product provides the coverage for nine major medical illnesses and procedures like cancer, end-stage renal failure, multiple sclerosis, major organ transplant, heart valve replacement, coronary artery bypass graft, stroke, paralysis, myocardial infraction and death and permanent total disability due to accidents and loss of job.

This product is a benefit product where the sum insured is paid as a lump sum. For the loss of job cover, the company pays three EMIs. For a person aged 37 years, with the insured sum of R25 lakh and a tenure of five years, the premium for Secure Mind works out to R75,250.

“The product is a win-win proposition for the customer and the financial institution. In the event of the claim, we pay the lender whereby the customer is relieved of the loan and the FI’s loan book is also secured,” says Sanjay Datta, head, customer service, health and motor, ICICI Lombard General Insurance.

Similarly, Antony Jacob, CEO, Apollo Munich Health Insurance, says his company’s policies promise to refrain from loading any customer at the time of renewal in case of a claim or even worsening of his/her health condition after taking the policy.

“We believe loading applied on an individual customer due to claims is unfair as it would make it all the more difficult for the customer to continue his cover (due to the high cost added to the premium) at a time when he is more likely to be hospitalised or has taken ill.

Also, Apollo Munich’s policies offer 100% lifelong renewal, without any co-payment or sub-limit options, regardless of the size or nature of claim made during the tenure of the insured period or due to any change in the member’s health status after he or she joins. “This is a unique feature that Apollo Munich has offered for the first time in the marketplace,” says Jacob.

Unlike most plans available in the market, Apollo Munich also extends cover for expenses related to dental and optical care as an added benefit within its Easy Health plan for certain variants.

Regulatory Initiatives 

The segment regulator IRDA has been consistently attempting to address and resolve the key issues faced by health insurance sector. One of the initiatives has been the creation of a checklist for facilitating processing of health insurance products filed by non-life insurance companies. The checklist is created by analysing the observations of the health section over the last two years, across various categories of health products.
The checklist is intended for self-administration by companies for products filed by them so that the inconsistencies are eliminated at their end before the documents are submitted to IRDA. Based on the checklist and as a step towards creating an online library of products, the health section has designed a product database that would capture all important features of health products to the granularity of sub-limits, age-wise premium rates and exclusions.

In addition, once the software is put into place and the data keyed in for health products, the product database will enable IRDA to perform comparative analysis across all health products, says J Hari Narayan, chairman, IRDA.

All these initiatives are set to be introduced in due course and also online filing of health insurance products by insurance companies.

While processing health products under the existing file and use (F&U) formats, health section has recognised the need for more health specific information from insurance companies at the time of filing of products. Taking cognisance of this and with a view to enhance the health product processing, the health section has re-designed File & Use formats (where insurers have to first get approval for the products from the insurance regulator) for filing of health insurance products.
Hari Naryan explains, “While insisting on the sustainability and viability of the products with respect to the rates and discounts filed under File & Use procedures, the authority also requires the insurance companies to submit their past experience on similar products and their analysis to support the price mechanism filed by them.” He adds, “As more people buy health insurance to meet the requirement of funding health care for themselves and their families, the necessity of a close monitoring of the pricing mechanism of health products by the insurance regulator becomes important.”

Health Insurance Portability

Further, insurers expect health insurance portability (HIP), which came into force on October 1, to be a game changer in domestic health insurance industry. According to general insurers, health insurance portability, though more complex than mobile number portability, is likely to see a greater response.
Neeraj Basur, CFO, Max Bupa Health Insurance, says, “The industry is likely to witness some migration as HIP allows policyholders, locked in their existing health insurance policies, to evaluate other options, without fearing the loss of benefits for the waiting period served with their existing insurer.”

Jacob, on the other hand, maintains the move will raise service standards and see increased competition among insurers to retain their existing customers. “The regulation is expected to bring in new benchmarks in terms of service standards and delivery mechanisms for insurance players. In the long-run, a company with better services will gain the trust of customers,’’ says Jacob.

Datta of ICICI Lombard General Insurance says that a common data sharing platform will help all insurers access information pertaining to portability. However what will decide the fate of the health insurance business is customer satisfaction from the services point of view,” says GV Rao, a former CMD of state owned Oriental Insurance.

At present customer dissatisfaction is really rampant despite tall claims by insurers. Insurance regulator has an important role to play and its timely intervention can assure customers and help the business to grow,” adds Rao.

It's bound to happen sooner than later because health insurance provides a common platform for all segments of health care providers like hospitals, doctors, pharmacists and above all insurers, and it's in their interest to transform the health care industry keeping in view the rising customer expectations.

Don’t Let Existing Diseases cut into your Health Cover

Don’t Let Existing Diseases cut into your Health CoverIndia is called the world’s diabetes capital. As per estimates, about 10-12 per cent of India’s urban population is suffering from diabetes. The numbers are expected to shoot up, given the sedentary lifestyle, lack of physical activity and a balanced diet. Statistics for hypertension and heart-related ailments are equally alarming. Increasing cost of healthcare has made health insurance cover a necessity. But, do insurance companies provide health insurance coverage to those suffering from a pre-existing disease?

The answer is a conditional ‘yes’. As per the Insurance Regulatory and Development Authority (Irda) order, insurance companies will have to provide health insurance to those suffering from pre-existing diseases after a waiting period, although, they are allowed to load additional premium to cover known ‘risks’.

What is a pre-existing disease? A pre-existing disease is defined as any known medical condition, ailment or injury or related condition(s) one has suffered within 48 months prior to the commencement of the health insurance policy. Pre-existing diseases are not just serious ailments, such as a heart condition or cancer, it can also be hypertension, asthma or diabetes or any previous injury.

Before taking an insurance cover, as a part of underwriting process, one has to make health declarations. It is important to make full and correct disclosures to an insurance company in the policy proposal form, because not doing so is considered a fraud. If at the time of a claim, the insurance company finds out that information was deliberately hidden, it can reject your claim and leave you in soup.

“It is always advisable that the policyholder undergoes a medical examination before taking a new health insurance plan. That way, the insurance company is aware of the medical condition of the policyholder beforehand and conflicts are reduced during the claims process. Also, depending on the policyholder’s medical records, an insurance company can either charge extra premium or impose permanent exclusions on certain diseases and ailments related to that disease,” said Antony Jacob, chief executive officer, Apollo Munich Health Insurance.
Insurance companies are wary of issuing health cover to those suffering from pre-existing diseases because the risks and likelihood of claims are higher. Insurance coverage of pre-existing diseases starts after the waiting period is over without a break in the policy. Waiting period is between two-four years, depending on the insurance company. It also varies with each ailment.
“Supposing, the policyholder has a pre-existing disease and takes a new policy, then he may file a claim for the pre-existing disease after the specified waiting period, even if he suffers from the same condition during the waiting period. However, the insured cannot file a claim for the disease during the waiting period,” said D Rama, assistant vice- president, product cell of Star Health and Allied Insurance.

If you are suffering from a pre-existing condition, check out the coverage and premium offered by specialised health insurance companies, such as Max Bupa Health Insurance, Star Health and Allied Insurance and Apollo Munich Health Insurance. They may offer you a better deal.
Disclosures: Most claim rejections by insurance companies are on account of pre-exiting diseases. While, insurance companies claim that the policyholder intentionally did not disclose the condition, it is possible that the policyholder was not aware of his condition.

Often, insurance agents dissuade customers from making a full disclosure, citing it as a reason for rejection of the policy. Setting aside such allurements, making disclosures would make filing your claims easier.

Coverage of pre-existing diseases varies from company to company. If you are looking at health cover for a pre-existing disease, do your homework. Get in touch with more than one insurance company and understand the terms and conditions. Some companies may give you partial cover for pre-existing diseases. It may be better to pay a little more and take full cover for pre-existing diseases. Reading the fineprint with emphasis on exclusions in your policy would be important. Even after enrolling yourself, if you are not happy with terms sand conditions, you can return the policy during the free-look period within 15 days and get a refund.

“Cataracts, hernia, piles, arthritis, sinusitis are generally excluded in the first year of the policy. Major life-threatening, pre-existing diseases are generally covered after four years. If the insurance company covers a pre-existing disease, then related ailments are also covered under the policy. Insurers generally decline 3-5 per cent of claims because the insured had either not declared the pre-existing diseases or supporting documents related to the ailments were not furnished,” said Sanjay Datta, head customer service, ICICI Lombard General Insurance.

Portability: To provide an option and flexibility to health insurance customers, beginning October 1, health insurance portability was introduced. Health insurance customers can switch between companies, along with all the benefits including the no-claim bonus option and most importantly, benefits, such as waiting period for pre-existing diseases. Policyholders will be allowed to carry forward the waiting period to the new insurance company. For example, the waiting period for a pre-existing disease does not change by switching to another company. If the waiting period is two years, it will remain the same irrespective of the company that covers the customer. Under portability, a customer needs to approach a new insurer within 45 days before his policy renewal date.

Refusal: Some insurance companies can refuse health cover to some pre-existing chronic ailments, citing those particular diseases as permanent exclusions. Each insurance company has a list of permanent exclusions. All insurance policies are issued at the discretion of the insurance company and as such, a company can decline your policy proposal on a case-by-case basis. Companies provide health cover based on their risk perception.

Group insurance schemes: Pre-existing diseases are generally covered in group insurance plans from the first year itself. If you have a group cover, mostly funded by employers, do find out about the inclusions and exclusions. In some group insurance policies, there is an option to co-pay for pre-existing covers, where in case of a claim, the cost will be shared by the insurance company and the insured.

Travel insurance: Pre-existing diseases are generally excluded from travel insurance policies. In case of hospitalisation during travel abroad, your insurance companies may reject claims. However, some companies such as Bajaj Allianz General Insurance have started covering pre-existing medical conditions also in travel insurance. If you are suffering from an ailment, it is better to check with the insurance company if it is covered, only then, you should buy a policy. ICICI Lombard General Insurance covers pre-existing diseases in life-threatening emergency situations.

Past treatment: A lot has changed with respect to treatment of pre-existing diseases by insurance companies. Earlier, due to ambiguity in the definition of pre existing diseases, companies rejected claims citing conditions.

From a customer’s perspective, however, the concern expressed is that some insurers are using the concept of “pre-existing condition” as an unfair means to deny or reduce coverage or payment. Such practices affect the credibility of a health insurance product and are one of the potential reasons for lack of acceptance/popularity of health insurance products in India.
To check malpractices and offer uniformity in health insurance policies, the General Insurance Council (GIC), a statutory body for all non-life insurers, has come out with a uniform definition on pre-existing diseases. Also, all policies issued from June 1, 2008, will cover pre-existing diseases from the fifth year of the policy. By the new standard definition, pre-existing exclusion means “the benefits (of health insurance) would not be available for any condition, ailment or injury or related conditions for which the insured had signs or symptoms, and/or was diagnosed and/or received medical advice/treatment, prior to inception of the first policy, until 48 consecutive months of coverage have elapsed, after the date of inception of the first policy”.

Switch Health Insurer in Case of Gap Between What is Promised and Delivered

Health insurance portability has had a slow takeoff since it became operational on October 1. But industry players say with a little discretion, customers can make good use of this facility to draw maximum benefit from their health insurance plans. Antony Jacob, CEO of standalone health insurer Apollo Munich Health Insurance explained the many nuances of health insurance portability in an interview with Excerpts:

What are the advantages and disadvantages of health insurance portability?

Portability is a customer centric decision that allows flexibility to the insured member to choose between insurance brands during the lifespan of being insured. The move is expected to enhance service standards amongst all insurance players while increasing the level of competitive intensity among insurers in order to retain their existing customers. In the long run, it would be the company with better services that will gain by winning the trust of customers.

On the flip side, it would be imperative for all insurance players to be mindful of the possible abuse and misuses that may arise due to the changes in the regulation. Underwriting principles of the insurance companies should be followed with at the time of accepting any proposal with portability requests to ensure that transition is smooth.

One possible consequence of portability is that loss ratios may go up as reserves accumulated for waiting periods and pre existing conditions are not transferred equally among insurers.

Under what circumstances should you go for a portability of your existing policy?

Portability permits customers the flexibility to switch insurers and simultaneously protect their accrued benefits under an existing health insurance policy. It also allows customers’ protection against discontinuity and consequential loss of pre-existing diseases cover.

Hence, in case the customer perceives a gap between what is promised and delivered by an insurance company in terms of service or benefits, he or she can now move out and opt for a similar plan with other insurer of his or her choice.

What should you look at before deciding on the new health insurer while going for portability?

Customers should keep in mind that every policy is different and each insurance company is governed by their underwriting principles. Hence they should choose the one they deem fit and take an informed decision.

The new regulations suggest the customer can choose the new insurance plan in totality (both in terms of the premium amount, as well as the benefits offered). Hence, it is important for the customer to completely understand the benefits as offered under their existing policy and subsequently match them with the plan that they wish to port to.

We strongly suggest that once a customer takes an informed decision and receives cover by an insurer, the person should read through the policy schedule and policy wordings document. Like we do at Apollo Munich, many other insurers have also started to give a synopsis document (customer information sheet) along with the policy wordings which would help the insured (customer) to quickly understand all the coverage and exclusions.

We strongly suggest the customers to take an informed decision while exercising the right to port from one policy to that of another. Although tempting, porting to a lower premium product is not safe as one may reduce their benefits as well as inclusions, exclusions, waiting periods, etc while opting for a lower value products.

What if you own a unique product and you don't have a similar alternative with another insurer to go for portability? Can you still do it?

As per the guidelines on portability issued by IRDA, the policyholders can port their policies to another insurer with the pre-existing conditions and time bound exclusions; only for a similar policy offered by the incumbent insurer. Having said that, I believe with more than 25 companies offering health insurance plans the chances would be very less for a customer to not being able to find a plan that suits him the best in terms of value and service promises.

How often should you review your health insurance portfolio and what are the things to look at?

We believe that one should review his or her health insurance policy on the basis of benefits, exclusions and adequacy of the plan, on renewal. Also, one should consider a review in case he or she wishes to convert an individual policy to a family floater or to endorse new family members on an existing plan.

With progressive age and inflation, one should consider increasing the sum insured levels to ensure adequacy of the plan at the time of crisis.

Lastly, how to ensure a relatively hassle-free health insurance for yourself?

It is imperative for a policy holder to read and understand the claim procedure laid down by the insurer at the time of buying a policy. It helps in reducing the panic at the time of emergency. Also, we advise customers to provide correct information related to occupation, income, diseases, if any, while applying for insurance. Any misleading declarations could lead to denial / delay of claim later on.

In order to avoid hassles at the time of filing a claim, the beneficiary must intimate the insurer as soon as possible on the insurance company’s/claim’s toll-free number, preferably before hospitalization. The claimant should consult the call center executives of the company while filing the claim/pre-authorisation form, as they are well-trained to explain the right procedure for filing the same.

Why Switching Insurers may not be Smooth

While portability offers greater choice to customers,certain grey areas need to be addressed before buyers can benefit from the change.

Health insurance portability has finally become a reality.You can switch from one insurer to another without losing out on accumulated benefits.The Insurance Regulatory and Development Authority (Irda) has also put into place rules to make the process smooth for the customer.For instance,if an insurance company does not respond within the specified time,it will be assumed that the proposal has been accepted.This clause will make the portability process very quick and efficient, says Mahavir Chopra,head,e-business,Medimanage.

Also,the Irda guidelines allow a switch from a group mediclaim to individual or family floater policies,and allow the policyholder to retain the waiting period credit.Since many families depend solely on their employers group policies,such transfers will help them buy polices on their own without having to wait for four years before pre-existing diseases are covered.

Will it really help 

While Irdas diktats are welcome,portability should not be regarded as panacea for all the grievances of policyholders.Portability of a health insurance policy is attractive only on paper, says consumer activist Jehangir Gai.As long as a policy is profitable,every insurance company is good to the insured (when there is no claim,there cannot be any dispute).

He points out that only after a claim arises do insurance companies get worried about repeated subsequent claims.It is then that the company starts nitpicking and the customer considers migrating to another insurance company.

The catch is that portability is not a matter of right.It is up to the new company to accept or reject a proposal.Which insurance company will want to take on the liability of an onerous policy asks Gai.There are other issues,too.Many feel that insurance companies will outrightly reject the proposals of senior citizens,who are seen as a high-risk category,thus defeating the purpose of portability.

Besides,for those who have accumulated a no-claim bonus,portability could turn out to be a loss-making proposition.As per the Irda circular,the no-claim bonus can be carried forward to the new policy,but the premium charged will be for the enhanced sum assured.This means that the policyholder will have to pay a higher premium if he wants the same insurance cover under the new policy.

Arvind Laddha,managing director & CEO of Vantage Insurance Brokers,points out another aspect that could go against the policyholders.When the customer migrates from a group to an individual cover,he will get credit only for the period for which he has been insured with the current group insurer.This seems like a
compromise for the insured,especially if he has had no claims with the previous insurer, he says.Policyholders should also remember that they can migrate only to the individual policy offered by
the same insurer.After a year of continuing with that policy,they will be free to move to any other insurance company.

Not all black and white 

In certain cases,there is confusion over the definition of pre-existing illnesses.If a policyholder has undergone treatment for a disease and his insurer has settled the claim,will the new company,to which he decides to migrate,deny cover for the disease for which a claim has been made This is a grey area that needs clarity.If the new insurer does not offer a cover without a waiting period for ailments suffered during the tenure of the old policy,then senior citizens and others with chronic ailments will not be able to enjoy portability in the true spirit, says Chopra.

If the new insurer is aware of the fact that the policyholder was suffering from a pre-existing condition and decides to accept the proposal in practical terms,it will be difficult to reject a claim on the grounds of pre-existing diseases, says Subrahmanyam B,head,health insurance vertical,Bharti-Axa General Insurance.
However,Gai says the new insurer will have to extend the cover to these illnesses too.If a disease is listed as pre-existing in the current policy,the new insurer will also treat it as pre-existing.

The waiting period for preexisting diseases is across insurers.Therefore,if the new company accepts the risk,pre-existing diseases would be covered, says Antony Jacob,CEO,Apollo Munich.It seems health insurance policyholders will have to wait for some more time before they have complete freedom of choice.Till then,they should make the most of the benefits offered by portability.

Whats good about portability 

It allows policyholders to switch to another company and carry forward the waiting period credit for pre-existing diseases.If the new insurer does not respond to the portability application within the stipulated time,the proposal is considered to have been accepted.Even the policyholders who are covered under employers'group mediclaim can transfer the waiting period credit and move to individual or family floater health policies.

The limitations 

An insurance company can reject a proposal for a switch.Those in risky groups,especially senior citizens,may not be accepted by any insurance company.Insurers are free to levy premium as per their underwriting norms.Hence,those in high-risk categories should not expect a reasonable premium while porting.Customers with an accumulated no-claim bonus could be at a disadvantage as the new insurers will levy the premium applicable to the enhanced sum assured.While migrating from a group cover,the customer will have to first switch to an individual cover of the same insurer.Only after a year can he move to an insurer of his choice.The guidelines are confined to PED cover credit.They are silent on how other features,such as exclusions and loading clauses,should be factored in.

Grey areas that require clarity 

Insurers should clear the migration proposal within a specified time,but there is confusion over the prescribed time limit.Some say this period is 15 days,others believe it is 35-40 days.Also,its unclear if the new insurer should immediately cover the diseases contracted during the existing policys term.

What you should know 

Submit the migration proposal 45 days before the renewal of your existing policy.Porting will be possible only if the policies are maintained without a break.

Health Insurance Goes Portable

Eshwar Bharadwaj Chand often runs into trouble with his existing health insurance provider.  A resident of Ahmedabad, the 62-year-old travels to Delhi for chemotherapy at a corporate hospital every month. The problem arises while making claims from his insurer in Ahmedabad. “The settlement is invariably delayed. Every time I make a claim, it goes to the local branch and, then, to the Delhi office. I have to keep following up with the local representative to ensure that the documents don’t get misplaced. I’m fed up and want to switch to another insurer but, considering my age and pre-existing problems, I stand to lose a lot,” rues Eshwar.

Not anymore. With health insurance portability coming into play in October, policyholders like Eshwar can happily switch to another insurer without losing out on any benefits. “In case a customer believes there is a gap between what is promised and delivered by an insurance company in terms of service or benefits, he or she can now move out and opt for a similar plan with another insurer,” says Antony Jacob, CEO, Apollo Munich Health Insurance.

Prior to portability, if policyholders were not content with their insurer, they had to buy a fresh policy from another provider and go through the requisite waiting period (ranging from one to four years depending on the nature of the pre-existing diseases) to avail the benefits.

“Earlier, customers looking to switch insurers were at the losing end when it came to coverage for pre-existing illnesses and time-bound exclusions. It has now been clarified that policyholders have the right to transfer the credit gained by them for pre-existing conditions and time bound exclusions,” says Subrahmanyam B, Vice President & Head, Health Vertical, Bharti AXA General Insurance.

Benefits of porting include cumulative bonus acquired from the previous insurer. For example, if you are paying a premium of `1,000 for a `1 lakh health policy with zero claims in the past three years, you will continue to pay `1,000 even as your cover gets enhanced to `1.3 lakh. Earlier if you switched insurers, your cover would  remain `1.3 lakh, but you would have to pay a higher premium of, say, `1,300 as the no-claims bonus would  not be carried forward.

“Your earned cumulative bonus may undergo a change based on the portability and underwriting guidelines of the new insurer. Ensure that you get complete advantage of all existing benefits before porting your policy,” says TA Ramalingam, Head, Underwriting, Bajaj Allianz General Insurance.
However, you cannot switch insurers any time you want. You need to apply for portability 45 days before renewing your existing policy. According to Sanjay Datta, Head, Customer Service, Health and Motor, ICICI Lombard GIC, health insurance should be viewed as a long-term relationship and a customer should not switch just because of pricing or loading due to a claim. “One should evaluate the product features and service levels according to one’s requirements and switch only if there is a marked
difference in any of these parameters,” he reasons.

Insurers believe portability will improve customer service standards, and enable an easier buying process, prompt delivery of policy document and hassle-free claims.

“Portability will also serve to improve service standards in the industry as companies run the risk of losing customers if they fail to deliver on service parameters, whether it is in relation to documentation or claims,” says Subrahmanyam. “Portability will also improve innovation in the industry. Companies looking to differentiate themselves will be required to come up with new products and add-ons to attract customers.”

Insurers may even begin to customise products, while some features such as covering doctor consultation fee, transportation and accommodation costs may become tandardised. Going further, they may start aggressive pricing to attract new customers while retaining existing ones.

“We have an inhouse set up for claims processing last November and our efforts are to provide better services to customers. With our service levels increasing, we do expect customers to come to us. The shift will be mainly in our retail portfolio and we expect at least 10 per cent growth in new members due to portability,” says Shreeraj Deshpande, Head, Health Insurance, Future Generali India Insurance Co Ltd.

Get the Right Health Insurance Cover Under Portability

Until portability was allowed for health insurance, customers were wary of shifting to a new insurer, even if they were unsatisfied with the existing one. The fear was the loss of accumulated loyalty benefits or having to begin the waiting period for existing diseases afresh. But now, with the option of health portability in place, they can right their wrongs. However, it would be wise to keep a few factors in mind before shifting to another insurer.

“Customers can only take the policy in totality. So it’s important to understand the benefits offered under the existing health policy and to match those with the plan one wishes to port to,” says Apollo Munich Health Insurance CEO Antony Jacob.

Those planning to port their services should look for an insurer with a good track record in claim settlements and a large network of hospitals. Besides these, there also are other conditions that should be looked up to avoid being in a spot when making a claim.

Additional loading: Typically, if you have a hospital cash cover, you can opt only for a similar cover with another insurer. Going by the apples to apples logic, there may not be a wider scope for added premiums or loads on renewals.

But insurers say every portability request is considered as a new application. So, if a customer is considered a high-risk person under an insurers’ underwriting norms, he may be asked to pay a higher premium or extra loading. In such cases, unless the insurer is offering a better cover, you should not port your services in a haste.

Co-pay and sub-limits: Companies often ask customers to share the risk burden, and levy conditions like co-pay or sub-limits on treatments. Under co-pay, a customer pays a percentage of the total cost, while under sub-limits, he pays anything above the pre-decided cost limit for treatment. For instance, Bajaj Allianz General Insurance levies the co-pay structure, if the customer goes to a non-network hospital.

Customers could look at insurers that reward customers for prudent usage of the cover. So, for instance, Apollo Munich encourages shared accommodation or hospitalisation under its ‘Easy Health’ policy. As an incentive, depending on the slab applicable, it offers Rs 300-500 per day hospital cash to policy holders.
“The cash perks attached to them mean lower price on the product in the long run,” adds Jacob.

Renewals: While insurers have been following 70 years as the average age after which they refuse covers to individuals, customers should now insist on lifelong policy renewals.

“There is no official regulation from the Insurance Regulatory Development Authority (Irda) on the age limit and insurers have been told that they cannot refuse health policy renewals. This, in effect, makes lifelong renewals a must,” says Suresh Sugathan, head (health administration team), Bajaj Allianz General Insurance.

Increase in cover with age: Given the rise in medical inflation, your current cover may be insufficient at a higher age. While you may plan to bridge the gap by buying a new policy, companies are sceptical about covering those in the higher age bracket, as medical risks rise significantly with age.

“Customers should, instead, approach their existing insurers, as they are much more open to upgrades from own customers, subject to the necessary medical tests,” adds Sugathan.

Doing this will also help a customer skip the waiting periods applicable on new policies.

Wellness support: A number of companies now offer wellness support to their customers through helpline set-ups for health tips, medical camps and newsletters. These are value additions and part of awareness campaigns insurers undertake.

But, experts warn, one should take into account the kind of support offered, since the costs involved are met by insurers in premiums. “How many people would really follow the advice dispensed by a doctor on the other side of the phone helpline,” asks an official.

It would be better to see if the new insurer has tied up with hospitals and offers discounted rates for out-patient procedures not covered in the basic policy.

Health Cover Portabilitys Here, But Dont Cheer Yet

The wait is over finally.The Insurance Regulatory and Development Authority (Irda) has issued the final guidelines on health insurance portability,clearing the decks for their implementation from October 1.This means,from October you can switch from one health insurer to another without losing any benefits you have earned on your existing health cover.


Till now,policyholders were reluctant to switch to a new health insurer mainly because the transfer of the waiting period credit for pre-existing diseases (PED) was generally not allowed.Typically,pre-existing diseases are covered only after one to four years of the policy being in force,depending on the company and the illness.This is referred to as waiting period in insurance industry parlance.Portability will allow policyholders dissatisfied with their insurers services be it with premiums or claim settlement to migrate to another insurer who will not insist on them biding their time for four more years to get the PED cover.For instance,if you decide to shift to another insurer after completing three policy years,and the existing policy undertakes to cover PED after four years,you will have to wait for just one more year to be eligible for PED cover under the new policy.Health insurance portability will help policyholders as they will gain from a wider choice.It will also benefit the insurance industry in the long run, says Sanjay Datta,head,customer service,health and motor,ICICI Lombard.The penalty of the portability proposal being deemed accepted in case the insurance company does not respond within the timeline will make the process very efficient, says Mahavir Chopra,head,e-business,Medimanage.The most interesting aspect of the guidelines,perhaps,is that they allow a switch from group mediclaim to individual or family floater policies,and let the policyholder to retain the waiting period credit.Since many families depend solely on their employers' group policies,such transfers will help them have a policy of their own without having to wait for the four-year period for coverage of pre-existing diseases to come to an end.


While the insurance regulators diktats are to be welcomed,portability cannot be assumed to be the panacea for all the grievances of policyholders.Portability of a health insurance policy is attractive only on paper, says consumer activist Jehangir Gai.As long as a policy is profitable,every insurance company is good to the insured (when there is no claim,there cannot be any dispute). He points out that only after a claim arises do insurance companies get worried about the policy becoming onerous with repeated subsequent claims.It is then that the insurer becomes troublesome and,consequently,the insured becomes unhappy with his/her existing insurer and considers a migration to another insurance company.This is the time when portability is required.But the catch is that portability is not a matter of right.It is up to the new company to accept or reject a proposal.Which insurance company will want to take on the liability of an onerous policy None.So,a person can submit his proposal for portability and the insurance company would reject the proposal, reasons Gai.Then,there are other issues,too.Many feel that insurance companies will reject outright the proposals of senior citizens,who are seen as a highrisk category,thus defeating the whole purpose of portability.Besides,for those who have accumulated a no-claim bonus,portability could turn out to be a lossmaking proposition.As per the Irda circular,the no-claim bonus can be carried forward to the new policy,but the premium charged will be for the enhanced sum assured.This means that the policyholder will have to pay a higher premium if he/she wants the new sum assured to be equal to the previous sum assured plus the noclaim bonus.Therefore,in case of a switch,the policyholder will stand to lose out on discounted premium that he/she would have obtained,since no-claim bonus component would not have attracted any premium with the existing insurer.Arvind Laddha,MD & CEO,Vantage Insurance Brokers,points out another aspect that could go against policyholders when they migrate from group to individual plan.It also appears that when an insured ports from a group to an individual cover,he will get credit only for the period he has been insured with the current group insurer.This seems like a compromise for the insured,especially if he has had no claims with the previous insurer, he says.Such policyholders should also remember that they can port only to the individual policy offered by the same insurer first.After a year,they will earn rights equal to all other policyholders and can then choose any other insurer.


Confusion prevails over the definition of pre-existing illnesses in certain cases.Say a policyholder has undergone treatment for a disease and his/her insurer has settled the claim.If he/she decides to migrate,will the new company deny cover for the disease for which a claim has been made This is a grey area that needs clarity.If the new insurer does not offer cover without a waiting period for ailments suffered during the continuous running of the old policy,then senior citizens and others with chronic ailments would not be able to enjoy portability in the true spirit, says Chopra.If the new insurer is aware of the fact that the policyholder was suffering from a pre-existing condition and decides to accept the proposal,in practical terms,it will be difficult to reject a claim on the grounds of pre-existing diseases, says Subrahmanyam B,head,health insurance vertical,Bharti-Axa General Insurance.However,Gai says the new insurer will have to extend cover to these illnesses,too.This is in view of the provisions of clause 2.If a disease is already listed as pre-existing in the existing policy,then the new insurer will also treat it as pre-existing. Under the definition of PED,the waiting period is across any insurer.Therefore,if the new company accepts the risk,the time-bound PED would apply and PED would be covered, says Antony Jacob,CEO,Apollo Munich.While measures taken by Irda are commendable,health policyholders will have to wait for some more time before they have complete freedom of choice.But,at least it is a desirable beginning.

Health Insurance Portability is Welcome,but...

Some limitations,grey areas may prevent it from being implemented in its true spirit


Portability will allow policyholders to switch to another company and carry forward the waiting period credit for the pre-existing diseases cover.Till now,policyholders have been forced to stick to their insurer for fear of losing continuity benefits

If the new insurance company does not communicate its decision on the portability proposal within the stipulated time,it becomes obligated to accept the proposal

Even policyholders covered under employers' group mediclaim can now transfer the waiting period credit and move to individual or family floater health policy


It is up to the insurers to accept or reject a proposal for a switch.Those dissatisfied with an insurer's claim settlement record and wishing to migrate may not find takers

Insurers are free to levy premiums as per their underwriting norms.Hence,those in high- risk categories,like the elderly,or those with illnesses cannot expect reasonable premiums while porting

Those with accumulated no-claim bonus could be at a disadvantage as the new insurer will levy the premium applicable to the enhanced sum assured

While porting from a group cover,the insured will have to first switch to an individual cover of the same insurer.Only after a year can they then move to an insurer of their choice

The guidelines are confined to PED cover credit.They are silent on how other features like exclusions and loading clauses,etc,can be factored in

Grey Areas 

Insurers should clear migration proposal in a specified time,but there is confusion over calculation of the time limit.Some say the guidelines stipulate 15 days,others feel it is 35-40 days

Clarity is needed on whether new insurer should immediately cover diseases contracted during existing policys term

Bear in Mind

Submit your proposal for migration 45 days before renewal of your existing policy Porting will be possible only if policies are maintained without a break


Do You Have the Right Attitude To Financial Planning

Healthy Gains

The Biggest challenge for health insurance portability. which comes into effect from OCt 1, would to have standardised rates for various ailments

The much-awaited health insurance portability may finally kick in from October 1 as the Insurance Regulatory and Development Authority (Irda) has now come out with a new set of guidelines. A customer who wants to port his health insurance will have to apply to the insurer at least 45 days before the premium renewal date of the existing policy. The insurer will not be liable to offer portability if the policyholder fails to do so in the prescribed time.

Irda had first come out with a set of guidelines on health insurance portability on February this year and had fixed July 1 for its implementation. But insurers had sought time as the system to share and transfer data of the policyholders was not put in place. The insurance regulator later fixed October 1 as the new date.
Under the new norms, all individual health insurance policies issued by non-life insurers, including family floater policies, will be eligible for portability. The individual health insurance policyholder, which included family cover, will be able to transfer the credit gained by the pre-existing conditions, provided the previous policy has been maintained without any break. If the premium due on a given policy is not paid on or before the premium date or within 30 days, it will be considered as a break in policy.

The insurance company, on receipt of an application for porting, will have to give the applicant the portability form, the proposal form and other details of the various health insurance products that the company is currently offering. The new insurer will have to write to the existing insurer to get the details of the past and current medical history and claim records. All these data will be shared through the Irda’s web portal and will have to be mandatorily done within seven days of receipt of the portability form.

“Sharing of data was the major concern of insurance companies as they thought it will help rivals poach customers. But that is unlikely to happen now as the portal of sharing the data would be managed by Irda,” says Shankar Nath, founder of, an online insurance comparison site.

Analysts say the bigger challenge will be to develop standardised rates for various ailments according to the facilities being offered by the hospital. In fact, last year, all public sector insurance companies had withdrawn their cashless facility as the claim-ratio had peaked and state-insurers suffered huge losses. Analysts also say that for the insurance portability to work, companies will have to come out with a new premium structure, which should be similar in nature for ailments and medical facilities that the hospitals offer. As insurance is a very price-sensitive issue, portability will have to ensure that dissatisfied customers get their value for money once they shift to a new insurer and the insurers will also have to ensure that the exclusions and policy features do not surprise the customer.

Antony Jacob, CEO, Apollo Munich Health Insurance, says it is important for the regulator, companies and customers to be clear as to how the system will work “because we have about 50 companies who are engaged in health, which includes life, general and specialist health insurance companies”. He adds: “The products vary in terms of features, limits, sub-limits and pricing and the regulator will have to understand how some of the finer processes and features will work when we flag off portability.” 

RK Kaul, chairman and MD, Oriental Insurance, agrees: “As of now, there is no uniform health insurance policy for all companies. It’s time that that happens. The industry needs to work together as there is a lot of disparity between various policies offered by companies.”

Irda has stated that if the waiting period in the new policy is longer than the earlier one for the same disease or treatment, the additional waiting period should be clearly explained to the incoming policyholder in the portability form. In case of group health insurance policies, the individual members' shall be given credit based on the number of years of continuous insurance cover, irrespective of whether the previous policy had any pre-existing disease exclusion.

The cumulative non-claim bonus acquired from the previous insurer will be added in the new policy. For instance, if a policy holder has accumulated a bonus of R50,000 with the insurer and has a sum insured of R2 lakh, the total sum insured for the customer if he is porting the policy will be R2.5 lakh. If the new insurer doesn’t have any product in the R2.5 lakh-bracket, it would offer the policy in the nearest slab and charge the premium, accordingly.

Insurers Give Diabetics Short-Shrift Treatment

An effective health cover continues to elude diabetics despite the country being dubbed the diabetes capital of the world with a 9% prevalence in urban India. While the disease itself is not excluded, the worst hit are those already under treatment as they risk most major ailments being excluded.

"There are no fixed guidelines on what is covered as each case is unique and we would go by the merits of the case," said an official with state-owned New India Assurance. He, however, added that if a person is already receiving treatment for diabetes any complications related to that which could be treatment to heart, kidneys or eyes would be excluded. This stance of the insurers puts diabetics in a spot. If they declare their condition at the time of buying a policy the insurer may not accept the proposal or place restrictions. But if they do not their policies may turn worthless as in such cases insurers can reject all claims on the grounds of mis-representation.

According to Sanjay Datta, head, motor and health at ICICI Lombard, diabetes itself cannot be excluded permanently. "In case diabetes is declared as a pre-existing condition by the insured and accepted by the insurer under the policy, then the same is covered after four years of continuous coverage with the insurer." But insurers are wary about granting full cover to those who are already under treatment particularly young patients. The other issue is that health policies cover largely hospitalization while for diabetics a large chunk of the costs are daycare.

"Normally a standard health policy would cover all the in-patient treatments requiring hospitalization for ailments arising from diabetes. However out-patient treatments like daily expenses on administration of insulin, medication and regular check up are out of the purview of coverage," said Ajay Bimbhet, CEO, Royal Sundaram Alliance Insurance.

IRDA rules require that insurers do not reject any claim for pre-existing illness four years after the policy is purchased. While this benefits healthy people who subsequently face health issues it does not benefit those who are already diabetic. According to Rama of Bajaj Allianz, insurers might exclude diabetes from the policy if the proposer is already undergoing treatment at the time of purchase of policy. This means that it would not be covered under the policy. Apollo Munich Health Insurance's 'Easy Health' plan covers pre-existing diabetes and related problems after three years of continuous coverage. "But every policy is unique and is guided by an underwriting principle. Exclusions are dependent on pre-policy check up results and waiting period for various diseases would be as per the applicable policy terms," said Antony Jacob, CEO, Apollo Munich.

New entrant Max Bupa and Iffco Tokio Marine both provide cover treatment related to diabetes related ailments after four years of purchase of the policy if diabetes is present while buying a policy. "In case diabetes is pre-existing, any complication which is resultant of diabetes also stands excluded for first four years," said. Arun Mehrotra, head, retail at Iffco Tokio. Although there were attempts to introduce a special cover for diabetics it has not been successful so far.

"There are a hardly any disease specific health insurance covers. Also, as a concept such products are not viable for insurance companies," said Shefali Chhachhi, director, marketing, Max Bupa. However, Apollo Munich is looking at launching a diabetes specific cover in future which will look at disease management wellness besides catering to insurance needs of diabetics.

Plan Panel for State-Funded Health Cover for All Citizens

The panel has suggested that the government formulate financial incentives for beneficiaries of the insurance programme as well as their employers to encourage them to participate in the plan
The Planning Commission has proposed the introduction of a state-funded health insurance programme by 2017 to cover every citizen of the country.

The panel has suggested that the government formulate financial incentives for beneficiaries of the insurance programme as well as their employers to encourage them to participate in the plan.

“The 12th Plan (2012-17) will explore the possibilities of introducing a government-funded health insurance plan for every citizen along the lines of the Rashtriya Swasthya Bima Yojana (RSBY), which is currently limited to the poor and for certain select groups,” says the approach paper to the 12th Plan, which has been approved by the Union cabinet. “The premiums should be contributed both by the beneficiaries and their employers.”

RSBY, introduced in 2008, has provided health cover to about 24 million poor people in the country. The plan provides a cover of Rs. 30,000 a year to a family of as many as five people. It covers most surgical and medical needs.

The government and insurance firms are still grappling with the problem of some people fraudulently obtaining payments from insurers under the scheme.

Insurance company executives say the government needs to do a thorough homework before implementing the proposed universal health insurance plan.

Implementation will be a challenge because of India’s diverse demography, climate, scattered poor families and poor infrastructure, said Antony Jacob, chief executive of Apollo Munich Health Insurance Co. Ltd.

“Robust IT projects would be required to make this proposal a success,” he said. “Only about 12-13% of the population has some form of health insurance coverage, apart from the 10% who are covered through some form of government schemes.”

Amarnath Ananthanarayanan, chief executive of Bharti Axa General Insurance Co. Ltd, said it’s a step in the right direction but the government needs to decide on a few things, including “the definition of healthcare, who’ll fund it, whether it will be a public-private partnership and whether it will be for families both above and below the poverty line”.

The success of the unique identification (UID) project is critical for the implementation of the programme as it will help prevent fraud, he said.

UID plans to provide a unique number to all Indians that can be used by the government to identify individuals eligible for subsidies and other entitlements.

Involving the employee and employer in the health cover plan will leave out many of the people who work in the unorganized sector, said Aloke Gupta, an independent health insurance consultant.

“When you talk about employees and employers, does this mean the government is looking to cover only the organized sector, which is only around 30 million, and leave out the majority of the informal sector,” he said.

Details of the plan will be formulated once the actual implementation starts, said a Plan panel official, who declined to be identified. “This is just the idea now. When actual implementation happens then all these concerns will be addressed.”