'People understand the importance of health insurance but are confused' talks with The Indian Express, March 22, 2010
A plethora of insurance products offered in the market has left the consumers utterly confused. Apollo Munich, one of the three standalone health insurance companies, has embarked upon a campaign to simplify things for the consumer. Chief executive Antony Jacob spoke with Suneeti Ahuja Kohli on the importance of health insurance for individuals and how it plans to make a difference. Excerpts:
The regulator has allowed insurance companies to launch combi products. How will it benefit the consumer and are you planning to launch one as well?
I think combi product is an interesting concept and has got potential. But since it is a new concept, we need to test the market out through our distribution channel and jointly with the distribution channel of a potential life insurance company that we could tie up with. Today, a traditional life insurance product does not cover the cost of a healthcare incident. Similarly, a traditional healthcare product takes care of healthcare financing to a certain extent, but does not take care of the financial needs in the event of loss of life. Here, the regulator has given an opportunity to those who wish to buy a product that combines the merits of two products into one. To me, it sounds like the right thing to do. However, only time can tell what kind of demand will there be for such a product. Nonetheless, we as a company are excited about this and are putting our thoughts together. We are talking to a number of life insurance companies.
When do you plan to launch this product?
We have started the process and hopefully we should be able to launch a product within a couple of months. The first quarter of the next financial year would certainly see the launch of such products.
Healthcare costs are rising. But insurance companies, largely, still provide a standalone cover of just Rs 5 lakh for individuals. Is it sufficient and what is the maximum insurance cover that you offer? Our policies provide health cover from Rs 30,000 to Rs 20 lakh. This is the highest limit offered in the industry. In a Rs 20-lakh cover, Rs 10 lakh will be for the indemnity cover and a Rs 10-lakh worth critical illness rider can be attached to it. So, people are welcome to take any amount of cover they feel is suitable for them.
How much should the ideal sum insured for an individual be?
Health insurance cover really depends upon a person's age, but I think a person in the young to middle age-group must have an indemnity cover of at least Rs 3 lakh. And if you are married then it is a must to have a floater policy for the family (two adults and two kids). An ideal cover for a floater family is Rs 5 lakh.
The key is that one must have a health insurance policy. You can start with a policy of Rs 1 lakh but then the sum insured should be upgraded after every year or two.
We often hear complaints that hospitals abuse patients who have health insurance. Have you also encountered such cases and what has been your experience so far?
Fraud misuse and abuse exists everywhere in the world and in every industry. As a standalone health insurance company, we understand what processes need to be in place to minimise such practices. I cannot for a minute say that these sort of malpractices do not occur but I can say that we have some strong controls and mechanisms to minimise it. We also take action and blacklist hospitals, if need be.
What is your claim ratio?
I would like to divide health insurance into two parts. One is individual and the other is group. On the group side, the business is not profitable and has not been so for many years. The claims ratio in the group segment is more than 100 per cent but is improving slightly. On the other hand, in the individual segment it should be around 60 per cent.
In order to have a direct contact with the customers, a number of insurance companies are launching in-house TPAs (third party administrators). Are you, too, looking at this?
Not at the moment. But, yes, we might be looking at this sort of an arrangement in the near future. For now, we have a group TEA — Family Health Plan (TEA) Limited, which has been running for more than 8 years.
You are running a very interesting ad campaign that suggests that your company will take bitter out of medicine and trouble out of treatment. How do you plan to do this?
Earlier this year, we engaged ourselves in a very interesting exercise of knowing what is on the minds of our customers and potential customers. Our survey found a common thread among the interviewed people. All of them were interested in buying health insurance because they know healthcare costs are rising and insurance is a smart way to take care of unforeseen events. But they are confused on what to buy and from whom. They do not know what an insurance policy cover provides and what it does not.
Maternity is, by far, the biggest reason why people get hospitalised in this country. Yet, there are hardly any policies that cover maternity costs. Health insurance policies, usually, do not cover consultation fee or the medicine fee. So people are not sure what the piece of paper is worth when the health insurance does not pay for pharmacy purchases. We have tried to uncomplicate the whole process. Today some of the products that we have speak this language. Our policies cover maternity. We cover dental costs, pharmacy purchases, preventive measures. All of this, of course, comes at a cost. But at least we offer it.
Why you must insure your health
Website: www.idiva.com, March 20, 2010
Your health is one of those things you so easily take for granted. I mean, you just have it. It's not something you earned so you don't bother to take care of it, till it's not there anymore. Of course, in the rare event that you do fall sick, you have it all covered. Your partner's job has great perks and Mediclaim's included! But is that really enough? No!
Here are some reasons you need to have your own health insurance policy:
Why your husband's policy is not enough!
· Do you know what the No.1 reason for hospitalisation is? Of course, it's pregnancy! However, the plan / benefit structure of group health insurance policies are customised to suit corporate needs and usually don't cover pregnancy.
· Even if it does, what if your husband really needs to change his job right about the time you are going for your delivery? Worse still, what if he gets fired?
· A mediclaim policy provided by a company will extend upto the day he retires at the most. If you get an independent health insurance policy after that you will have to pay a much, much higher premium thanks to your age!
So now that you know why you need your own retail health insurance policy, it's time to go get one that's right for you.
First off, it takes about three to four years to really benefit from any health insurance policy. Benefits like waiver of waiting periods, coverage of pre-existing diseases, cumulative bonuses etc take effect only after the first couple of years. So it's better to start early.
Also, at a younger age you can avoid the ordeal of pre-policy check up and avail of lower premium rates too.
And scary as it may be, nowadays, diseases that usually hit people later in life, like heart attacks, arthritis etc, are now occurring much earlier. So you might as well be covered for these too.
Choosing a policy
Just because you need a health insurance policy doesn't mean you buy the first one a salesman offers you. Do a little research on what different insurance companies are offering, the rates, etc.
· Also base your decision on the following:
- Premium paying capacity
- Benefit requirement
You could start with a coverage of Rs. 2,00,000 and gradually increase it as you grow older.
Here's the amount of cover you can look at:
20 to 35 years – Rs 2,00,000
35 to 45 years – Rs 4,00,000
45 to 59 years – Rs 5,00,000
60+ years – Rs 6,00,000 to Rs 10,00,000
Check the fine print
Check and double check the policy details. You don't want your policy to spring any ugly surprises on you. For instance, discovering that your policy doesn't cover certain diseases or that there is one to two year exclusion for certain diseases or that there is a waiting period for pre-existing diseases can be a real downer.
Also check the insurer's credentials and experience in health insurance and ask for details regarding the underwriting approach at the time of entry and claims.
Lastly, make sure your policy does not end at a certain age because this could leave you without any cover at a time when you need it most.
Don't we all love them? Well, all insurance policies don't offer them to you. Look for a policy that gives you the advantages of cover for health check ups, maternity benefits, day care surgeries etc.
Once you've found a suitable health insurance product that meets all your needs, it is important to stay insured without interruption. For that, remembering your health policy renewal date is pretty much as important as remembering your partner's birthday or your wedding anniversary!(With inputs from Antony Jacob, CEO, Apollo Munich Health Insurance Company Limited)