only 1% Indians have health insurance

Today The Times of India has carried the study of National Insurance Academy ,according to which 1.08 % of India population is covered under Health Insurance.

Tha main finding is;"Very few insurance firms are having their branches in semi urban and rural area.Majority of the semi urban and rural population remains neglected."

We are plaesed to know that NIA has reinforced the viewpoint of S K Sethi.It will be worthwhile to consider setting up of the health insurance companies at state level with equity being fixed at Rs 10 crores level.This co will focus on rural and semi urban area in an extensive manner.

Incidentally will some one conduct a survey in any PSU say United and find out how many proposals are refused straight away at branch level.Is it that branch team is focussing on profitability of the branch while head office goes on releasing ads by spending money.

Repudiation of policy in case incorrect info is provided Supreme Court

The recent Supreme court of India judgement is a landmark judgementwhich has accepted that incorrect info being provided in the proposal form can lead to policy being repudiated.

Even though this judgement pertains to a claim which was lodged on LIC and was repudiated-but the fact is that this will also be applicable for other proposals ,especially health insurance .Good % of persons who are submitting proposals,but have preexisting disease have a tendancy to hide the same on the assumption that insurance company can not come to know about this.Medical science has progressed to such an extent that it is very easy to find out that disease has been there for how many years,if not being accurate to years,months & days.

SC judges said" The purpose for taking a policy of insurance is not in our opinion,very material.It may serve the purpose of social security but then the same should not be obtained with a fraudulent act by the insured.Proposal can be repudiated if a fraudulent act is discovered the proposer must show that his intention was bonafide."

Portability of Health Insurance policy to be introduced from February 2008

It is with interest I read about this in today's newspaper.It is being projected that something great is to be achieved from Feb 2008.

The fact is that even today same thing is available.Question before us is :
If someone is having Oriental policy where no claim bonus is not payable .No claim has been lodged during the year and on shifting it to another co will the new company give No Claim cumulative bonus.

I doubt it is going to happen.This will result in making a mockery of the portability.

Let us see how the Insurance co's come out with solution to such problems.

Premium Return Health Policy - a new product ,what it will be

Mint dated 9 th Nov ,2007 has covered a news item on Premium Return Health Insurance Policy ,which is going to be introduced by ICICI Lombard in near future.As details are not available therefore guess work is going on.

"We have been always hearing from Insurance co's that claims being lodged under health insurance are 180% of premium collected and the claims paid are 140% of premium collected said S K Sethi Vice President & Director of Insurance Brokers Assn of India.Return of premium can be possible only in the form of discount at time of renewal in case no claim is lodged during the year.Alternatively premium to be charged will be higher -it means product under Premium Return Policy will be suitable for High networth individuals 'he said.

Comments are invited.Especilaly from readers ,who might be from USA and are familiar with this type of product.

IRDA Committee on health insurance of senior citizens submits report

Yes ,it is submitted.

Recommendations are;

IRDA to mandate all insurers to give health insurance to all senior citizens.

Insurers to offer variety of plans

Income tax cconcessions to be made progressive.

Policies to be made portable.

Insurers to offer plans based on healthy ageing.

Market size of senior citizens by 2010 will be 173 millions.

What should be sum assured for health insurance?

This is a very common question which people ask me. It is a very simple and also very difficult question to answer.

Reason is Rs 1 lakh is sufficient if a person is going for a minor surgery.Assuming he is on holiday in Kashmir or Uttraranchal and it becomes neccessary to bring him in air ambulance.The charges can be Rs 20000/flying hour to Rs 75000/flying hour.

Kidney transplant in a Chennai Hospital costs Rs 25 to Rs 27 lakhs.

It is regrettted that no one has thought for air ambulance charges to be covered under the health insurance policy.Ifthe sum insured is Rs 1 lakh and a person is reimbursed Rs 50000 for surgery but is not reimbursed Rs 150,000 then how a person will feel.

Most probably he will feel cheated.

Is health insurance policy available for pets

It is interesting to know from newspaper report that an Indian Businessman has imported German Shepherd dog for Rs 29 lakhs.At present Pet insurance policy the owner may buy will covere death risk. It means in the event of the death of the pet sum assured is payable.We wonder whether any Indian Insurance co will issue a cover for a dog for Rs 29 lakhs.

Health insurance policy which can cover the treatment of the dog is not available.

Such policies are freely available in the world.Let us hope that at least 2 insurance co's will come out with such policy.It is time that insurance co's come out with specialised products to cater to niche market .Innovation in product development is the need of the day.

Oriental to come out with policy for senior citizens

National was the first one to come out with policy for senior citizens.It was followed by New India and United .Star is the co from Private sector ,which has been offering this policy.

Now it is the turn of Oriental to introduce the policy.Salient points of the policy will be ;
Entry age 60 yrs
Max age upto which the policy will be available will be 85 yrs
Max sum assured possible is Rs 2 lakhs only.( Rs 1.5 lakh for New India,RS 3 lakh for United,Rs 1 lakh for National)
Premium for age group of 60 to 65 for Rs 1 lakh will be Rs 3850 +Service Tax.This is lower than the premium being charged by National or Star.Good show-we welcome this.
Pre existing disease will be covered after 2 /3 yrs.

IRDA approval is awaited and then the formal announcement will be coming.

Oriental to come out with policy for senior citizens

National was the first one to come out with policy for senior citizens.It was folloed by New India and United .

Oriental to come out with policy for senior citizens

National was the first one to come out with policy for senior citizens.It was folloed by New India and United

Health Insurance gets attention of Chambers of Commerce

Few weeks back we had a conference in Mumbai,which was organized by CII.Now it is the turn of FICCI . This proves my prediction of 2005 (as mentioned in the first edition of the book Best Guide to Buy Health Insurance ) that Health Insurance will be one of the highest growth segment of Indian Insurance Industry.

FICCI is organizing a one-day conference on "Sustainable Health Insurance - Need of the Hour" on 29th November, 2007 at Federation House, New Delhi.

You will have the opportunity to hear the viewpoint of Mr C S Rao Chairman,IRDA as well as many other speakers ,who matter in Indian Health Insurance Industry

Those interested in attending this conference can contact Ms Natasha Wig/ Ms Neerja Dhamija at Ph: 011 - 23765339, 23357391; Fax: 011 - 23320714, 23721504; Email: finance@ficci.com.
Entry fee is Rs 3500.

Should we have standard format for proposal form for all insurance co's

Different insurance co's use different formats for the proposal.Many a times the branches are out of stock of printed forms.While we welcome the independence of all the co's but a standardised form will be a cost effective way to handle the whole thing.It will be easy to follow in this large country.If most of the co's can handle health proposal in 2 pages format then why someone should be using 4 page format.If the survey /study reveals that 4 page format is the right thing then let all of them follow 4 page format.

Hats off to Reliance General ,which has done away with these forms and issues the policy by giving a receipt ( half of A4 size paper) along with policy on the spot.

Comments are invited.

Is it becoming more difficult to insure a small group of say 25

Yes,it is becoming difficult to insure a group of say 25 persons.Most of the co's want that client should take individual policy for every one.Is it that Insurance co's want to increase the number of policies issued by them.In the case of 25 persons they will be able to issue 25 policies.

India like any other country survives on small enterprises.A medium size store employing 25 persons wishes to have the policy so that it can retain its employees being attracted towards joining large stores.

We sincerely hope that atleast specialised Health Insurance co's ;
Star
Apollo DKV
will come out with policy specifically oriented towards sme's.It should cater to group size of 25 to 75.

They can consider developing a specialised product to be sold only through Insurance Brokers Channel.

Broader definition of Pre existing disease-its impact

Some court judgements on pre existing disease,view point of IRDA & General Insurance Council is that definition of Pre existing disease should be made very clear so that Insurance co's do not use it as an excuse to repudiate the claim. This is a welcome step in the interest of the consumers located all over the country.
If it results in broader interpretation then claims ratio will definitely go up.We forsee the impact will result in increase in premium rates in the years to follow.
Let us see what happens.

Oriental Insurance asked to pay Rs. 1.5 lakh by Consumer Forum Court

Simran Kaur was born with a boil at the time of birth and after several years was advised to undergo surgery at the base of the spine. The Insurance Company rejected the claim by declaring it as a preexisting disease.

Justice Kapoor said “day to day problems of pain, swelling or fever can not be termed as preexisting disease., thus any attempt on the part of the insurer to repudiate the claim for such non disclosure is not permissible.’

We appreciate the judiciary system of India, which is protecting the interests of the consumers.

Health Insurance Claims being rejected under preexisting disease clause

Rejecting the claim in the first instance by declaring it as a preexisting disease is a very common excuse. This is turning out to be a common complaint of more and more insured persons, whom I meet. It is only on persuasion of the insured with Insurance co or its TPA that most of the cases are reconsidered and processed. The common grievance of the insured clients is that they are told this in oral only and not in writing.

It is natural that those whose cases are not considered a good number of them either end up in Consumer Forum courts or become negative publicity in the society and discourage others from buying health insurance.

In a recent judgment New India Assurance has been directed to pay Rs. 2.29 lakhs+interest @ 9% from February 1, 1999.In this case client was paid Rs. 88,000 under 1 claim and after 5 years a case was filed again. The Insurance company repudiated the claim as it was preexisting disease.

With this judgment it is clear that if the policy is continuing then as and when the insured goes again for hospitalization (with the same illness/disease)then the claim is payable.

We appreciate the judiciary system of India, which is protecting the interests of the consumers.

Is 1 year health policy cumbersome?

In UK health policy is sold with long term perspective but in India we sell it with 1 year perspective.Our present system is more on US pattern.

For having peace of mind the customers will be happier with 10 years plan but with fixed rates known to them.This is similar to fixed interest rate vs floating interest rate.

Recent increase in rates by New India/United -for higher age group going up by 80% or so has really shaken the confidence of the insured .

Apollo DKV also on OPD/co pay bandwagon

Apollo DKV is planning different insurance products for the urban, rural and corporate populations. For the urban population, they are developing products to include all — doctor’s consultation, co-pay, outpatient visits and post-illness coverage. In the corporate segment, the products will include preventive health coverage, customised for corporate groups.

Products are under development.We feel for OPD the methodoly will be that if 25% is co pay amount ( to be paid by insured ) then he should pay that much amount at the time of consultation .This will result in no claim forms to be filled up at later date as balance amount will be paid by insurance company to the doctor or hospital.

Send request to Finance Minister to abolish Service Tax on Health Insurance policy

Budget is under preparation in the Finance Ministry in New Delhi.General Insurance Council has sent a proposal to Government that service tax should be abolished on health insurance policy.

Let us put pressure on the Government by sending request in this regard.You can write/print the letter addressed to ;

The Finance Minister
Government of India
North Block
New Delhi 110001

Send it to me at following address;
Mr S K Sethi
449 Kailash Tower 2
East of Kailah
New Delhi 110065

We will collect all the letters and will submit it to The Finance Ministry.Our target is 10000 letters.Yours is one of them.

Health Insurance Premium is now 0n 3 rd position

It was predicted by me in 2005 at the time of release of book Best Guide to Buy Health Insurance that Health insurance business will grow at a faster pace in the years to come.

During year ending March 2007 health insurance premium has moved from 5 th position to 3 rd position.Ofcourse first postion is with Motor Insurance.

In the year ending march 2009 Health will definitely move to 2 nd position.

Let us hope for more and more products and better service from Insurance companies

LIC will start policy with Health risk coverage

LIC is expected to introduce its haelth insurance product during Nov. 2007 . It will be a product where part of the premium will go towards savings and part will go towards risk coverage for health coverage.

Claims settlement will be through 8 TPA's on all India basis.However payment will be made through 3 banks;
Axis Bank
Bank of America
Syndicate Bank

While we are awaiting for the details of the product,yet to be announced-we are of the opinion that
+points of the same are;
1.Product will be available through large network of agents of LIC
2.Product with term of 10 years will result in issue of renewal noticeon yeraly basis.We are assuming 1 month grace period for payment of premium will be available.
3.Product may permit quarterly /half yearly/yearly payment

- points are;
1.If a customer can buy policy from a non life co for Rs 1400(say sum assured of Rs 1 lakh)then premium to be paid to LIC will be some thing like Rs 1400+saving element,which means something like Rs 3000 or so .May be Rs 5000.

Details are awaited from LIC and we will cover this in the coming days/weeks.

Will Health Insurance Policy holders get treated in Medicity

Ambitious Medicity Project of Dr Naresh Trehan (Escorts Heart Centre fame)is taking shape in Gurgaon.Dr Trehan plans to use the combination of Allopathy, Ayurveda, Homeopathy and Chinese Medicine to treat the patients.
As health insurance policies of most of the Insurance companies in India cover Allopathy treatment only and do not cover the other 3 systems of treatment,therefore we feel patients wishing to undergo treatment through alternative systems will be put to lot of inconvenience.

Cashless payment will become a cause for irritation and frustration as it will be difficult to quantify what % of the package cost can be attributed to Ayurveda form of treatment.
This is the right time that insurance companies should include Ayurveda, Homeopathy,Chinese System,Naturopathy, in the inclusion list and introduce new products.
This photo is taken from Business Standard dated Oct 2,2007

Health Insurance Premium of various Indian co's 2007

Every one is curious to know which Insurance co is biggest or which one is growing at a faster pace in Health Insurance segment.IRDA has released the figures and these are as above.Public Sector growth is slowing down while Reliance has shown growth of 686% because of aggresive pricing which they introduced in Dec,2006.

Health Insurance Pemium of various co's in India

Every one is curious to know who is big in Health insurance or who is growing at a faster pace in this segemnt.Figures for 2006 -07 are available and these are as follows;

Health Insurance for Unorganised Sector

On 15 th August Prime Minister had announced that a scheme costing Rs2000 crores will be announced for Health Insurance for people below the poverty line.

On 1 st October Finance Minister has announced the scheme.The salient points of the same are;

Name is Rashtriya Swastha Bima Yojana (RSBY)
No of families to be covered 1.2 crores
Family covers self,spouse,3 children
Beginning April1,2008
Sum assured for the family Rs 30000
Smart cards to be used.Valid all over the country.Benefits migratory labour.
All existing diseases to be covered.
Exclusions may be AIDS/HIV,STD's,drug and alcohol induced illness,congenital external diseases,sterilisation and fertility related procedures
Central Govt will bear 75% cost .State Govt will bear 25%
Till date 18 states have agreed to implement this scheme.
North Eastern States are ready to bear 10% cost only.
All PSU's and Private sector co's will get the opportunity.
State Govt will identify hospitals,Insurnace co,people eligible under BPL,who are to be issued smart cards

It is a welcome step when India is celebrating 60 years of indepenence.

During 2006 -07 Health Insurance premium was Rs 3210 crores .We forsee this figure will increase to Rs 5600 crores during 2007-08 .It will further increase to Rs 8400 crores during 2008-09.To this we will have to add Rs 751 crores being allocated by the Govt for this scheme so we can expect figure of Rs 9150 crores .

Comments are invited.

We are pleased that role has been given to private co's and state goverenments to implement this scheme.This issue was covered in one of our blog.

Is Ayurvedic /Homeopathic treatment covered under health insurance?

In a country where home remedies are very common and a large number of people have faith in Ayurvedic treatment and Homeopathic treatment-Is it not surprising that Insurance companies do not cover these systems of treatment?

Now the change is coming.Iffco Tokio now covers Ayurvedic treatment while for post hospitlization treatment Star Health will cover the Homeopathic treatment.

Now HIV patients will be able to buy Health Insurance

Star Health and Allied Insurance Company, is all set to offer India’s first-ever insurance policy for HIV patients, based on the stage of the disease. This is a news,which brings comfort to those wo have been suffering from this disease ,which needs expensive medicines for treatment.

Patients with HIV, who were so far denied medical insurance, will now have the comfort of applying for health cover. The insurance policy for HIV patients, will be issued on the stage of the disease. The company will tie up with 1,800 hospitals and labs to conduct the CD4 test for patients seeking insurance. Dr Mohammed Arif, the officer in charge of the policy, said, “Our officers would approach government agencies, NGOs, societies and other registered bodies for creating awareness about the policy.” There is no age limit for the policy. A pre-insurance medical test would be conducted on people wishing to apply for it, which would include a CD4 test. Only those with a CD4 count of more than 350 would be covered. The cost of the tests would be borne by Star Health, added Dr Arif. happened thereafter.”

Premium rates are awaited .

Health Insurance Summit in Mumbai on Oct 5

CII is organizing Health Insurance Summit 2007 in Mumbai on Oct 5.This is a good sign ,which shows the importance which Health Inusrance is getting in the country.

You may visit CII site for details

Now OPD cost can be covered under Health Insurance

We are feeling the impact of market economy in a big way as ICICI Lombard has introduced a new health insurance product called Health Advantage. This is the first product to cover OPD bills paid for consulting doctors/dental treatment expenses/ over the counter purchase of medicines and orthopaedic treatment. It also covers surgeries, accidents and sudden illnesses that usual health insurance products do not cover.

Naturally nothing comes free in this world and you have to pay a cost for the everything which is worthwhile.But all this is at a cost. The premiums for the policy are three times the premiums you might be paying for ordinary health policies.

The Tax advantage is significant as the policy is specially designed to give the customer tax benefit of Rs 15,000 (Rs 20,000 for senior citizens) under Section 80D. Says ICICI Lombard’s marketing head Karthik Jain, “This policy would be most suitable for people who fall under the higher tax slab of 30 percent.”

Cover. Health Advantage covers all preexisting diseases if the policy is renewed for the third consecutive year. In contrast, most healthcare policies cover pre-existing diseases only after the fourth or fifth continuous renewal.

Premium advantage. The premium has been fixed at Rs 15,000 for ages 5 to 60, and Rs 20,000 for ages 61 to 70. The same premiums are charged for a sum assured of Rs 2 lakh or Rs 3 lakh with different sets of benefits. There are two types of benefits that the policy extends: hospitalization expenses and outpatient treatment expenses. In a Rs 3 lakh cover, the hospitalization expenses get increased by another Rs 1 lakh, but the outpatient expenses are reduced by Rs 500.

We are getting more details of this policy and will cover in another blog in a day or so.

New India introduces different rates for 3 zones in India

For motor insurance India used to be divided into 2 zones.
But for health insurance New India has divided India into 3 zones;
Zone 1 Mumbai
Zone 2 Delhi/Bangalore
Zone 3 Rest of India
The question arises ;
As the difference between rates for 3 zones is very small,is it worthwhile to have 3 rates?
A person from zone 3 wishes to go to Delhi or Mumbai for treatment because facilities are not available in his home town in zone 3.Will he be permitted to undergo treatment or not?
A person from zone 3 goes to Mumbai and claims I am visiting Mumbai-will he be permitted treatment for the disease which he could have got treated in his home town in zone 3?

Will 3 rates result in customer satisfaction or dissatisfaction?
Let us wait and watch.

only 2 health insurance co's start working in India in 2 and a half year

India is a large country .IRDA has special rules for setting up of health insurance co's by putting in equity of Rs. 25 crores vs Rs. 100 crores required for setting up of a normal non life insurance co.

In 2 and a half years time only 2 health insurance co's started working in India.

What can be the reasons?

1 Shortage of funds -No.I do not believe .In our country even movies are being produced with investment of more than Rs. 25 crores
2 Unattractive as a business-With population of 110 crores,every business is boomimg,GDP growth @ 9.3% (I do not believe this)
3.Rs.25 crores is too small asum for setting up an all India co and high real estate cost is affecting .Yes this is the possible reason.

Let us think on the following lines;
Instead of India as the territory why not consider state as the territory and IRDA considers issuing of licence to a co ,which will operate only in 1 state.
Lower equity of Rs. 10 crores will do.
easy to start the co as it has to open offices only in 1 state
better control on costs and lower cost of selling
Many of our banks in private sector stated at district level and then grew at the state level and are operating not only in India but even in foreign.level

Comments are invited

Do you know instance where renewal of health insurance for a senior citizen is refused

Do you know instance where renewal of health insurance for a senior citizen is refused? If yes let us know .Whenever this point comes up the insurance co says all renewals are being done and in no case it is being refused.

Your views will help us in taking up this issue.

Co pay concept comes to India (health insurance)

For a long time we have been habitual of near to 100% cost of hospitalization being paid by the insurance co.

National Varishta Bima( senior citizens)has introduced 10% as co pay ,which means 10% will be paid by the insured and rest by Insurance co.Star Health has this fugure at 30 %(with medical examination ) and 50% (without medical examination ).

This is a big change for all of us.

Insurance co's feel this will result in control on the costs as insured will be conscious of the costs.

Let us see how other co's adopt this concept.

Is helicopter medical evacuation covered under Health Insurance Policy ?

Business Standard (Sep 13, 2007) has carried the following photo;

None of the health insurance policy issued to us covers the cost of helicopter medical evacuation.
It is surprising that overseas travel policy issued by various co’s carries sum assured of USD 5,00,000 ( Rs 2 crores+) and in emergency helicopter medical evacuation is also covered/ paid for.
Within India Rs 10 lakhs is the max sum assured possible with Cholamandalam.New India is also increasing the sum assured to Rs 10 lakh and in near future plans to raise it to Rs 25 lakhs.
We do hope Cholamandam & New India will consider including helicopter medical evacuation as part of the policy (Sum assured Rs 10 lakhs).
Your comments are invited so that we can convey our thoughts to the Insurance Co’s.

Diseases knock billions off India Income

TOI (Sep. 13, 2007) has carried an interesting news item according to which
“In 2005 alone, the estimated loss to our national income from diseases like heart

ailments, strokes and diabetes, was a staggering $ 9 billions (Rs. 37000 crores)

Over next 10 yrs, India may lose more than $ 200 billions (Rs. 8, 00,000 crores)
due to employee’s sickness. Some firms are already losing about 14% of

their annual working days -51 days /year.

Very interesting to note that in India health insurance premium collected

during 2006-07 was Rs 3300 crores,which means per capita health insurance

premium spend is Rs. 30 for a year.

PM has announced on August 15, 2007 that Rs 2000 crores will be spent by

the Government of India for health insurance of poor people.
How it will be spent? Will it be subsidy to be given to 4 PSU’s or to all

the insurance co’s offering health insurance?
Till this time no indications are available.

It is in the interest of co’s to go in for Group Health Insurance so that health

of the employees is taken care off.

Your comments are invited.