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An indemnity cover from a life insurer? IRDAI panel to take a call

A nine-member committee headed by G Srinivasan of National Insurance Academy is being set up to study this proposal. This committee has representatives from life insurance, general insurance and standalone health companies.

February 25, 2020 / 05:21 PM IST

You may soon be able to buy an indemnity cover from your life insurer if a regulatory committee gives a favourable report.

This will mean that customers will have atleast 24 more indemnity products (considering the number of life insurers) to choose from. In 2016, life insurers were barred from selling these indemnity or reimbursement- based covers by the Insurance Regulatory and Development Authority of India (IRDAI).

A nine-member committee headed by G Srinivasan of National Insurance Academy is being set up to study this proposal. This committee has representatives from life insurance, general insurance and standalone health companies.

A reimbursement product is one where when an insured is hospitalised, the cost of the medical bill has to be paid upfront. This is later reimbursed by the insurance companies on producing the medical bills.

Life insurers are only allowed fixed benefit health plans. These products pay a lumpsum amount on diagnosis of an ailment.

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The IRDAI committee will look at the feasibility and the business scope for life insurance companies to offer indemnity-based health insurance products.

A report will be submitted within two months on this issue.

While life insurers had moved IRDAI to allow them to sell indemnity plans, a tough opposition came in from standalone health insurers. These pure-play health firms were of the view that life insurers were not core players in this space and hence should only sell fixed benefit plans.

The health insurers have also argued that there will be an impact on their business if life insurers are allowed to sell reimbursement products.
M Saraswathy
first published: Feb 25, 2020 05:20 pm

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