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Standard health insurance products could now offer a 5 percent increase in the cover for each claim-free policy period. As per draft regulations of Insurance Regulatory and Development Authority of India (IRDAI), the sum insured under a standard policy can be raised every year provided the policy is continuously renewed without a break.
This will be up to a maximum of 50 percent of the sum insured under the current policy period. Currently, cumulative bonus is not part of standard health insurance policies.
Sum insured (excluding CB) shall be increased by 5 percent in respect of each claim free policy period (where no claims are reported), provided the policy is continuously renewed without a break subject to a maximum of 50 percent of the sum insured (excluding CB accrued) under the current policy period.
Biresh Giri, Appointed Actuary and Chief Risk Officer, ACKO General Insurance said one of the key challenges that customers face when buying health insurance is choosing from a large number of health insurance products with varying benefits and exclusions.
The standard health product, he said, will help remove ambiguity across various health products/features available in the market.
The regulator said, as health products differ significantly with each other in terms of benefits offered, it is considered essential that the potential customers seeking health insurance all have access to the basic health insurance covers so as to enable them to choose the coverage based on the need.
To deal with this issue, IRDAI has said insurers have to offer a standard health insurance cover as per the guidelines. No additional add-ons or optional covers allowed to be proposed to offer along with the standard product.
IRDAI also said in order to incentivise early entry into health insurance by the young prospective policyholders of the health insurance market, all general and standalone health insurers must have an attractive premium.
Ashish Mehrotra, MD & CEO, Max Bupa Health Insurance said the standardisation will encourage customers to buy products since they will be simple to understand.
All general insurers and standalone health insurers have to mandatorily offer this product.
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