Do you need an unlimited health insurance cover?

For example, Niva Bupa’s recent product - ReAssure 3.0 - promises to offer unlimited base sum insured across variants for all claims and illnesses. “The idea behind introducing unlimited SI is that policyholders should never have to compromise on the quality of treatment. In many developed countries, there is no concept of sum insured. There are lifetime limits for a person or a particular disease,” said Niva Bupa’s Mishra.

Those seeking insurance need to know the fineprint in built-in features as well as rider benefits bundled with products. Bajaj Allianz, which launched its Infinity plan in 2020, allows a policyholder to choose coverage limit based on per day room rent options ranging from Rs 3,000-50,000. The sum insured will be 100 times the per day room rent limit, according to Bajaj Allianz. If the claim amount exceeds this cap, co-payment of 15 percent, 20 percent or 25 percent, as selected at the time of purchase will come to play. ICICI Lombard’s Elevate, through Infinite Care rider, offers unlimited coverage for any one claim of choice during the policy’s tenure. “The premiums vary as per the variant, features and the insurer. For example, a 35-year-old will have to pay an annual premium of approximately Rs 17,000 for the unlimited cover; in the case of Elevate, the premium could work out to Rs 30,000,” said Nikhil Jha, co-founder, Hercules Insurance Advisors.

“Such covers are truly ‘unlimited’ in the sense that there is no maximum cap on the sum insured. The big question on the minds of most consumers is ‘What is the right sum insured for me’? Certain treatment procedures – like lung transplant, for instance, can cost up to Rs 1 crore. The objective is to take away the anxiety. Also, allied features associated with SI such as no claim bonus are now not relevant, so from policyholders’ perspective, these newer products are simpler to understand. We will see more companies launching such policies in the days to come,” Siddharth Singhal, Business Head, Health Insurance, Policybazaar.com said.

Also Read: Nearly half the health insurance policyholders faced claim rejection in last three years

Necessity or Excess?

Experts believe an unlimited health insurance sum insured can be a source of comfort in times of spiralling medical inflation. “The idea is that such covers will be useful in future. For example, a 35-year-old might buy a cover of Rs 25 lakh now, but she will probably develop an illness and file a claim, say, 10-15 years later. A Rs 25-lakh cover would have lost value by the time she actually needs the cover,” said Nikhil Jha.

Besides, many well-heeled Indians may not prefer admission to general ward or a shared space, preferring single occupancy rooms instead. Since charges like doctor’s fees or operation theatre charges are linked to room rent, choosing a higher category pushes up overall cost of treatment. “Customers no longer need to make educated guesses about tomorrow’s medical costs or worry if their cover will keep up. It’s about ensuring that healthcare needs 10, 20, 30 years down the line will still be met - without a single thought about inflation or limits,” said Mishra.

Limitations and Conditions

Before opting for such covers, one needs to know the flipside too. It is worth asking whether these plans score over high value covers - be it a single large cover of Rs 1 crore or an equivalent base plus top-up - in the backdrop of rising hospitalisation costs.

Some individuals must be financially prepared for high-value claims, these are not frequent, argue some experts. “I would say infinite coverage is more like a marketing ploy. I do not foresee anyone needing the restoration of, say, Rs 1 crore coverage infinite number of times. These are optically-pleasing features, but we are yet to see companies actually paying out such high value claims consistently in a hassle-free manner. Also, these plans can be withdrawn in case of the insurer’s adverse claim experience,” said Prashant Mhatre, Director, Amicus Solutions and the all-India president of General Insurance Agents’ Federation. You might be asked to migrate to a policy that may not be as feature-rich as these products.

Health insurance policies from general insurance companies are annually renewable contracts, and even if the premiums seem affordable at the time of purchase, these can go up in line with your age, medical inflation and your insurer's claim experience. “At that age, you might find it difficult to pay the premiums. Also, there is a question mark over the sustainability in the long-term due to an alarming rise in costs of medical treatment. You need health insurance for lifetime, but insurers can withdraw loss-making products and ask you switch to another plan at a later stage. This is the key challenge with such plans,” Hari Radhakrishnan, Regional Director, First Policy Insurance Brokers said.

Finally, experts also advice that the key metric to focus on, beyond the feature-rich offerings, is the companies' claim settlement ratio.