Why insurance for surrogate mothers might be difficult to offer

Surrogacy insurance is here

Soon, insurance companies will have to offer coverage to surrogate mothers. Couples who have opted for this route will have to buy the coverage for the surrogate mothers.

The Insurance Regulatory and Development Authority of India (IRDAI) has recently asked insurance companies to make “suitable” products available.

Several couples, particularly celebrities, have walked down this path in recent years, boosting the acceptability of surrogacy in the country.

As per the Surrogacy Act, 2012, Surrogacy (Regulation) Rules, 2022 and Assisted Reproductive Technology Act, 2021, couples intending to take the surrogacy route will have to purchase a health insurance policy in favour of the surrogate mother.

The coverage will continue for 36 months and ought to be sufficient to cover “all expenses for all complications arising out of pregnancy and also covering postpartum delivery complications,” IRDAI said.

Accordingly, the insurance regulator has asked companies to comply with both the Act and their rules.

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Complications only, not routine maternity expenses

Insurers say they will design products for the specific needs of such cases. Couples who have opted for this route will have to purchase the cover in favour of the surrogate mother and bear the premium cost, surrogacy regulations say.

“This involves designing a separate product for the purpose. The intent is that the biological parents have to provide for any health complications that the surrogate mother may suffer from,” says Dr Bhabatosh Mishra, Director, Underwriting, Products and Claims, Niva Bupa Health Insurance.

The need for such policies was felt as under regular health policies with maternity coverage, only biological mothers are covered.

However, this does not mean that routine diagnostic tests or delivery charges will be paid for. “Only complications arising during pregnancy and also post-delivery will be covered,” says Mishra. That is, if the surrogate mother has a complication-free pregnancy, no claim can be made.

Under an individual health insurance policy with maternity benefits, the coverage kicks in typically after a waiting period of four years. In this case, even regular delivery expenses are covered, albeit with a cap of Rs 35,000- Rs 1 lakh, depending on whether the delivery is normal or Caesarean. Group health covers provided by employers, on the other hand, pay for hospitalisation expenses during delivery without any waiting period.

If the couple or women concerned have decided to opt for an oocyte donor, again they will have to buy a health cover for one year to fund treatment for complications arising out of the oocyte retrieval procedure. Oocyte donation, a part of in-vitro fertilisation (IVF) procedure, enables women with ovarian issues to conceive with the help of a donor.

Also Read: How young couples can cover maternity costs via health insurance

Grey areas make coverage a complex affair

Some insurers say they will wait for further clarity before designing such products. “The challenge lies in maintaining confidentiality, which is a critical clause in surrogacy. The name of the surrogate woman is to be kept under wraps in such cases. However, when it comes to insurance, we need to know the person who will be covered under the policy,” says a senior industry executive who did not wish to be named.

It is not possible to maintain secrecy as the insurer needs to know the person who is undergoing treatment at the hospital. “Also, this could go against the principle of insurance, which exists to primarily cover uncertainties, but in this case, the cover is to be extended to someone who has already conceived,” he points out.

However, others point out that since only complications, and not pregnancy and delivery expenses, are covered, it will not fall in the category of ‘anti-selection’.

Abhishek Bondia, Co-founder and Managing Director, SecureNow Insurance Brokers, points out that this will not act as a bottleneck. “While pregnancy itself is a certainty, complications are not.” This could make providing such insurance viable for companies.

Insurance companies, however, will need to work around privacy concerns – of the couple involved as well as the surrogate mother - to provide the coverage.

But couples will have to brace themselves for higher premiums. “Premiums are likely to be expensive. For one, it is a policy that necessitates coverage for three years. Also, there is no waiting period involved (unlike in case of plans with maternity benefits), as the coverage will start immediately,” says Bondia.

Moneycontrol’s take

Insurance policies are getting more advanced with every passing day and it is good that the insurance regulator is moving with the times. From attracting policyholders with lower premiums for a good health profile to innovative motor insurance policies, the good old insurance covers are now coming in with more variants.

This new cover for surrogate mothers is a step ahead from the age-old maternity covers and in keeping with the times. Still, these are early days and insurance companies will have to work out the grey areas.