Buying life or health insurance is never an easy task for those who are older or have pre-existing health conditions such as diabetes and hypertension.
They either face rejection or have to shell out much higher premiums. This is because insurers are wary of offering covers to such individuals due to the relatively higher risk of death or illness. However, now, Bajaj Allianz Life Insurance has launched a plan targeted specifically at diabetics.
Pure protection cover for diabetics
According to the World Health Organisation (WHO) data, 77 million Indians over the age of 18 are estimated to have been diagnosed with diabetes. Moreover, another 25 million are at risk of developing this chronic, potentially life-threatening condition in the next few years.
“A significant number of India’s population who are diagnosed with diabetes are currently under-insured. With diabetes being termed as a chronic disease, those diagnosed with it find it challenging to get comprehensive life cover to financially secure their family’s needs,” Bajaj Allianz Life said in an official release announcing the launch of a diabetic-specific term insurance policy.
Under such non-participating, non-linked pure protection covers, the sum assured is paid out to the policyholder’s dependents in case of their death. The policyholder will not be eligible for any maturity benefits when they survive the policy term.
Also Read: Health insurers say yes to diabetics, but higher premiums are a not-so-sweet reality
Discounts for keeping HbA1C under control
Bajaj Allianz Life’s product - Diabetic Term Plan Sub 8 HbA1C is aimed at Type 2 diabetic and pre-diabetic individuals. As the name suggests, pre-diabetics and diabetics with HbA1C (glycated haemoglobin) of up to 8 are eligible to buy this cover.
In simple terms, HbA1C denotes your average blood sugar levels over the last three months. “We will be able to help several Indians secure their family’s long-term financial plans by giving them well-deserved peace of mind. We will also provide our diabetic customers with an eco-system to manage and maintain their health,” says Tarun Chugh, MD and CEO, Bajaj Allianz Life.
If they are able to bring down their HbA1C levels, policyholders will be eligible for a 10 percent discount on the base premium at renewal the following year.
Regular term covers for diabetics – a complex affair
While diabetics can hope to get term cover albeit at higher premiums even now, this is the first product in the industry that is specifically designed for diabetics, according to the company. “Diabetics can buy regular term plans. If they are not as healthy, the practice is to charge a loading on premium. The rate up depends on several factors including for how long they have had diabetes, other co-morbidities, insulin dependency and so on,” says Madhu Burugupalli, Senior Executive Vice-president and Head, Products, Bajaj Allianz Life Insurance.
Put simply, loading on premium is an additional charge over and above the premium rates applicable to ‘healthy’ lives. According to industry watchers, this loading could range from 25 percent to even 100 percent, depending on the age, severity of diabetes, and BMI (body mass index), among other factors.
“Through this product, we want to give confidence to diabetics that they can get term insurance covers. It will encourage people to not conceal this condition while buying term insurance," says Chugh.
The severity of the applicant’s diabetes is priced into this product beforehand. "As part of the underwriting process, they have to answer a few questions around the duration of their condition, insulin dependency and other co-morbidities, if any, and so on," says Chugh.
As per the product brochure, under the diabetic policy, a 35-year-old male applicant who is diabetic and a non-smoker will have to pay an annual premium of Rs 26,838 (including GST), assuming a sum assured of Rs 1 crore and a policy tenure of 20 years.
Also read: Declare all pre-existing diseases or your health insurer will reject claims
Moneycontrol’s take
A pure protection term cover is a must-have in the protection portfolio of any individual – diabetic or not – who draws an income and has dependents. Despite higher premiums that they have to contend with, a pure risk cover is simply indispensable – it ensures that dependents’ financial goals do not suffer due to the policyholder’s untimely death.
A dedicated policy certainly makes it easier for diabetics to approach the company, share health details and make an application. Since the product is tailor-made for them, the application process is likely to be more streamlined. However, do ensure that you obtain premium quotes for regular term plans from various companies before taking a final call.
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