Life Insurance companies offering Health Insurance plan

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Recently, we came across news in an online Publication, globalsurance.com

Health Plus Life Insurance Plan

Future Generali’s Health product is planned for a future launch date. Since the Insurance Regulatory and Development Authority (IRDA) decided to allow combination products of health insurance coupled with life insurance earlier in 2010, Future Generali is planning on having its health plus life insurance ready within the next two months.

The Chief Executive Officer of Future Generali India Life Insurance, Deepak Sood said “We are looking to launch a health plus term life insurance product, possibly in the next two months. I see this kind of product to steadily build over the next three to five years. It can lead to several other combinations, and set the ball rolling for more complex products.”

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Experts from Medimanage.com give their opinion:

KS Sankar:

K S Sankar from Medimanage.com

‘The foremost advantage of Life Insurers also providing Health Insurance is that, Life underwriting processes are more robust than those of general insurance underwriting processes; primarily ‘cause general insurers insure a wider variety of risks – from pigs to pig iron plants, like I keep saying, and therefore, are not entirely focused on ‘people’ insurances. We all know Life Policies are mostly subject to medical underwriting, and even where there is no medical underwriting, there is differential pricing based on lifestyle – like smokers and non-smokers - and also gender. As against this, health policies of general insurance companies have hardly any differentiation between smokers/non-smokers or male/female. Only now some rudimentary beginnings are being made by insurers to differentiate pricing based on lifestyle. They still have a long way to go, however, to get anywhere close to life underwriting processes when it comes to recognizing such nuances.

Life policies being long term products unlike general insurance health insurances that are annual contracts, life insurers are more equipped – and have a greater incentive - to play a pro-active role towards betterment of the health of their policyholders. We all know of situations where someone fit as a fiddle one day ends up being diagnosed for a major illness the next day. While the health insurer can, and does, review the renewal premium post a year in which a claim is made, life insurer has contracted to continue the life cover at the pre-agreed premium through the term of the policy and cannot increase the premium even after knowing the life assured is not of completely good health anymore. It makes commercial sense for the life insurance companies, therefore, to invest in promoting pro-active health of their policyholders. Once they do it, they stand to gain from this on their health portfolio also by way of lower claims.

Question is, how can they do it? Afterall their strengths lie in insurance and underwriting and not healthcare.

Fortunately synergies are now possible to achieve this laudable end. Dedicated health insurance brokers with composite license from IRDA with robust processes and IT enablement have workable models to educate people on pro-active health management, to facilitate lifestyle management programs and help these people adhere to the recommended life style modification regimen through interactive communication modules. With knowledge and consent of these people, they can also provide comprehensive information to insurance companies on the health levels and practices of these people. It would as such make sense for life insurance companies to source the services of such entities.

This will indeed result in a Win Win for all; and, most importantly, pave way for a healthier India.’    

Sudhir Sarnobat:

Sudhir Sarnobat from Medimanage.com

Life Insurance companies offering Health Insurance plan is recent trend in India & will definitely pick-up momentum in next 3-5 years. These types of products are good for those customers who take care of their health by exercise & good eating habits. As the reimbursement based product does not give any returns on the premium paid, such members don’t see much value in Mediclaim. Also non-lifestyle diseases based products provide focused coverage (like Cancer care) which have fairly good demand & the coverage offered is for higher amount too as most of the Mediclaim policies offer cover up to only 5 lakhs.

We can expect many more such healthcare based life insurance products in coming years.

Mahavir Chopra:

Mahavir Chopra from Medimanage.comWe are a country which believes in savings more than risk management. We are a country whose people believe only the neighbour can get critical ailments like Cancer etc. We are a country of people who want "paisa vasool" OR "paisa vaapas". Products which combine savings with health, therefore offer "money back" if there is no claim, has always been a unpublished requirement of the Indian market. In my interaction with customers, I have many a times observed newbie customers taken by surprise when the product explained does not have a "money back", and mind you this is not a rural, semi-rural india phenomena, its in the DNA of Indian customers.

From a financial management and health management PoV also this is a good product for customers, if priced better (both in terms of premium, and administrations/fund management costs). Healthcare costs are rising beyond the published inflation figures, and a mere health insurance, without review every 2 years, will almost be a defunct instrument going forward. Investing for Healthcare costs of the future does make sense in more than many ways.  

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