Life Insurance Corporation of India (LIC) the biggest, and most trusted Insurance Brand in India, launched Jeevan Arogya policy - a Defined Benefit Health Insurance Policy.
The product essentially is a Hospital Cash Benefit Product with additional lumpsum benefits for surgeries.The product being a defined benefit Mediclaim product pays fixed amounts as per the policy conditions irrespective of the actual costs.
The claim for such policies are paid by submitting photocopy bills, hence can be claimed in addition to a claim made for any other health insurance policy (Personal/Individual, Corporate etc.)
This product should not be misunderstood as a standard Health Insurance product. The biggest mistake may have made, when buying such a product is looking at the Sum Insured for Major Listed Surgeries and comparing this with a similar Sum Insured of the usual Health Insurance products sold by General Insurance/Health Insurance Companies. This does not make sense, as the sum insured, in the case of indemnity based products,is generally the same amount across all and any treatment, and is not subject to a list...this ofcourse is subject to policy conditions.
Benefits - Jeevan Arogya
LIC's Jeevan Arogya is an Comprehensive/Advanced (read complex) Defined Benefit Health Product. In addition to Daily Hospital Cash Benefit for the number of days of Hospitalization, the product provides the following additional benefit.
- An additional lumpsum benefit for listed Major Listed Surgeries for a maximum limit of 100 times the Daily Limit.
- An additional lumpsum benefit for all listed Day Care Procedures at 5X of the Daily Hospital Cash Limit
- An additional benefit for Other Surgeries (Not Listed ones) are covered by providing 2 times of the Daily Cash Limit, per hospitalization day.
How does LIC Jeevan Arogya Compare with other health Insurance in the Market?
Lic Jeevan Arogya seems to be another version of Aegon Religare's Health Plan (which is/was an advanced version of Tata AIG General's Defined Benefit Health Product).
Such products have been aggressively sold over phone by Tata AIG General for years now. Aegon Religare Life recently launched this product with full page advertisements in Mainstream Print Media.
Here's what is Unique from other similar Defined Benefit products?
- The product's most unique feature provides the benefit of increasing Limits on Benefits every year. This, to an extent takes care of the healthcare inflation. There are 2 ways the limits would increase.
- Renewal Bonus: The Daily Cash Limits increase every year by 5%, upto 1.50 times of the Initial Daily Cash Limits. This is not dependant on Claims.
- No Claim Bonus: Addition of another 5% to the Initial Daily Cash Limit, without any maximum limit - when there are no claims in the previous year.
- Premium Waiver: In event of a claim for a Major Surgical Benefit, this feature in the product would waive the subsequent one year's annual premium.
- You can make payments in Monthly, Quarterly, Semi Annually, Annually. This is unlike most Mediclaim products where payment modes are either annual, or minimum quarterly.
Important Points to know before you sign up for LIC Jeevan Arogya
- The Maximum Benefit under this product is Rs. 4 Lakhs. With Healthcare Inflation in India being around 20% every year, this is a very low cover, if you are looking at a long term coverage.
- The lumpsum benefit, again, for certain Major Surgical ailments is very low, compared to the possible actual costs.
- The coverage for other treatments (which are not listed) is Rs. 20000/- for this highest coverage plan in the product.
- There is no Cashless Network. However, there is a provision for Cash Advance upto 50% of Claim for Admissible Major Surgeries. Pre-Existing Ailments are excluded for life.
- Specified Ailments like Hernia, Piles, Gall Bladder Stone, Slip Disc etc. would be excluded for first 2 years of coverage. This is similar to the General Insurance Health Products.
- Waiting Period of 90 Days for Claims related to Sickness, as against 30 days in Indemnity based products.
Final Take: - Jeevan Arogya
LIC Jeevan Arogya, seems to be one of the most comprehensive Defined Benefit Health Plan from any General or Life Insurer, till date.
Though it covers all surgeries, the claims would be limited to the fixed amounts defined in the list under the policy, whereas, in a good indemnity based Standard Health Insurance policy, there would be lesser limits and restrictions, of course, subject to terms and conditions. Moreover, if there is a large claim under Other Surgeries (which are not listed), you would lose out substantially in such policies. Hence, as mentioned time and again, you could buy this as an add on product to your Standard indemnity based Health Insurance product sold by General Insurance Companies.