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In the past few years, the growth in business and associated competition has resulted in an urgency amongst Insurance companies to ambitiously build large revenue, scale their distribution network, branch network and hence their operations. Quick scaling has its own disadvantages. Urgency of building a "quick" team has resulted in huge holes in the operations and responsiveness process with Insurance Companies. Google "Insurance Complaints India" and you will see that the pages wont end.

In addition to the existing Grievance Mechanism in Insurance Companies and the Ombudsman, IRDA has been continously working on creating a convenient infrastructure for Insurance Consumers to make complaints. In addition to the launch of the Grievance Call Centre (Phone no. 155255) almost a year back, with an email facility also (complaints@irda.gov.in), IRDA launched the Online Grievance Management portal - IGMS (Integrated Grievance Management System). This allows Insurance Buyers/Customers to complaint against Insurance Service Providers over the internet.

Ofcourse every Complaint that you make to IRDA through any of the medium provide, requires you to first lodge a complaint with the Grievance Cell of the Insurance Company.

Here's the Press Release from IRDA: http://www.irda.gov.in/ADMINCMS/cms/frmGeneral_Layout.aspx?page=PageNo1261&flag=1


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 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.)

Maximum Entry Age

65 Years. 75 years for Parents

Who can be covered? 

Self, Spouse, Kids, Parents, In-Laws.

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.

What are the Benefits?

LIC's Jeevan Arogya is an Comprehensive/Advanced (read complex) Defined Benefit 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 is Jeevan Arogya different from other Health Products in the Market?

Jeevan Arogya is an advanced 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:

- 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:

LIC Jeevan Arogya, seems to be 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, ofcourse, 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.

In case you have further queries do write to our experts at expert@medimanage.com

What to Compare in a Health Insurance Policy in India?

The kind of participation Government of India has in Healthcare is clear from their budgets for Healthcare compared to developed/developing countries, especially the European ones. With the rocketing trend of Healthcare expenditure, there are only 2 ways you can save yourself from any Health related expenditure killing your savings in India. 1) Ensure your family lives a healthy lifestyle and pray, that you get no disease 2) Get a Health Insurance.

Health Insurance, worldwide is the best system having the capability to empower the common man to use best of quality healthcare at most affordable prices.  While, the healthcare industry in western countries being more organized abroad has resulted in more comprehensive products out there, the core Health Insurance products in India, in their current form, can actually be called Hospitalization Insurance Plans. The plans cover expenses related to only Hospitalization. These hospital costs could be for accidents as well as sickness, of course subject to a long list of terms and conditions.

Health Insurance Expert India

OK, let's get to the point. We are here to unravel the best path to finding the most suitable product in the market. With more than 25 General Insurance Companies marketing and selling more than 50 Health Insurance products, with exponentially higher terms to compare this looks like a tedious task.  Let's give it shot. Here we go:  

# 1 Cut out the frills. Go Basic:

Most frilled products in India are not cost effective. A product which takes almost double the median premium, and offers unnecessary frills, which you dont actually need, is a strict no no. We have all traditionally lived with routine medical expenses like Consultation expenses, Dentists bills, Medicine bills, and such costs are therefore manageable by most of us, unlike a huge hospitalization bill which could eat way more than a couple of months’ salary or savings.

Bottomline:  You should first look at covering ALL members of your family for the larger “unmanageable” costs, which could burn a hole in your overall financial planning before signing for any fancy product.

# 2 Don’t Compare Premiums:

Never start by comparing premiums. Health Insurance is more than a Mumbai-Delhi Air Ticket, which you can compare and buy from comparison/aggregator websites. Health Insurance is a long term complex contract coupled with complex services. This requires insights into the overall insurance contract (called policy wordings) over and above price comparison. Either you need to yourself get into comparing the features in detail, or take help of an unbiased health insurance advisor.

Bottomline:  Understanding the benefits and terms is more important than the cost you are paying.

# 3 Look for Maximum Renewal Age:

Maximum Renewal age is the age on which the coverage on your health insurance would be discontinued. 

Comparison of Renewal Ceasing Age in Health insurance in India

This could be for all members or for a specific proposer/member, depending on product to product. Remember, your core goal, when you buy Health Insurance is to save yourself from mounting healthcare costs right through your life. A product, which ceases renewal, while you are still alive and need it more than any time before, is a BAD product. Sift through all products and find out the maximum renewal age. Better, look for Lifetime products. Rule out all products, say, which do not cover your family members for a reasonable lifetime. As medical science progresses and becomes more accessible to the common man, Life expectancy in India will move higher from the current average of around 70. A product with a lower renewal ceasing age than 70 years is a complete no no.   

Bottomline:  An insurance product which does not work, when you most need it, is not insurance.

# 4 Look for Treatment wise limits & Copay: 

Look for treatment wise limits in the products. Treatment wise limits basically cap the amount you can claim for a particular surgery under the policy. Say, there could be limits for Cardiac treatments of Rs. 1.50 Lakhs or for Cataract for Rs. 20000 per eye. Such limits would cap your claim, even n when you have a large sum insured under the policy. You need to weigh this in, before you sign up. Some products I remember are United India’s Family Medicare, Star Health’s Red Carpet have such limits. Bajaj Allianz General and ICICI Lombard have a limit only for Cataract.

Comparison of Surgery Limits in various mediclaim products in India

Another condition, is the COPAY. Copay is basically is the share of admissable claim that the customer would have to pay from her own pocket. For instance, if the claim is of Rs. 50000, and the admissable claim is Rs. 48000. If the copay is 10%, the copay amount would be Rs. 4800. The Total amount you would have to pay is Rs. 6800/- (Rs. 2000 deduction in the policy + Rs. 4800 of Copay)

Copay is currently in

- Oriental Happy Family Floater at 10% of the Sum Insured upto Rs. 5 Lakhs Sum Insured.

- Bajaj Allianz has a copay of 10% for treatment at Non-Network Hospitals in their Health Guard products, and 20% in Silver Health.

- Star Senior Citizen Red Carpet has a copay of 30%. For Pre-existing the copay is 50%.

Bottomline:  Know what you will not get paid.


Health Insurance Advisor India

# 5 Understand Day wise Cash limit Health Products:

There are some products marketed and sold as Health Insurance (Aegon Religare Life, Tata AIG General are the popular ones) which provide a daily cash benefit for the no. of days one is hospitalization. Most surgeries require an average of 6-10 days, so at the Rs. 5000 per day limit multiplied by 10 Days would pay Rs. 50000 per hospitalization, irrespective of the actual charges incurred. An Angiop lasty in this will unknowingly burn a big hole in your pocket. Please avoid this product for your core healthcare expenditure risks or as an alternative to a Standard Health Insurance product. 

Difference between Health Insurance and Daily Cash Limit Products

This product is more like an add on cover.  

Important Note: Do not confuse the above with products that have specific limits on Room Rent. Room Rent Limits, to an extent, make sense both for the customer, as well as the Insurance Company, as they categorize people paying a higher premium in the higher eligibility bracket. This has been further discussed in detail below in this article.

Bottomline:  All plans which are called Health Insurance, may not be what you are looking for.

 # 6 Zero in on a Coverage amount/Sum Insured:

Sum Insured is the total annual liability under the policy. Since this is a long term product, you should look at the maximum available cover you can afford. Remember, a sum insured of Rs. 2 to 3 Lakhs will have no value, by the time you start using it. As per a very recent report on Healthcare in India by Tower Watson, the medical inflation in India is rocketing anywhere between 17 to 20% annual.

Option of Upgrading Sum Insured:  The option of upgrading the cover at a later stage when you are older is dicey and complicated. There could be a requirement for a medical test. Moreover, if you or any of the family members contract a new disease in the interim, the ailment would excluded for the upgraded amount. Upgrade would be almost like taking a new policy at that age, which I would not recommend.

Bottomline: Look for the highest cover affordable. An I-will-upgrade-it-later option may not work.

 # 7 Premiums change, know how?

Premium in Health Insurance increases as per increase in your age, but, there’s something about the no. 45. Insurance Companies dislike this no. Have a look at the rate charts, and you will be surprised to see good jump in premiums after one crosses the age of 45 yrs. In some cases, the increase in premium is as high as 50%. You need to factor this, before you sign up Comparison of premium in Old Age for Health Insurance in India.

Ensure premium remains affordable in your retirement days, and does not kill your hard earned retirement savings.  

Note: you need to factor in that these premium charts can change even tomorrow, like they have changed earlier, but looking at the current charts for older brackets would get you a flavor of the company’s pricing philosophy for older age bands.

Note, the average premium in the chart is the average of premium paid by a person between the age of 30 and 65. The values being compared are only indicative. Future rise in premium due to loading, change in premium charts have not been taken to consideration.

Bottomline: Know how the premiums change in the long run.

  # 8 Credibility, Check.

Look at the history of the company. If it is a new company, you could look at the history of the promoters and their businesses. Generally, a company or set of promoters known for their ethics and excellent governance, venturing out into Insurance would be a decent bet. Get information from your advisor, on the overall claims experience, on responsiveness, about changes and number of changes in the product, since it was launched.  Too many or too large changes, indicates there could be more tomorrow.  

Bottomline: History in the best teacher.

  # 9 Products for older age/Senior Citizen family members.  

Most Insurers, including the ones ‘specialized’ in Health Insurance resist covering members above 45 years. Remember, you need to somewhere take responsibility of not covering your parents, earlier in their life, and not completely blame Insurance Companies for not covering them, now.

There is no perfect product available for Senior Citizens. All products for senior citizens are restrictive. You need to settle for a product, best affordable to you, even if it has co-pay, exclusions and other restrictions. Again, if your parents have existing ailments, then this becomes more complicated.

Comparison of Senior Citizen Mediclaims

Bottomline: There is no Perfect Product. Definitely not for a Senior Citizen.

  # 10 Finally, Ensure you have a Good Advisor:

I have always said this, ensure you spend good time in deciding, who is your intermediary. Once you have taken pain to finalize a good advisor, you are more than half way done. 

A Good advisor is one who would provide:

  1. Unbiased advice, without any special affiliation to any Insurance Company.
  2. Provides Routine services like Pickups, Renewals etc.
  3. Assists and Guides you at the time of Claims.

Health Insurance industry is witnessing huge changes both in products, price as well as processes, being an insider, it is sensible to have an expert on your side, who updates you on changes, their impact on your coverage and suggest change in course, in case necessary.

Bottomline: Insurance Company have their own vested interests. Have someone on your side.

Note: There are other terms & benefits comparable like Pre and Post Hospitalization, Benefits like No Claim Bonus/Discount, Loading on Premium due to Claims History, 1-2 or 4 year waiting Period for Specified Ailments, Pre-Existing Waiting Period. These have not been considered as they do not make a very big impact on the decision to purchase a long term Health Insurance product in India.

 Health Insurance Advisor India

An open letter from a Health Insurance Customer

Dear Insurance Company,

Hi, I am your Mediclaim Customer. I am 30 years old, married, have a kid. I own a house in the suburbs of Mumbai and have recently bought a small car. I am well read, and hence fairly aware of basics of financial planning and securing my future. Yes, I believe in Insurance. I bought my first insurance policy (term life) when I was 23 years old. Yes, I know, I am the type of customer, who you vie for – I am the one who appears as “Sec A2” - target customer right at the top of all your sales spreadsheets and presentations. 

I have been your customer since 2007. It started off pretty well. I received fairly good service from your end. But…lately, I have been very uneasy with our relationship. In fact, I think I have lost trust in you. OK. Stop getting surprised; I know you are  part of a group valued in Multi billion dollars ; I know you have presence in 100s of countries worldwide, you surpass all the solvency norms set by the regulator, and yes, your claims settlements are improving . But I have still lost trust in you. Can you help? Please give me your 5 minutes to explain.

Health Insurance Advisor India

4 years back, when I was 26 years old, I decided to buy my own health insurance policy. I had a cover in my dad’s policy, but my calculations showed that I was not covered adequately. I therefore approached a health insurance broker. He did a good job, helping me compare various mediclaim policies available in the market, and took me through how this whole mediclaim thing works. I signed up for the most attractive one (the one which had the best features and the lowest price).  I was proud I had done my homework, just like my dad would.

2 renewals had passed, when I received the 3rd years' Renewal Notice. The renewal notice talked about increase in premium by a shocking 500%, with the reason “adverse claims ratio and Medical Inflation” mentioned on the letter. A premium of Rs. 3000 for 2 Lakhs coverage for a family of 3, has increased to Rs. 13000! OK, I understand Medical  inflation, but I am sure it wouldn’t have been grown more than 50%, then how was the remaining 450% increase in premium to be understood? Did I have a role to play in the adverse claims ratio you faced? Could I have helped avoiding it? At first, I was sure, the premium mentioned was a printing error, but when I realized it was correct, I felt cheated and went berserk. I called the Broker (who himself was shocked, and worried), set up con-calls with the Insurance Company’s representatives, escalated the matter to the regional office, all I received were templated/recorded answers....Phew...I finally gave up.

I refused to renew the policy with this company, and heroicly pledged not to deal with this organization ever. My Broker suggested I port my mediclaim policy to another player. This time, I made sure this player was an ethical, reliable name. I finally zeroed on to a large Insurance company which had an alliance with supposedly “the world’s largest insurance company”. 

I moved on.

Cut to today, I recently received a call from my Broker, the health insurance company had removed the No Claim Bonus of Discount completely from my renewed policy this year, without citing any reasons at all. I got this strange feeling of déjà vu.  Forget prior information, I was expecting some communication from this big brand, but there was none. 

In this world of extreme transparency and hyper competition, I am amazed at this unusual apathy shown by the best of world Health Insurance Companies in India.

When I called the Insurance Company representative, all he said is that Medical Insurance is a “yearly contract”, and terms are subject to change on renewal.  A yearly contract!??!!? Whoa? When this medical policy was sold (twice by different providers) to me, I was explained various clauses in details like 2 years waiting periods, 4 years continuous renewals and the USP – “lifetime guaranteed renewal”. How can a mediclaim which assures lifetime renewal be a yearly contract?? Isn’t this a classic paradox?

OK, I know you are busy….So let me stop complaining, forget the past, and give you one more chance, the last one. Let me plan for my all critical post retirement/old age Healthcare costs. So now I understand the mediclaim policy is a yearly contract. I understand, you are making losses, you are unable to control the claims in Health Insurance and you are “forced” to make these “small” changes in the contract, every year. And yes, I should feel fortunate, that second time on, you atleast did not increase the premium by 500%.

I understand all that, but looking at the rampant changes you have been making in the policy wordings and process, I am really in a fix. I am now not sure what the policy would evolve into when I reach my old age. The way things are moving, the one thing, I am sure of is that the policy would be gravely different from what it is today (I am sure, a money making product for you, by then)

So, How do I predict the policy conditions and plan my post retirement healthcare expenditure?

Till when, and to what extent you would keep changing the terms? How do I assure myself, that the terms would be favorable for someone like me who bought his policy at 26, paid you premium, without claims for 14 years, from someone who is 40 that time and is buying a fresh policy??

Now, I am getting really confused. When you sold the product you encouraged me to buy these, clearly calling them "long term investment", and now, on renewal you are calling it a “yearly contact”.

Would you continue to guarantee lifetime renewals, or would you add restrictions on co-pay, remove no claim bonus, remove all large hospitals from the cashless network or worse, spike the rates by 500% every year, when I am growing older?.

 Now, it's all boiling down to plain trust. How should I trust a selectively transparent, for-profit organization like you? 

Is Mediclaim a policy with long term commitments or is it a yearly contract?

Would love to hear an answer. Can you help?



Your Health Insurance Customer.

Though, the concern being raised is real, please do note that, this is a work of fiction by the writer.  The Insurance companies described in this post, do not add up to targeting any specific company.

Health Insurance Companies India

A few days back, IRDA, the apex regulator of the Insurance Industry released a circular giving guidelines on introduction of portability of Health Insurance/Mediclaim in India with effect from 1st July 2011.

(Note, there are certain companies which offer portability of benefits to their products even today, but this is as per their own guidelines and procedures. Inquire with us, if you are interested)

The initiative to bring in a process and guideline to enable portability is a welcome step by IRDA. The circular released displays great intent on the part of the regulator to free the customer from being stuck with the same insurer, fearing loss of benefits of continuity, thus kick starting a competitive health insurance environment.

Ofcourse, there are flip sides and apprehensions. Government Insurance Companies hold more than 60% of market share in Health Insurance. Even today, Most in the industry are aware, that Govt. Insurers, leave other complex issues, are not equipped to port their own policy smoothly from one intermediary to another even in the same divisional office!  Owing to empanelment of multiple TPAs at every divisional office of Govt. Companies, there doesn’t seem to be a global customer-wise health insurance database readily available to retrieve past claims information, even within the same company.

 What will be the process for a policyholder to port his policy?

-          The policyholder will apply in the usual process (like a fresh application) to the new Insurance Company, providing current personal and health details of the family members to be covered in the proposal form.

-          The proposal forms are likely to have a section to enable portability. Information regarding previous coverage would be captured. Customers may have to also attach proof regarding previous continuous coverage.

-          The usual underwriting process would be carried out by the Insurance Company to assess the risks in the proposal.

-          If the proposal is accepted by the Insurance Company, the Insurance Company will have to provide relief for waiting periods which the customer has already gone through in the previous insurer’s policy to the extent of the previous sum insured.  For instance, in case a policyholder has been continuously renewing his policy for last 4 years with a certain Insurance company and now wants to port to a new Insurance company which has a 4 year waiting period for a list of ailments, such waiting period would be waived for this customer, through a credit of 4 years from the existing insurance policy. 


How will portability help customers?

Portability will empower unsatisfied consumers to move to an Insurance Company of their choice. Especially in the Retail segment, Portability will bring in more competitive environment and better service experience.  In the current scenario, renewal of health policies is the headache of the customer. In the portability scenario in the long run, Insurance Companies will have to win their renewals through better service, responsiveness and claims experience. The no. of policies an insurer is able to retain will reflect the customer satisfaction.

What would be the impact on premiums?

There is a good chance of a price war in the younger age segment. Insurers could slash premiums in the lower age bands to attract portability of existing customers.  

On the other hand, portability are not likely to help policy holders in the older age bands (say, 50 and above) and policyholders who suffer from pre-existing ailments. As such proposals are likely to be denied by the new Insurance Company.

Sudhir Sarnobat says: “Remember, Coverage in Car Insurance factors in depreciation, which is not the case with Health Insurance”, here the new insurer will take the risk as a fresh risk with full coverage and only increase in premium without factoring something like the degeneration of the health.” For instance, a policyholder at the age of 65 would like to move to a new Insurance company accepting the premium of the new insurance company. The new insurance company taking up a case exposing itself to a significantly higher risk of claim, without enjoying premium for the past claim free period, which the earlier insurance company enjoyed. So in effect senior citizens and people with pre-existing ailments (especially chronic ones) would not benefit a lot from portability.

Would Insurers be bound to accept a proposal for portability to their product? Can they reject an application?

 Note, the proposal and underwriting processes of Insurance companies will not change due to portability. The sum insured in the expiring policy cannot be the basis of what the new insurer will be ready to accept. The acceptance of risk would depend on the normal risk underwriting process. In fact, due to an already existing policy being declared for portability, the underwriting could demand additional claims history information for the past policies from the customer.

Once and if the proposal is accepted, the waiting period credits would have to be given in the new policy. The underwriter of the insurance company continues to hold the discretion to deny a proposal.

What happens if the customer applies for an increased sum insured in the new ported policy?

For instance, if the customer has a policy been continuously renewed for the last 5 years and has a sum insured of Rs. 2 Lakhs, and now he/she wants to port the policy to another insurance company with a higher sum insured of say Rs. 5 Lakhs. The portability relief in waiting periods in the new policy would only be to the extent of Rs. 2 Lakhs sum insured.  The waiting periods for the additional sum insured of Rs. 3 Lakhs would similar to a fresh policy.

What are the important things to take care when applying for portability?

- A customer looking at moving out to another Insurer should start the application process atleast 45 days before the expiry of the existing policy. This will give ample time to the new Insurance Company to underwrite and accept the risk and then retrieve information from the earlier Insurance Company. 

- The customer should preferably employ a Broker. Since a Broker deals with all Insurance Companies, one would get good guidance and advise regarding the Insurance company to select.

How will sharing of data between Insurance Companies on a common platform affect the consumer/industry?

Firstly, Insurance companies, especially the government companies and many private players do not seem to have a CRM in place, which can retrieve Policyholder wise data across various years of renewal. Secondly, there is no unique id or account number across Insurance companies for the information for one policyholder to be consolidated. IRDA in December 2010 did talk about an unique Insurance Account no.  Only once this unique number issuance is effective across all companies, the consolidation and hence sharing of information would be possible.

Some questions which we expect answers in coming times:

 1.  Insurance Companies would have to make major changes in their processes and database infrastructure to be able to retrieve information of one customer across several years of renewal. In case the customer has moved from one divisional office to another, then the issue becomes even more complicated.  Most government insurance companies are not interconnected to retrieve information of one customer across divisional offices.

2. Till the unique Insurance Account no. becomes effective across all Insurance companies, there would be no consolidation of data possible. Insurance companies would have to share information on a case to case basis. This is going to be an extremely tedious process, with huge bottle necks.

3. We expect more clarity on binding the insurance company of the expiring policy to provide the required information to the new insurer in specified time limits, so that smooth portability can operate. Any mischief here could result in major hiccups in porting the policy.

4. The circular currently only talks about credit for waiting period for continuous renewals and not for credit related to No Claims Bonus or Discounts, which is fair as retrieving information regarding claims is even more tedious in the current data management infrastructure.


We are observing a fast growing interest from Small and Medium Businesses/Enterprises for Group Health Insurance. Group Health Insurance in India has gradually become a benchmark benefit as well as a retention tool for every employer.

Here are some basic Do's and Don'ts created from our experience in managing Group Health Insurance for SMEs:

1.       Take a minimum 2 Lakh cover for employees:

Most policies now have a Room Rent limit of 1% and 2% for General and ICU Claims. In major cities, shared rooms in decent hospitals (and sometimes not decent ones too), cost anywhere close to Rs. 2000/-. A cover above Rs. 2 Lakhs will ensure your employees get a good room and enjoy the benefits.  The entire perception of providing benefits would change, if the employee would be required to pay half of the room rent from his own pocket.

2.       Linking of other expenses to the Room Rent:

Hospitals charge various expenses, like Surgery Costs, Doctor Consultations differentially according to the room the patient has selected. For instance, the doctor consultation fee for the same doctor is higher (mostly proportionate) to the kind of room you have booked. So, a Doctor consultation can cost Rs. 500 for a shared room and Rs. 1000 for a Private AC Room.  

Insurance Companies could cap such expenses with the room rent. So when you upgrade your room from a shared room which costs 1% of the Sum Insured, to a Private room which say costs 2%, the general impression is that only the difference between the room rent costs would be required to be paid from our pockets. Note, some insurance companies or policies limit their expenses to the proportion of room rent limit. In the given example, the limit could be restricted to 50% of such expenses. This could be a major blow to the insured/patient’s wallet.  

3.       Take abundant care before covering Parents:

“That’s mean!” one of our clients said, when we asked them to drop parents cover from the group cover.  The problem is yes, we do play mean (the geometric one) between the Insurance Company and the Insurance Client. Parents cover is not sustainable in the long run, since it has proven to be hugely loss making for the Insurance Company.  

If you must cover parents, the other options would be:

- Get the Employees to pay for it. [OR]

- Put a minimum co-pay of 30% on the claims from Parents.

4.       Opt for Photo-less cards:

Photo Cards maybe more attractive for you and your team, but the mess that it can create is unimaginable.  Having photo-less cards, ensures the right person gets the right card, on time, every time.

5.       Maintain Sufficient CD Balance:

In most SMEs (and in many large companies too), list of Additions & Deletions are provided once a month. In true benefit, the new recruits need to be covered from their date of joining. A sufficient premium balance, to debit and cover the new recruits should be available with the Insurer on that date of joining.  This will also take care of any claims on hospitalization that may occur between the periods.

6.       Pro-rata V/s Short Period Additions:

Unless specifically waived, some insurance companies (notably ICICI Lombard) calculate additions and deletions for SME accounts based on Short Period premium. The premium that gets debited at short premium method is much higher than the standard pro-rata method of debiting/crediting proportionate premium.  Get the short period calculation waived in favor of pro-rata.

7.       Insist on Printed, Signed and Stamped Policy Wordings:

Many offices of Govt. Insurance Companies in particular do not provide printed, signed and stamped policy wordings.  Insist on the same. Take an hour out and read it carefully.

8.       Know Time bound Claim Procedures:

In a bid to control claims, Insurance Companies, particularly the Govt. Insurance Companies have reinforced and tightened claims procedures, since June 2010. Claims are rejected on not meeting the claims procedures related to intimation and submission of the claims. Get a detailed download of claims procedures, particularly the time bound ones.

9.       Insist on Claim Reports. Keep a tab on them:

Ensure you get regular reports on claims from your Insurance Company or Health Insurance Consultant/Broker. Analysis always helps.  Understand the claims in detail, and if necessary explore tweaking the policy conditions to control the subsequent year’s claims. You need to manage your claims and balance the benefits to avoid abuse/misuse – this will help you keep your health insurance costs in control.

10.   Employing an expert does not cost you:

Employing a specialized Health Insurance Broker is very smart. It does not cost you as they are paid brokerage by the Insurance Company selected by you. On the other hand, it pays to have a good Health Insurance Broker, as they can help you:

-          Structure/restructure your employee health insurance scheme, making it more long term, without hurting the core benefits. 

-          Help you understand policy benefits, conditions and procedures.

-          Take away the pain of administering the policy, adding/deleting members.

-          Keep you updated on changes in procedures/policies. Help you manage the change.  

-          Educate & Assist your employees on Claims settlement – both cashless & reimbursement.


Medimanage is the only Dedicated Health Insurance Broker in India. It provides expert advisory, end to end processing and administration of the policy round the year, and professional claims assistance, including cashless claims coordination to Fortune 500 companies and home grown corporate giants since 2005. Know more about Medimanage.

-          Medimanage, itself being an SME, recently opened up a dedicated cell to provide its services to SMEs. Here's a brief presentation of the services. Group Health Insurance for SMEs

-          Fill in the the inquiry form for a customized quote.

The Indian spirit of enterprise has been celebrated across the world. India is home to the one of the largest Small & Medium Enterprises (SMEs), with an estimated 35 million enterprises, constituting 80% of the total number of industrial enterprises.

Entrepreneurs and Key executives running SMEs compete with larger companies to attract and retain talent are under great pressure to benchmark remuneration and benefits, including Group Health Insurance Benefits.

On the other hand, Health Insurance has become a necessity. With the healthcare inflation skyrocketing, it’s going to become increasingly difficult for employees to take the risk of wiping off their complete savings or worse get into debt for paying the hospital bills. Entrepreneurs can balance the financial risk by benchmarking employee benefits at the same time help encourage financial coverage and prudence.

So how do you go about it?

Insurance is all about pricing the probability of risk. Insurance Companies buy risk by foreseeing a smaller loss (claims) than the premium.

Group policies being less restrictive, the smaller the group the higher the probability of claims, hence smaller groups have more expensive per unit premiums. For example if an Insurance Company covers a group of 10 employees for say Rs.40000 per year, and does not have any waiting period for ailments. Given the high costs of healthcare today, just one accident or hospitalization can wipe out the premium paid.

If in the long term, an enterprise wants to get a good product and service – like any other vendor, it has to ensure that the Insurance Company makes money out of the product/service. 

Many large companies are paying the price for ignoring at the viability of the coverage. Premiums for most of the large companies in the last couple of years have grown by close to 50%.

SMEs could also fall in the same trap, and lose long term predictability of their employee benefits costs. Here are some basic level recommendations on the approach one should take when looking for a Group Health Insurance program for employees.

1.       Employee size of less than 20.

A Group plan is not recommended for such a firm or organization.

A better way to handle this is to sponsor the personal policies of your employees. Create premium limits like other employee benefits and encourage the employee to buy his, own personal health insurance.

By giving a fixed amount, you are giving flexibility to the employee to get a policy that he needs, at the same time the liability of the enterprise is fixed.

Though a 10% increase in limit is recommended, it still is a more predictable cost than a group plan. The personal policy being owned individually by the employee does not bind him with the organization. It’s more of a welfare tool, than a retention one.

Though it would depend upon company to company, A Limit of Rs.5000 per employee for ground staff and Rs.8000 limit for senior employees should suffice.


The organization should help identify a specialist health insurance firm which can give good advice and service (including claims assistance) to the employees.

Market: Currently no group plans are available for such organizations.

2.       Employee size of 21-50

Though Group Mediclaim Plans are available for such enterprises, it is very important to understand the long term impacts and structure them well. Everyone would agree that it is very convenient to launch a new employee benefit program, but, it is very difficult to withdraw or curtail one.  

For organizations, where the health insurance plan was not structured well, Health Insurance costs have spiraled by more than 50%

Some tips:

1.       Try to attempt, if you can convince the team about sponsoring the purchase of their personal insurance, similar to the less than 20 employees companies. It makes great sense. The point you need to sell is that they own the policy and can carry forward across their entire lives, unlike the group policies offered by large companies, but are not portable to be renewed independently.

2.       If point 1 does not work out, structure the plan very carefully. Employ restrictions and exclusions wherever necessary. For example, you shouldn’t provide a pre-existing, parent’s cover or maternity cover under such a small group else, your premiums would rocket every year by a minimum of 30%.  Since group plans being tailor-made, employing an expert in this field can help you understand how the structuring can happen, and have a clear tab on your future costs.

Market: Plans available with Apollo Munich, Star, Bharti etc. are available

 3.       Employee size of 51 to 100

Group Mediclaim Policies could be provided here, but again, these should be structured for the long term.  Such policies should not cover parents and maternity benefits. In companies of this size, an intermediary who is an expert in advising a tailor made program as well as more importantly managing claims and their grievances, is pertinent. The HR or Administration department of such companies is generally managed by one or 2 staff. It would be very difficult for such a department to handle enrollments into the program and claim. A specialized health insurance expert, who manages claims, could be ideal.

Market: Plans available with ICICI Lombard, Apollo Munich, Star etc. are available

Other Important tips:

1. Unlike Group Health Insurance which is a benefit, Group Personal Accident is a must for enterprise of every size. Enterprises are at risk of liability financially and morally for any employee who is disabled or loses his life while travelling for work. Thankfully in India, Personal Accident Insurance premiums are the cheapest globally. A Rs. 5 Lakh cover for one employee will cost around Rs. 700 annually.

2. Always, identify a good advisor (preferably an Insurance Broker) with demonstrated experience in Health Insurance Advisory and Health Insurance Claims. As the no. of insurance companies and products increase, there would be more benefits, conditions and procedures – a good consultant would more than pay for his costs.

2. When you are buying a Group Insurance for less than 200 employees, be open for restrictions, which are fair and help containing unnecessary expenditure. For instance, Room Rent Limits applied (Limits on per day costs of Room Rent) are good. It has been observed that employees start taking more luxurious rooms when there is no limit. Few would know that a change in the room increases the cost of all expenses incurred. A Doctor visiting you is charged differentially in different rooms.

3. Remember you can add/delete employees by paying/getting credit of proportionate premium for the remaining year.  

4. Keep a tab on the claims, and try to understand them. This will help you understand the economics of Health Insurance better, tailor a better program, and negotiate a better deal next year


Medimanage is the only Dedicated Health Insurance Broker in India. It provides expert advisory, end to end processing and administration of the policy round the year, and professional claims assistance, including cashless claims coordination to Fortune 500 companies and home grown corporate giants since 2005. Know more about Medimanage.

Medimanage, itself being an SME, recently opened up a dedicated cell to provide its services to SMEs. Here's a brief presentation of the services. Group Health Insurance for SMEs

FIll in the the inquiry form for a customized quote.


Bajaj Allianz as a company is best known in the health insurance industry for its focus on health insurance and quality servicing. It has set some good benchmarks for the industry including being the first company to introduce in-house claims processing for Health Insurance in India.

Very recently, in what seems to be a bid to cover the medical inflation (of around 12-15%) and sustained increasse in claims, Bajaj Allianz announced a revision in terms and conditions of their health insurance products - Bajaj Individual Health Guard and Bajaj Family Health Guard.

The changes made are as follows:

15-20% increase in premium.

Bajaj's Health insurance products have been around 10-20% more expensive than products from government companies (that are more restrictive on various conditions like room rent limits compared to products from private companies.) The new increase of 15-20% will make the products all the more expensive, unless other companies, especially Govt. Companies take cue.

Health Insurance being a yearly contract, Insurance companies can increase premiums at the time of renewals, subject to approvals from the Govt. Regulator - the IRDA.

Note, This premium change will also be applicable to existing customers on renewal.

Introduction of Loading:

Following the trend of Insurance companies introducing loading in their products, the revision envisages a premium loading clause against high claims as follows. A "premium loading" clause provides for jacking up premiums based on claims

Bajaj Allianz Family Health Guard:

"30% Loading applicable if 3 or more claims paid amounting to Rs. 50000 or more in previous 3 years. Loading will be applied at the policy level"

Bajaj Allianz Individual Health Guard:

" Loading will be applicable for policies where there are 3 claims (paid) or more in previous 3 years with total amount exceeding Rs. 50000/-. The applicable loading will be 50%. Loading will be applicable considering the expiring 3 policies (max 3 years) and will be applicable fresh on every renewal"

This simply means that if Mr. Shah who has covered his family of 4 with Bajaj Allianz Family Health Guard, has 3 claims in the past 3 years for any of their members, where the total of all claims is more than Rs. 50000/-, the premium on renewal of the health insurance policy would increase by 30% from Rs. 8000/- to Rs. 10400/-.

Hospitals overcharging Patients under Cashless Claims is under the media buzz since a few days.

Here is a quick post which reasons why Hospitals overcharge Cashless Claims:

No Contracted Rates with Hospitals:

TPAs do not have contract binding rates (treatment-wise) with Hospitals in their network. Globally, TPAs contract treatment-wise rates with each Hospital in their network. Treatment wise fixed rates would remove the disparities and anomalies that Hospitals currently enjoy. The core of the issue is TPAs lack negotiation power with Hospitals.

Why do TPAs lack negotiating power?

In India, more than 70% of the total hospital billing is still out-of-pocket and not through Insurance Companies or TPAs. Hospitals are overflowing with patients and therefore don’t depend on TPAs for their revenues. (Imagine a 100 employee TPA bidding to negotiate with a Hinduja, Apollo, Fortis or an Escorts?)

1). Insurance Companies under demands from Large Corporate Customers to list a large hospital, unconditionally pressure, TPAs to include certain hospitals into their network, without rates.

2). Add to this, TPAs are also under pressure to have a large and geographically wide list of close to 3500-4000 hospitals under their network. Due to such a large spread of hospital payments in the network, they cannot guarantee revenue to hospitals, which is the trump card for Health Claims Administrators worldwide.

3). Every division of a Government Insurance Company in a bid to offer the option of a TPA to large customers, use services of 6-8 TPAs. Customers are therefore spread across larger no. of TPAs.

4). Customers (especially Corporate/Group) want to decide their hospital. TPAs currently don’t take the healthcare responsibility of recommending hospitals. Hospitals therefore get 'business' on the decision of the consumer and not the administrator.

Delayed payments to Hospitals:

This is the justification each hospital will give. Insurance Companies (mostly Govt. and some Private) due to their internal deep rooted inefficiencies have been guilty of delaying payments to TPAs. TPAs being small sized companies depend on funding from Insurance companies and therefore in turn delay payments of the Hospitals. Some Hospitals in need of liquid cash, have been known to discount their authorized cashless claims with Banks and Financial Institutions, ofcourse at a cost. Every Hospital would be ready to reduce their costs if they are committed to payments in say, 30 days. 

Recently a new Insurance company has been sucessful in negotiating better rates with Hospitals on the contracted committments to pay on time, with interest penalties.

Lack of Uniform Grading:

There is no regulating apex body or uniform grading of hospitals in India, which makes contracting of rates with Hospitals all the more subjective and unscientific. Rates charges are merely based on location and popularity and not on the quality and consistency of the care and treatment.

Recommended Solution:

Apart from the recent kneejerk delisting/reduction in number of hospitals (to ones which agree to contracted rates), by Insurance companies, here are some solutions our experts recommend. 

1). Health Insurance premiums have grown by 10 times in 5 years. Insurance companies should work towards increasing their negotiating capabilities with Hospitals, by bringing revenue dynamics into picture.  

2). Govt. Insurance Companies should reduce the fragmented way in which it engages TPAs. This will bring more business to lesser no. of TPAs, and hence bring administrative and financial control on claims.

3). Insurance Companies should lobby with the Central Government and Ministy of Health and Welfare to bring in an apex body which enables self regulation and grading of Hospitals and other Healthcare providers.

4). Selection of Hospital Network should be based on quality of Healthcare. Like the "gatekeeper model" in the west, TPAs should be empowered to take responsibility of healthcare beyond negotiation of rates. They should be in a position to recommend the healthcare provider to the customer.  

5). Insurance Companies and TPAs should take into account demography and economics and scientifically fix a schedule of treatment-wise limits for cashless claims, in its policy condition.This way, Insurance Companies or TPAs would pay upto the limit and leave negotiation of the amount charged over the limit to the Customer. 

Do let us know if you have any questions or feedback. Write to Medimanage @ email [at] medimanage [dot] com.


In the high-performance-high-aspirations age we live, more and more Indians live as nuclear families in distant cities away from their own parents.

Long gone are the days, when Dada-Dadis or even Nana-Nanis used to be the doting baby care guides. In a way, Baby Care today has become a case of trial-n-error internet browsing or picking up a famous book recommended by your nearest book shop.

What better a gift for first time mothers, on Mother’s Day, than a well-researched simple guide to manage their most valuable little ones?

The Book – The Great Indian Guide for Baby Care was launched on the eve of Mother’s Day (8th May) by renowned Pediatric Cardiologist Dr. Abdul Rasheed of Asian Heart Institute Mumbai.

With contributions from leading pediatrics and gynecologists, the well researched eBook has been compiled in lucid language keeping in mind the challenges of today’s young mother.  The eBook uniquely blends global best practices in Infant Baby Healthcare with a rich Indian flavor, perfect for the Indian Household.

The 109 page book is produced by www.medimanage.com; a free web-based Preventive Health Magazine. “We found that most books available in the market today are western, outdated or too thick for today’s tired mommies to go through. That’s when our online magazine thought of writing a simple eBook” Says Mahavir Chopra, Head – eBusiness, Medimanage.com

The eBook, currently available in English, can be personalized as a gift and downloaded from the website at the following link

http://www.medimanage.com/e-book-sign-in.aspx for free.

About Medimanage.com

Medimanage.com (http://www.medimanage.com) is a free India-centric online health magazine focused on day-to-day preventive health. The website provides lucid original content on 9 important aspects of Preventive Health, right from Weight and Diet to Parents’ Health and Health Insurance.  The website was launched in October last year, by Medimanage Health Services Pvt. Ltd. – A Preventive Health Management Company headquartered in Mumbai.

“The articles in the website as much as the chapters in this book are written by professional writers often in layman’s language or even in story form, so that they appeal to readers and encourage a healthy lifestyle.” – Says KS Sankar –Editor-in-Chief of the Website.


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