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A healthy spread

Stand-alone health insurers are making a mark by introducing novel policies that cover everything from joint families to a visit to the dentist.

In October 2007, Delhi-based businessman Chander Amla bought a family floater health insurance policy from Royal Sundaram General Insurance, which extended a combined cover of Rs 3 lakh for him, his wife and daughter.

Two years later, he felt that the amount was not sufficient to cover the rising medical costs and asked the insurance company to raise the sum insured. He was particularly worried about the Rs 1,500 per day room rent cover during hospitalisation.

"The average daily room rent in a reputed hospital is much higher than this amount. Also, the policy covered only those illnesses that require hospitalisation for more than 24 hours. There are so many day-care procedures that do not require hospitalisation for more than a day," says 60-year-old Amla.

"It is the first time that individual cover and family floater have been combined in the same policy."
CEO, Max Bupa Health Insurance

WHAT'S NEW: Family First
It's the only product with a comprehensive coverage for joint or extended families.
It provides individual cover, plus Rs 3-15 lakh for the entire family.
  • Unlike in the existing family floater policies, an individual can cover up to 13 members of his extended family, including in-laws, grandparents and grandchildren.
  • Includes maternity benefits and newborn baby care.
  • No involvement of third-party administrators as company executives manage claims personally.
After several of his calls to the company went unheeded, an insurance broker advised him to buy Max Bupa's heartbeat policy. It matched his needs better with an individual cover of Rs 3 lakh for him and his wife.

"In this plan, there is no cap on room rent. Moreover, the policy covers medical expenses that do not require hospitalisation for more than 24 hours," he says.

Indeed, new stand-alone private health insurance companies, such as Max Bupa, Apollo Munich Health Insurance and Star Health and Allied Insurance, are making their presence felt by unveiling radically different products for individuals and families alike and, in the process, offering comprehensive covers across age groups.

"Today, we have products with a lifelong policy renewal feature, covering you from cradle to grave," says Antony Jacob, chief executive officer, Apollo Munich, a joint venture between the Apollo Hospitals Group and Germany-based Munich Re.

The penetration of health insurance in India is abysmal, with only about 1% of the population being covered under any form of health insurance, according to the National Council of Applied Economic Research (NCAER). Contrast this with the United States, where 85% of the population is covered, or China at 77% of citizens covered.

This, say private companies, is because products and services are not designed to meet the unique requirements of Indian families. "So far, insurance products in the market have ignored the needs of Indians, but now, pure health players are launching products keeping the Indian customers in mind," says Jacob. Consider Max Bupa, which is owned by Max India (74%) and Britain-based Bupa (26%).

It entered the market in April 2010. The company recently launched a plan, Family First, which covers through a single policy an extended Indian family of up to 13 members, including parents, spouse, children, brothers, sisters, even in-laws, grandparents and grandchildren.

It offers an individual cover for each insured person-ranging from Rs 1 lakh to Rs 5 lakh-apart from a floating insurance cover that is available to all family members. This is a big departure from the industry norm, where family floater products cover only nuclear families with a maximum of two adults and two children.

In addition, the maximum sum insured in the usual floater policies is Rs 10 lakh, whereas Family First gives a coverage of up to Rs 15 lakh.

"The product has been designed keeping in mind the needs of joint families. It is the first time that individual cover and family floater cover have been combined in the same policy," says Damien Marmion, CEO, Max Bupa.

The plan has other unique features. It offers maternity hospitalisation and care for newborns, features that were till recently available only under group mediclaim.

Max Bupa, which is connected to over 600 hospitals across the country, was also the first insurer to introduce 'single age band pricing' products. Here, the company determines the premium solely on the basis of the individual's age.

"So it helps avoid a sudden spike in premium when an individual crosses a particular age limit," says Marmion. Although Max Bupa's policies are 15-20% costlier than similar products by its competitors, customers are willing to pay the charges, he adds.

Another fleet-footed entrant is Apollo Munich, which flagged off operations in August 2007. Health insurance policies issued by nonlife insurers typically do not offer cashless treatment at OPDs or outpatient departments, and health check-ups.

However, Apollo Munich's product, Maxima, has started offering cashless inpatient and outpatient treatment for the first time in India. The plan is available for both individuals and family, which can include two adults and two kids.

While the sum insured for inpatient treatment is Rs 3 lakh, the limit on OPD expenses varies between Rs 5,000 and Rs 7,000 at any of the over 1,500 pharmacies, diagnostic centres and consultants empanelled by Apollo Munich.

"Forget the big diseases, we offer insurance even for allergies, sore throat and cracked lips. The aim of this product is to shift the focus from curative to preventive coverage," says Jacob. The company is expecting to sell over 5,000 of these insurance policies by the end of the financial year.

Star Health and Allied Insurance, which started operations in 2006, also has a first to its credit. It has launched the maiden health product for diabetics, Diabetes Safe, which covers the cost of hospitalisation for up to Rs 5 lakh. Diabetes often leads to complications in kidneys and eyes, and can cause crippling foot ulcers.

"Today, we have policies with a lifelong renewal feature, which cover you from cradle to grave"
Antony Jacob
CEO, Apollo Munich Health Insurance

WHAT'S NEW: Maxima
It's the only product that covers cashless OPD expenses, health check-ups, eye and dental care.
In the case of both individual and family floater policies.
  • Medical expenses that require hospitalisation for less than 24 hours are covered.
  • Half the unused OPD entitlements can be carried forward to the next year.
  • Cashless inpatient and outpatient treatments, the first time in India.
  • No age limit for renewal of an insurance policy.
India has the world's largest population of diabetics: 51 million and counting.

"Anyone diagnosed with type II diabetes can take this policy between 26 and 65 years of age and can get renewals till 70 years," says V. Jagannathan, chairman and managing director, Star Health and Allied Insurance.

The company also has a product for HIV positive patients.

Star Health, which is available at more than 4,600 hospitals, also has topup health policies that give extensive medical coverage and are cheaper than the regular policies.

For instance, a Star Super Surplus top-up for Rs 7 lakh costs around Rs 7,500 per annum for an individual, while a regular Oriental Insurance policy for Rs 3 lakh costs Rs 8,500 annually.

In India, public sector companies still account for 58% of the health insurance market. But private companies are making inroads and the stand-alone ones have taken 12% of the total market share.

Novel plans, which focus on Indian customers, will certainly improve the sector. The growing competition will mean that the customer will truly be king in the future and is likely to be spoilt for choice with comprehensive coverage.