To your health?

It was long argued that life insurers were better placed to offer health policies than general insurers because they had the vital database of customers. So, it’s not surprising that Life Insurance Corporation, with its huge data bank, is the first to launch a healthrelated unit linked policy, Health Plus, that offers twin benefits and is reasonably priced.

Health Plus offers a lump sum payment if the policyholder has to undergo surgery for critical diseases— and the list is large. The sum assured is capped at Rs 5 lakh.

An investment for your health How LIC’s Health Plus stacks up against regular mediclaim policies.

LIC’S health plus: An investment component allows the health fund corpus to grow Regular mediclaim: Does not have an investment component

LIC’S health plus: Premiums have to be paid regularly and increase with age as per the LIC’s slab rate Regular mediclaim: Premiums have to be paid regularly. Premiums increase with age as per insurer’s slab rate, but vary after a major claim

LIC’S health plus: Claims are hassle-free, provided they are within rules Regular mediclaim: Claim processing can be tedious for large sums. Policies are renewed at the discretion of the insurer

LIC’S health plus: Covers only major surgeries Regular mediclaim: Covers most surgeries, including non-surgical ailments and less critical surgeries

LIC’S health plus: Payments are made in chunks Regular mediclaim: Claims are paid as per actual expenses and these are subject to limits on room rent, etc. However, most insurers do cover expenses up to 60 days pre- and post-hospitalisation

LIC’S health plus: Payments of up to three times sum assured in one’s lifetime Regular mediclaim: Payments of up to 100 per cent of the sum assured every year

It offers hospitalisation cash benefit of a maximum of Rs 2,500 per day for 365 days—particularly useful when hospitalisation does not relate to surgery or the surgery is out of LIC’s ambit. Family members can be co-opted into the plan. However, seniors over 65 have no cover.Like a traditional ULIP, the scheme keeps the unutilised portion of the premium after deducting all expenses in the form of units.

For now, LIC offers just one type of investment plan that combines growth and safety; it is also designed to protect capital.

The fund allows two payments a year to meet medical exigencies not covered under the policy over the existing expense— either a minimum of Rs 2,500 or up to 50 per cent of your accumulated corpus. Says B. Manivannnan, Zonal Manager, LIC: “The policy allows inclusion of new members at a later date in case of marriage or remarriage of the insured or children who are subsequently born—but does not allow for inclusion of others.”

No claims are entertained in the first 180 days of the policy—the exception being accidents. Also, in the first year, the hospital cash benefit is restricted to 18 days, including nine days in the ICU.

Cash benefit is double for intensive care treatments. The list of diseases is huge and covers seven cardiovascular ailments, which require surgery, splenectomy, bone marrow transplant (as recipient), nine diseases involving the nervous system, among many others.

One can make claims of up to three times the sum assured—and this is not a floating cover. The cover, however, terminates upon the death of the insured, and the balance in the fund is handed to the nominee.

The policyholder is free to reduce the number of members in the cover, and is equally free to increase premium at a later date.

Though the insured could have several policies, the maximum cumulative benefit cannot exceed Rs 5 lakh in case of sum assured and Rs 2,500 a day in case of hospital cash benefit.

Following LIC, Reliance Life has launched a heath-related ULIP policy, but there’s a difference: there is no lump sum benefit for critical diseases.

Any expenditure relating to critical illness or any illness that requires hospitalisation has to come from the fund.

Reliance Life, however, offers a critical illness rider benefit—but this is only a rider and lapses on the first use.