Cigna TTK plans to launch Health Savings Plan

Cigna TTK Health Insurance plans to introduce health savings plan in India if Parliament passes the Insurance Bill.

"Today, health insurance is clubbed with general insurance, and that does not allow us to have long-term products. The Insurance Bill defines health insurance as separate line of business and that would enable us to have long-term products such as health savings plan," says Sandeep Patel, MD and CEO, Cigna TTK Health.

In health savings plan, a part of the premium goes towards a savings/investment account, and the rest covers you from high-risk diseases. For example, today you think you are healthy enough, and you can take care of the medical expenses up to Rs 2 lakh (probably your employer offers you a health cover of Rs 2 lakh), but you want the higher risks to be covered by the insurer.

In that case, the first 30-40% of the premium would go towards a saving account, and the rest would offer cover against expenses due to high-risk illnesses.  

The money in the savings account would be invested across bonds and equities, and would earn returns. One can use the money in the investment account in future for medical expenses that are otherwise not covered by insurance, such as OPD expenses, medicines and co-pay.

"The increase in deduction limit from Rs 15,000 to Rs 25,000 (that was announced in the recent Union Budget) also opens the market for us to launch health savings plan," says Patel.  

Cigna already has health savings plans in the US, UK and Singapore, and it wants to launch the programme in India once the Insurance Bill is passed and health insurance companies are allowed to offer long-term plans.

"IRDA (Insurance Regulatory and Development Authority) liked the idea of health savings plan. In fact, It has been talking about health savings plan for the past three years," he said.