You may soon be able to build a savings corpus in your health insurance plan. To enhance the reach of health insurance as well as provide wider product choice to policyholders, the Insurance Regulatory and Development Authority (IRDA) is considering a proposal to allow general insurers to launch savings-linked health insurance products.
Currently, savings-linked plans are only offered by life insurance companies in India. The proposed plan is expected to help policyholders choose an integrated product without shopping around the market for building a savings corpus along with health insurance.
Studying procedures
Some general insurance have already approached the regulator to allow them to launch these products, whereby a part of the premium paid will be used to build a savings kitty. A senior IRDA official said the regulator is studying the operational procedures of such products.
“It is an interesting proposition as the savings component will build a corpus for the insured for other medical needs which may not be covered by the policy,” said Sanjay Datta, Chief - Underwriting and Claims, ICICI Lombard.
In 2009, the insurance regulator had allowed tie-ups between a life and a general/ health insurer for products that combine health and pure term life insurance. The move was aimed at identifying premium for each risk. So, life and health insurers would underwrite only the life and health portions, respectively, of the combined products.
However, such health-plus-life products have not really taken off as insurance companies have not been able to get their actuarial departments to address the issue of plan period — health insurance contracts are usually for a year, while term plans are long term. According to Manasije Mishra, Chief Executive Officer, Max Bupa, : “The industry needs to find a way of making these products work as these will be in the interest of consumers and agents.”
deepa.nair@thehindu.co.in