Buying a health insurance policy is often recommended to be the first step towards financial protection, even before one starts to save for financial goals. However, at times, it becomes difficult for someone to buy it because of the varying benefits it offers. Even though the structure and features are somewhat standardised, comparing them becomes difficult. Also, choosing one amongst many with different add-on features becomes difficult.
This is set to change once the draft guidelines are finalised and new rules are framed. Buying health insurance may become easier than it is now. IRDAI has issued draft guidelines that will make available a Standard Health Product across the industry and will be offered by all insurers doing General and Health Insurance business. It will be mandatory for all insurers to offer such a product.
The Standard Health Product will be uniform across the market with no additional add-ons or optional covers will be allowed to be offered along with the standard product. The proposed Standard Product shall be offered on indemnity basis only i.e. only the expense made will be reimbursed up to the limit of sum insured. No deductible features are permitted under the base cover but a standard Co-Pay mechanism will be allowed and a 5 per cent of Co-pay could be part of the product feature.
In the Standard Health Product, no plan variants will be allowed. Currently, insurers offer several variants with add-ons and hence varying premium thus leaving limited choice to the buyer to select what is required at the basic level. The draft guidelines proposes that Add-on or Optional Covers are not allowed to be attached to the base cover in Standard Health Product.
The minimum basic sum insured under standard product shall be Rs 50,000, while the maximum could be capped at Rs 10 lakh. The standard product shall be offered on family floater basis also and dependent children shall be covered from the age of 0 days to 25 years. It shall not be combined with Critical Illness Covers or Benefit Based covers.
Minimum entry age shall be 18 years for principal insured and maximum age at entry shall be 65, along with lifelong renewability. There shall be no maximum exit age. All the modes (Yly, Hly, Qly, Mly) shall be allowed for the standard product.
Some of the mandatory covers in the Standard Health Product shall be Hospitalization Expenses, AYUSH Treatment, pre and post Hospitalization, Health Check-ups, Outpatient consultations or treatments, Cumulative Bonus.
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