Maternity cover to get costlier

With Irda mandating broader & longer definitions on ambit, insurers say a 20-25% rise in policy cost is inevitable

Maternity covers might see an increase in premium, with the Insurance Regulatory and Development Authority (Irda) advising companies to design comprehensive covers for this purpose.

Insurers said if the mandates by the regulator are followed and products launched under those norms, there could a rise in the cost of such covers by 20-25 per cent.

In clarifications issued recently, Irda had said maternity expenses shall include medical treatment expenses traceable to childbirth (including complicated deliveries and caesarean sections) and expenses towards lawful medical termination of pregnancy during the policy period. Pre-natal and post-natal medical expenses for delivery or termination will generally be excluded from maternity expenses, unless insurers make special provisions for it.

Earlier, lawful medical termination of pregnancy during the policy period was limited to two deliveries or terminations or either during the lifetime of the insured person. This has been revised to lawful  termination during the policy period.

Manasije Mishra, chief executive, Max Bupa Health Insurance, explained: “For several players, the definition of maternity has to be amended. Premiums may have to be revised, if the cover is made more comprehensive.” He added their policy already covered post- natal expenses and also covered the child from the moment of birth till the first year. For Platinum policyholders, the  child receives coverage for immunisation till the age of 12 years.

Experts stated, in general, there were very few retail insurance covers available for maternity benefit. A senior general insurance official said  even if such a cover was offered, crucial segments such as complications in pregnancy were not covered, since the expenses and risk associated was higher. Hence, the official said, due to Irda’s re-clarification on maternity expenses, the policies could get more expensive.

In the usual maternity cover offered under the group platform, insurers said there was a cap on the number of deliveries covered and also on the amount, which could be Rs 30,000-Rs 1 lakh, depending on the type of delivery and complications, if any. If such a cap was not existent, such covers would have a higher premium compared to these products.

Further, based on the experience with the particular group, there could be revisions in the premium made. Segar Sampathkumar, general manager at New India Assurance, said on the basis of a previous experience with a particular corporate/group under the policy, if there was any cost erosion or cost drain, revisions in premiums were made.

Insurers believed with more companies planning to enter the retail market to provide maternity plans, the expenses to provide coverage would also automatically increase. The senior product development official of a private general insurance company said this was because of the complexities involved during childbirth — the liability of companies would be high and so would the price needed to match the criteria.