Comprehensive health plans better for specific diseases

These are cheaper and offer wider cover than other available options

Recently, public sector insurer New India Assurance did away with the practice of charging extra premium from those suffering from diabetes and hypertension, under its revised health policy. The insurer’s move is aimed at reducing claim procedure.

Some pointed to the fact that this comes close on the heels of new guidelines that don’t allow extra loading, effective October. Sooner or later, all companies would have to comply with this. Currently, health insurers such as ICICI Lombard, Apollo Munich and Bajaj Allianz cover diabetes and hypertension as pre-existing diseases (after a waiting period). New India Assurance would have a four-year waiting period for a cover on the two diseases.

Renuka Kanvinde, head (health insurance) at Bajaj Allianz General Insurance, says the insurer covers diabetes as a pre-existing disease, without any extra loading at any stage of the disease. While ICICI Lombard covers diabetes and hypertension without loading, albeit only mild cases, Star Health has a rider for diabetes cover — it is priced taking into account diabetes-related risks to kidney, heart, eyes and brain.

Increasing cases of diabetes and related ailments have led a few insurers such as Apollo Munich and Religare Health Insurance to consider a standalone diabetes cover. There are also bank-provided group policies that cover diabetes.

How should a policyholder choose between these? While there aren’t any standalone covers yet, experts believe these would come at a price—15-25 per cent compared to health insurance plans. Antony Jacob, chief executive officer of Apollo Munich, says research suggests healthcare costs of a diabetic is 1.5-2 times the cost incurred by a non-diabetic, and the company’s premium would be in line with this finding.

Amit Bhandari, ICICI Lombard’s vice-president (health underwriting & product), says though standalone plans may not cover any other ailment, these might have features such as discounts on diabetes-specific medicines or health check-ups. Before taking a decision, one should carefully weigh the extra premium loading vis-a-vis the sum of benefits.

Experts say insurers who don’t charge extra for covering diabetes may do so after a couple of claims. However, these plans would be helpful for more than one health issue. Group health plans offered by banks cover hospitalisation for any ailment related to diabetes. Typically, these policies don’t have sub-limits, premium loading or co-pay clauses.

S Prakash, executive director, Star Health Insurance, says, “Those who don’t have health coverage yet should obviously buy a comprehensive plan that covers diabetes also, if they suffer or are at risk. But those who already own a health policy can opt for a rider.” Kanvinde says disease-specific covers are required only if the comprehensive cover you have or have chosen doesn’t cover that particular disease.

Premium loading is not a short-term measure; it would increase your annual premium and should be a key determinant of your choice of insurer.

Comprehensive covers have an edge over other options, even in terms of premium. Star Health rider costs Rs 6,385 for a Rs 5-lakh-cover for 25-35 years. A comprehensive cover would cost about Rs 5,000 (26-40 years) for the same cover (Bajaj Allianz General Insurance), while a group policy could cost Rs 10,000-12,000. For group policies, premium increases only after the age of 65, and again after 80. The premium could also rise based on claims or the age bracket.