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PRODUCT ANALYSIS

The InvestAssure Health policy is quite expensive because of its innovative features.

“Why choose between Health and Wealth when you can have the best of both?" A hoarding that many of us may have seen recently. The product is Tata AIG Life InvestAssure Health, an insurance policy that is supposed to provide for both your health and add to wealth.

So what is this product all about? InvestAssure Health is a unit-linked health insurance plan with a term of 10-40 years. This product can be purchased from the age of 18 years till age 55, with a maximum maturity age of 65 years.

The features:

 

 

Health Benefit: A lump sum benefit of Rs 500-Rs 3,000 (in multiple of Rs 500) will be paid for each day's stay in a hospital with a cap of 120 days in a year. There are lifetime limits, in terms of daily hospital benefit (DHB) and ICU benefit of 730 and 90 days, respectively. 
 

Surgical Benefit (SB): The plan pays for more than 900 surgeries. The surgical benefit, however, is restricted to 20 times the daily hospital benefit. This means that a maximum of Rs 3,000 x 20 can only be offered as surgical benefit. This again depends on the type and severity of the surgery. 
 

Family Coverage: There is an option to add your spouse and two children in the hospital cover. DHB for spouse and child will be 100 per cent and 50 per cent of basic cover respectively. 
 

Maturity Benefit: On survival, you will receive the fund value at that point of time plus maturity bonuses. If regular premiums of more than 10 years have been paid, there will be a maturity bonus of 2-4 per cent of regular premium fund value at maturity. 
 

There is a choice of six investment options. Based on your risk profile, you have the choice of going in for 100 per cent debt or equity options or a combination of both. The premium that you pay is invested net of allocation charges. 
 

Settlement Option: On maturity, you have the option of receiving the maturity amount either as a lump sum or in instalments over a period of five years. The value of such periodical payments will depend on the performance of funds selected. 
 

There is a choice of riders, right from critical illness to a term rider.

As far as costs go, this policy charges 14-19 per cent a year as Premium Allocation Charges for premiums under Rs 10 lakh in the first two years. This amount falls to 9 per cent for premiums between Rs 10 lakh and Rs 99.99 lakh and 1.5 per cent for over Rs 1 crore.

That means the PAC on Rs 9 lakh premium will be Rs 1.35 lakh in the first two years. It will fall to 3 per cent from the third to fifth years. There will be no charge from year six onwards. Also, there will be an additional 1.5 per cent on top-up premiums. Besides PAC, there are morbidity charges (for the health cover and hospitalisation benefits), fund management charge, surrender charges, service tax and others.

Also, the benefits for pre-existing diseases are capped or reduced under this cover. There are other various limits, including ICU benefit in a year is capped at Rs 90,000 only. Similarly, if a policyholder gets confined to ICU, the yearly and lifetime limits on DHB and ICU fall accordingly.

Another interesting point is that the premiums are only guaranteed for three years. After this, they are subject to review depending on the morbidity experience.

Further, there is no death benefit if any member covered passes away.

This is not a cashless policy meaning that you will have to cough up the initial expenses. And most importantly, in case the policy lapses due to non-payment of premium on or before the third year, it is converted into an Investment Only Policy. All the health coverage benefits under the policy are lost.

As is obvious, this policy is quite expensive and cannot be the primary means of cover. If you are looking for daily hospital benefits and surgical benefits, opt for a simple Mediclaim from general insurance companies. Also, review whether the same cover can be had elsewhere by paying a lower premium. You must clearly understand the benefits and shortcomings of every policy before you sign on the dotted line.