Stick to group or bundled maternity covers

Comprehensive covers, which Irda wants insurers to introduce, could be more restrictive and costly

For a long time, there have been complaints that the insurance industry does not offer any good maternity products. The Insurance Regulatory and Development Authority (Irda) seems to have taken notice of this and asked insurers to introduce comprehensive products. The bad news: Experts and insurers feel these would be more restrictive and costly.

At present, there are no stand-alone policies. Players bundle maternity cover with individual policies. Else, there are group policies. Experts say the introduction of stand-alone covers may not help.

"Coverage under stand-alone policy may be linked to the sum insured, that is, the policy could offer maternity benefit from 10 to 25 per cent of the sum insured," says Divya Gandhi, head-general insurance at Emkay Global Financial Services. "As pregnancy is not an unpredictable, the premium will be higher when offered under individual policy."

Another concern is late pregnancies may be kept out of the ambit or covered for a very small amount (not more than five-eight per cent), with the average maternity age on the rise. If there are complications, specially due to late maternity, there will be no cover.

At present, Max Bupa does not cover hospitalisation where late-pregnancy related complications lead to a patient delivering. Insurers can deny benefits in situations such as stress due to excessive vomiting in the first trimester (likely in late pregnancy), pregnancy-induced hypertension or those with hypertension or diabetes.

Max Bupa's Rs 10-lakh Heartbeat Gold Policy covers maternity for Rs 50,000. The premium is Rs 19,042. A Star Health stand-alone policy would cost Rs 19,335 for Rs 5 lakh.

Insurers look at maternity cover as high-risk because it has been seen that policyholders buy a cover, claim for two deliveries (despite high premiums) and port out to a health cover not covering maternity for a very low cost. Hence, many are not convinced if a stand-alone product will be viable. To be viable, any product requires a homogeneous mix of policyholders who claim and those who don't. Maternity benefits are taken only for claim and there is no need to continue.

Waiting periods could also be higher to avoid claims. At present, the lowest waiting period is two years (Max Bupa) and the highest six (Apollo Munich)

However, Gandhi feels the stand-alone cover may be helpful to those who work for smaller companies and do have a group health cover. At the same time, she feels group cover also may not always be sufficient as mostly the sum assured varies in line with the designation of a policyholder and not all companies allow claims equal to the sum assured.

Health insurance expert Mahavir Chopra feels getting maternity covered under group policy has an edge over a stand-alone one. Some companies could charge you for covering maternity, specially if the claim amount is high, because group policies see most claims, either for maternity or for the elderly.