Offer standard health policies with maximum sum insured Rs 5 lakh: Irdai

Regulator Irdai on Thursday issued guidelines on standard individual health insurance, asking the general and health insurers to offer product that can take care of basic health needs of customers with maximum sum insured of Rs 5 lakh and a minimum of Rs 1 lakh.

The product will be named as Arogya Sanjeevani Policy, succeeded by the name of the insurance company. No other name is allowed in any of the documents, Insurance Regulatory and Development Authority of India (Irdai) said in its guideline.

"The health insurance market is having a number of individual health insurance products. Each product has unique features and the insuring public may find it a challenge to choose an appropriate product. Therefore,...the Authority has decided to mandate all general and health insures to offer the standard individual health insurance product," the regulator said.

The standard product should have the basic mandatory covers, no add-ons or optional covers are allowed to be offered along with the standard product and the insurer may determine the price keeping in view the covers proposed to be offered subject to complying with Irdai guidelines, it added.

"The standard product shall be offered on indemnity basis only and the policy tenure shall be for a period of one year".

The mandatory covers under the standard health product include hospitalisation expenses, other expenses such as cataract subject to sub-limits, dental treatment and plastic surgery that have been necessitated due to disease or injury, all day care treatments and expenses on road ambulance subject to a maximum of Rs 2,000 per hospitalisation.

It should also include expenses incurred on hospitalisation under AYUSH treatment, pre-hospitalisation expenses incurred for a period of 30 days prior to the date of hospitalisation, post-hospitalisation expenses for a period of 60 days from the date of discharge from hospital.

With respect to cumulative bonus, Irdai said sum insured (excluding the bonus) should be increased by 5 per cent for each claim-free policy year, subject to condition, the policy is renewed without a break subject to maximum of 50 per cent of sum insured.

"No deductibles are permitted in this product. No plan variants are allowed. Standard product shall be offered on family floater basis also and it should not be combined with critical illness covers or benefit based covers," the regulator said.

The product may be distributed across all channels including micro insurance agents, point of sale persons and common public service centers.

Irdai has fixed the minimum entry age as 18 and maximum as 65 years and said the policy is subject to lifelong renewability.

"The standard product shall comply with portability provisions and the premium under this product shall be pan India basis and no geographic location or zone pricing is allowed," it said further.

The standard product may be offered as micro insurance product, subject to sum insured limits and the product can be launched without prior approval from the authority, subject to certain conditions, Irdai said.

It has also directed every general and standalone health insurer, who has been issued a certificate of registration to transact general/health insurance business, to mandatorily offer this product.

General and health insurers should offer this product from April 1, 2020 onwards, the regulator said further.