Quick approval, grace period: Medical insurance process eased amid Covid-19

Use instalments to increase cover; benefit from quick approvals.

The COVID-19 pandemic has brought home the significance of health and life insurance like nothing else earlier. Even those who were blasé about these covers in the past are now looking to buy a new policy or want to enhance the sum insured on their existing ones. Meanwhile, the Insurance Regulatory and Development Authority of India (IRDAI) has been issuing a slew of guidelines to health/general and life insurance companies aimed at easing matters for customers.

MEDICAL INSURANCE:

Pay health insurance premiums in instalments: Through a circular dated April 20, 2020, the regulator has permitted companies offering health insurance to allow customers to pay their premiums in instalments. With many customers expected to face financial hardships amid the lockdown, this step will ease customers’ burden. “It is an attempt to provide an affordable option to customers, and encourage more people to buy health insurance," says Prasun Sikdar, managing director and chief executive officer (CEO), ManipalCigna Health Insurance.

Some insurers will charge the same premium under all options. “The premium amount will remain the same irrespective of the mode of payment," says S. Prakash, managing director, Star Health and Allied Insurance. Brokers, however, inform that some companies may charge you an extra amount if you go for any option other than annual.

The burden of paying the premium does get eased in a frequent-payment option. “In some COVID-19 cases, treatment costs have gone as high as Rs 14-15 lakh due to accompanying complications. If the sum insured on your family floater is not adequate, use the monthly payment option to enhance your cover,” suggests Amit Chhabra, business head, health insurance, Policybazaar.com.

Yet to receive proposal from LIC for IPO, says Irdai Chairman S C Khuntia

Khuntia also asked insurance companies to "weed out" loss-making products and concentrate only on the better paying ones.

Insurance watchdog Irdai is yet to get any proposal from life insurance behemoth LIC on an initial public offering but feels a listing is better from a governance perspective, chairman S C Khuntia said on Tuesday.

He also said that there is nothing for the life insurance industry to worry for the time being with regard to government's move on certain income tax exemptions as the alternative to invest still exists.

Khuntia also asked insurance companies to "weed out" loss-making products and concentrate only on the better paying ones.

On the IPO of Life Insurance Corporation of India announced in the budget, he said,"LIC proposal has not yet come".

"Any company which goes public there will be better corporategovernance and better disclosure, he told reporters on the sidelines of an event of actuaries here.

On being asked if LIC's business will need any restructuring before IPO, Khuntia said that work on the same is being carried out by the government.

He said it is a good idea for every insurance company to list and the Insurance Regulation and Development Authority of India (Irdai) will nudge entities to go for the same.

It is, however, not making it mandatory to list because smaller companies are yet to achieve the scale for going public, Khuntia said, adding that ideally a company should achieve sufficient scale to list within ten years of its existence.

He said the practice of annual product review needs to be carried out in full seriousness by the players and pitched for a weeding out of the loss making ones.

"I would like to encourage companies to weed out products which are not selling and simply adding to the number, then they will be able to manage those products well," he said, adding that the plea was made at a meeting with chief executives recently.