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New life, health insurance products launched. Find out if they work for you

Some life and health insurers have rolled out ‘innovative’ products in recent months. These latest offerings are in response to Irdai tweaking norms. Find out how they rate on the utility scale. Should you be ready to pay more for new features?

, ET Bureau|
Updated: Dec 16, 2019, 12.17 PM IST
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Now, coverage of newer procedures is being promoted as a novel feature.
The insurance sector witnessed the launch of three products across the life and health space, all promising ‘innovative’ features. Aegon Life Insurance revamped its flagship term plan—iTerm—to offer a monthly income option to the life assured after the age of 60. ICICI Prudential Life has launched Precious Life, a pure risk term policy that extends cover to those with ‘adverse’ medical history who were denied cover earlier. Max Bupa has rolled out Health Premia, a product that conforms to the new Irdai norms on standardisation of health insurance exclusions, besides offering a host of newer features.

ICICI Pru Life’s Precious Life
This pure protection term insurance policy covers those suffering from diabetes, high blood pressure, cholesterol, obesity or even those who have recovered from cancer or any other surgeries. “Such individuals find it difficult to get life cover, leaving their families financially vulnerable. This product has been designed to cater to this need-gap,” says Puneet Nanda, Deputy MD, ICICI Prudential Life. At present, there is no blanket denial of life coverage for those with lifestyle conditions like diabetes or hypertension. “For example, if a diabetic’s HbA1C score is above normal, there could be a premium loading of 150-200%, depending on the insurer,” explains Akshay Vaidya, Head, Term Life Insurance, Policybazaar.com.

However, the insurance seeker has to go through the underwriting process before the company decides whether the policy can be issued or not. “The decision will depend on the severity of the diseases. Since Precious Life is positioned as a product for people with impaired profiles, the chances of rejection could be low,” says Vaidya. On the flipside, however, premiums could be higher. “Besides, they might get missold to people who don’t have dependants,” says Shweta Jain, Founder, Investography. Moreover, more companies could enter the fray in future, potentially reducing premiums. There is no such plan in the market at the moment. “Price discovery for this category is yet to happen. Premiums could come down in future, but purchase of a term cover should never be postponed when you have dependants,” says Vaidya.

Aegon Life’s iTerm
Private life insurer Aegon Life has launched a newer version—seventh avatar so far—of its flagship product iTerm. The quit smoking benefit, where a smoker policyholder is offered non-smoking rates once he kicks the habit, carries high utility value. Similar is the case with options ensuring hike in cover amount at key lifestages or 5% every year.

However, the most-talked about is the dual protect feature. Term insurance policies are meant to protect the dependants’ financial future in the absence of the policyholder. But dual protect option promises survival benefit in the form of regular income for the life assured. “It covers both risks—of dying sooner and living longer. Lot of customers hesitate to buy term plans as they do not get anything in ‘return’. This option addresses that issue,” says Vineet Arora, MD and CEO, Aegon Life Insurance.

Under this option, once the policyholder turns 60, he gets a lump-sum payout (5% of the sum assured), plus 0.1% of the sum assured in monthly instalments till maturity. You can choose to be covered until 80 or 100 years of age. “This is not similar to return of premium term plans or deferred claim payouts offered by other plans. The sum total of the payouts is likely to be higher than the premiums paid during the term,” says Vaidya. Return of premium plans simply return the premiums you have paid through the tenure. The flipside? Significantly higher premiums (see table).

Be ready to pay more for new features
The latest offerings are in response to Irdai tweaking norms.
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Assumptions: For a 35-year-old non-smoker male choosing a sum assured of Rs 1 crore with coverage till the age of 80.

Max Bupa’s Health Premia
Standalone health insurer Max Bupa’s new product Health Premia will cover treatment using newer procedures like cyber knife and robotic surgery. It is among the first to offer this cover after Irdai’s standardisation of exclusion norms. In addition, it has travel insurance built into it. “Policyholders will not have to buy travel policies separately when they travel abroad. It covers treatment abroad for specified illnesses even if it is a planned one, not only during emergencies,” says Ashish Mehtrotra, MD and CEO, Max Bupa.

In regular travel policies, pre-existing diseases are typically not covered. “In this case, even preexisting diseases will be covered after the waiting period. It will work well for someone who is a frequent traveller,” he adds. Maternity benefits, too, are offered worldwide. The product offers a sum assured of up to Rs 3 crore. However, the product is a premium variant and premiums are 4-5% higher across age-groups, when compared to Max Bupa’s regular products. Frequent travellers could find utility value in this product.

Now, coverage of newer procedures is being promoted as a novel feature. However, going forward all new products and the ones renewed after 1 October 2020 will have to mandatorily do so to comply with Irdai norms.

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