Stay fit and pay less for health insurance
With medical expenses increasing by the day, it’s important to be conscious about preventive healthcare, which includes keeping oneself fit.
IRDAI's has directed insurance companies to create health-linked premium policy for policyholders.
Recognizing the need of the hour, the Insurance Regulatory and Development Authority of India has also sought to promote preventive healthcare, through its latest draft guidelines on wellness and preventive benefits.
The biggest takeaway from these guidelines is the fact that insurers can now offer a discount on premiums or give a better sum insured, if one keeps fit .
IRDAI (Insurance Regulatory and Development Authority of India) has directed insurance companies to introduce health-linked premium policy so that those who have a better health condition to be rewarded. The step will help insurance companies as well as they will be charging more from those policyholders whose health is not good.
Thus one’s health status will have a role in deciding the premium of the health policy. This step will make people aware of staying fit to save money through lower health insurance premiums. The insurance companies have developed app-based technology that can calculate one's health on the basis of health points. If one has a better score then he/she pays less as every score will be linked to the insurance premium.
With this move of IRDAI, health insurance will no longer be perceived just as a measure to secure oneself against unforeseen illnesses; rather it will become a part of one’s daily health needs.
How you will benefit
Insurance Development Regulatory Authority of India (IRDAI) recently has given approval to 19 innovative health insurance products under sandbox that will cater to specific needs of customers. The prominent ones include friend assurance, wearable health devices, short-
term health insurance, need-based health insurance, payment over reward points, app-based healthcare and more.
Friend assurance
With most people increasingly being conscious about fitness, they often join a marathon, cycling or trekking groups or fitness centres. From an insurer's point of view, they will surely have better health profile than an average customer. Secondly, because these groups often meet and take interest in each other's fitness journey, they work in cohesion. Keeping these special interest groups in mind, three insurers – Max Bupa Health Insurance, Religare Health Insurance and Kotak Mahindra Health Insurance - have received IRDAI's approval to launch Friend Assurance product wherein a group of friends or family may buy policies together for combined benefits.
Earlier IRDA had placed restriction on this concept, that a group cannot be formed just for purpose of buying insurance or availing discounts. The concern was that there should be a commonality in nature of members of group (a homogeneous group). This new product aims to get people to lead a healthier lifestyle, besides initiating social interaction among the members and keep them motivated to stay healthy.
Features of this policy are:
- Friend Assurance policy offers features similar to retail products, where the group that does not make any claim will get a 15% premium cash back at the end of year.
- The individual premium in the group is lower compared to what a traditional policy will offer as the insurance company will be able to offer them better rate because all will come together.
- There will also be wellness-linked incentives.
- Some 10-15 per cent premium will be returned back at the end of the year if no claims are received from any person.
Wearables
Star Health, Max Bupa, and Kotak Mahindra General Insurance are the selected companies in the wearable tech category. While most insurers already offer footstep-based discounts via their apps, these companies have got approvals for specific wearable devices. With this, measurement will be more accurate too.
OPD expenses
As per Study two-third of total healthcare spend in India is on OPD. Religare Health has structured the product called OPD and Wellness with Integrated Flexible Rewards program where they have integrated OPD and wellness so that they can play a proactive role in managing customers' OPD spends, and at the same time reward them for displaying good behaviour. Customers should be given points based on their activity level and healthy behaviour which can be redeemed in their network of clinics.
Need-based health profile
This product is more of a pricing tool to fix premium on an individual basis. Currently the premium on policies is charged based on age and in some cases Geographies . Based on data available on underwriting and claims side, Max Bupa has devised a dynamic pricing model where every individual will be offered different pricing.
Persons of the same age will not have to pay same premium. They will be asked a set of questions on their health, family history and lifestyle etc.
App-monitored health programs
- Disease Management Program
ICICI Lombard General Insurance has the app-based features to take care of Diabetes and Cholesterol - App-monitored Diabetes Mellitus Wellness Program and Dyslipidaemia Management Program.
A customer who opts for these programs will be offered a disease management application along with a nutritionist counselling for diet. The program allows tech-based mobile application and monitoring services to bring out the best of an insured individual. A customer who exhibits good behaviour by following a diet and a fitness regime will be rewarded by wellness points and this entire process will be monitored through the mobile application.
Wellness perks
- Irdai has proposed certain ways through which insurers can offer wellness perks to policyholders. A few perks are as mentioned :
- Based on the disclosed fitness and wellness criteria, insurers can offer redeemable vouchers for the purchase of protein supplements and other consumable health supplements.
- Policyholders may also get redeemable vouchers for memberships in yoga centres, gymnasiums and for participating in other fitness activities.
- The earlier discounts (through vouchers) on OPD consultations and treatments, pharmaceuticals and health check-ups done by network hospitals would also continue.
- Of all the benefits proposed, what stands out is the discounts on premiums and an increase in sum insured at the time of renewal, depending on how well one has followed the wellness regime.
- IRDAI has allowed insurers to stretch the benefits by covering non-payable items of cost of treatment.
- For all policies, whether the accrued benefits can be carried forward or not at the time of renewal will have to be specified clearly in the policy document stating the period of validity of the benefits.
- Benefits accrued cannot be linked to any dynamic factor and will have to be declared upfront at the commencement of the policy.
- At least once every year, insurers shall notify the benefits accrued to the policyholder.
Debalina Roy Chowdhury
Dilzer Consultants