Life plus health insurance gains traction

CHENNAI: The enhancements in Section 80 D, which deal with tax deductions for premium, coupled with changing lifestyles and demographics have resulted in life insurers strengthening their presence in the health segment.

From providing cancer care covers to mulling covers for pre-diabetic patients and people with special needs, insurers are now tapping a whole new segment. Till now, many life insurers offered critical care asa rider, which hopped on to other plans.

“Globally, life and health have been on one platform and India is moving in that direction. Life insurers like us have plans that take care of long term health needs unlike mediclaim in which covers only hospital reimbursement,” CEO of Edelweiss Tokio Deepak Mittal said.

Edelweiss launched its Criticare + plan early this year and has got 256 customers with Rs 18.4 lakh in premium collections till date. The plan covers 17 critical care illnesses.

“Due to economic and demographic changes in recent years, customer attitudes towards health and are changing. For instance, living with long term impaired health is a reality in many homes. So we need products that compensate for job loss,” Mittal said.

This year’s budget enhanced Section 80 D limits to Rs 30,000 for senior citizens from Rs 20,000 earlier and increased deduction under Section 80 D to 25,000 from Rs 15,000 earlier (for self, spouse or children) has also provided a shot in the arm for life insurers.

“Many people get a life cover for tax benefits but with increased limits under Section 80 D, they now have greater choice in opting for a health cover in a tax efficient manner,” chief actuary of Kotak Mahindra Old Mutual Life Insurance Sunil Sharma said.

HDFC Life just launched a protection plan for cancer clocked Rs 50 crore in premiums from its health policies during last fiscal. “We are looking to double our premium collection from the health segment this fiscal. Policies such as Cancer Care help in greater engagement with life insurance customers as life insurance is long term in nature,” senior EVP-marketing, product, digital and ecommerce of HDFC Life Sanjay Tripathy said.

HDFC is also looking at other innovations in this segment. “We are looking at innovations in cash reimbursements such as a health saving account,” Tripathy said.

But while choosing a health plan by a life insurer vis-a-vis those provided by general insurers or stand along health care companies, it’s important to note that annual premiums in health plans by life insurers are more expensive than others.

‘”It is 30% more expensive in the beginning but unlike general insurance plans, health premiums in the life segment don’t move up drastically once the insured hits a new age bracket,” said a senior official from a life . “While general and stand alone companies are targeting short term plans with yearly renewals, life insurers are targeting long term plans where the term is at least five years,” he added.

Premium collections from by life insurers from health plans and riders currently account for less than 5% of the total. And even in the popular plan category offering by life insurers like critical illness covers and riders, the current annual premium collections stands at around Rs 5 crore.

Investment advisors too put in a word of caution. “By getting into health insurance, many life insurers may actually end up confusing customers more. Especially if it is a me too product,” Karthik Jhaveri, director of Transcend Consulting, a personal finance advisory firm said.

Curated From : Life plus health insurance gains traction

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