Last year, when Vinod Bajaj, 62, approached a public sector insurance company to buy a health insurance, he was turned down as he was diabetic for 19 years.
In fact, a divisional officer berated him for even wanting to buy a policy that would not cover any claim related to his heart, kidney and central nervous system. "Do you want to pay a high premium to be treated for just malaria?" asked the officer.
Just a year later, the Supreme Court's ruling in an insurance case last month came as a respite for millions like Bajaj. The court ruled that public sector undertakings cannot deny mediclaim for pre-existing diseases.
"The ruling has come as a boon for diabetic and hypertensive patients as PSUs have started covering diabetes and hypertension, though at a higher premium of between 10 and 30 per cent," said Amaresh Kumar, an insurance broker.
For instance, if a person suffering from diabetes buys a policy worth Rs 500,000 from Oriental Insurance at the age of 55, he will need to pay Rs 12,732. But PSUs do not cover any claims arising due to diabetes in the first two years of the policy.
In the third year, they share 50 per cent of the medical expenses. Only on the completion of the fourth year, they cover diabetes and hypertension completely. The policy can be bought till the age of 59 years.
As far as the private sector players go, Bajaj Allianz has a policy for person with pre-existing disease called Silver Health for the age group between 46 and 70 years. This policy can be renewed up to 75 years. A policy of Rs 500,000 for a 55-year old, with diabetes costs Rs 14,781. The company charges an additional load if the doctor's report is not favourable.
Other private sector companies also provide regular health insurance, but on a case-to-case basis. For instance, if the person having diabetes is diagnosed with high cardiac risk, any heart related problems will be excluded from the cover. And for most companies, this exclusions would continue for the the entire term of the policy. Only few insurers, such as Star Health and Bajaj Allianz cover the exclusion after 5 years and one year respectively under special policies.
Of course, in recent years, specialised products have been introduced. For instance, ICICI Prudential's has three critical illness policies for diabetes patients.
These products are meant for type II diabetes. The company insures patients for eight types of complications that can arise due to the chronic disease including stroke, cardiac and kidney failure. This product can be renewed only for five years and they pay a lump-sum amount on detection of stated complication due to diabetes.
These policies are for a 5 year term and one can buy it up to the age of 60. In case there is a cardiac problem during the tenure of the insurance, ICICI Prudential will pay the entire sum assured. This is because critical illness policies are not based on compensation like in case of Mediclaim where the non-life insurance companies will only reimburse the expenditure incurred.
Critical illness policies of life insurance companies can only pay the entire sum assured when the disease is detected. This is an additional benefit because any person suffering from such ailments can claim the Mediclaim as well as get the sum assured from the critical illness policy.
There are additional advantages of such policies. "Along with insurance, these products can also used for disease management. The insured person needs to go for a regular check-up every four months. We review the progress of his condition. If diabetes is under control, we give a discount or else charge more if condition worsens," says Dhiren Salian, assistant vice president, ICICI Prudential.These discounts can vary from a maximum 15 per cent to 35 per cent depending on the sum assured.
Star Health also offers specialised diabetes cover. In this product, the company pays for the medical expenses incurred rather than giving a lump sum amount. Also, the product covers only three conditions that can arise due to diabetes including foot ulcer and gangrene, kidney related problems and eye-related complications.
Among all the products available for various types of diabetes, insurance experts suggest that if the patient is not suffering from severe diabetes condition (type II), he should purchase a policy from a public sector insurance company as settling claim with them is easier and convenient.
