New India Assurance, the country's largest general insurance company, has introduced differential pricing and tougher conditions in mediclaim policies from August 16 to check losses in health portfolio.
Based on the region-wise claim experience, the company has divided the country into three zones with varying premium rates and claim amounts with effect from August 16.
If one pays premium in Zone III but is hospitalised in Zone I, one has to bear 20 per cent of the claim amount, or in other words only 80 per cent of the claim will be paid. Mumbai comes under zone I, Delhi and Bangalore fall under zone II and the rest of India falls under zone III.
Since there have been many claims for the age group 3 months to 5 years, a new category has been created for this age band and for a sum assured of Rs 300,000, the premium is Rs 3,615 for Zone III, Rs 3,705 for Zone II and Rs 3,800 for Zone I.
Compare this with rates for the age group 6 years to 35, where the rate is lower for the same sum assured - Rs 3,445 for Zone III, Rs 3,530 for Zone II and Rs 3,620 for Zone I.
Similarly, persons, aged above 45 buying a policy for the first time, will now have to undergo a prescribed medical test at own cost, no enhancement in sum insured will be allowed to persons above 60 years, cumulative bonus has been revised with a maximum limit of 30 per cent instead of 50 per cent and the entire cumulative bonus will be withdrawn at time of renewal if there is any claim.
Other main clauses that a policy holders need to read carefully are:
- Persons suffering from incurable diseases needing recurring treatment, such as renal failure, cancer, parkinson's disease and diabetes mellitus shall not be eligible for Mediclaim Policy.
- In case of adverse claims experience, premium can be loaded up to 200 per cent of basic premium
- Domiciliary expenses deleted altogether
- Compulsory coverage for pre-existing condition and existing conditions of diabetes and hypertension have to be covered compulsorily by payment of additional premium at rate of 20 per cent of basic premium per each pre-existing condition
- Introduction of sub limits on room, boarding and nursing, ambulance and ICU expenses
- On group policies maternity loading is 20 per cent compared to 10 per cent earlier on basic premium
Family Floater Policy (instead of individual mediclaim) is available to cover self, spouse and 2 children (no parents or siblings).
There is a small dole out from the company to those who are members of a health club or gymnasium. It gives a discount of 2.5 per cent on premium to such clients.
"The intention by insurers may be good as they are trying to keep rates low without compromising on claim ratios but it will take time for individuals to understand what they are buying and what claim they will get. We expect a proliferation of products, each with its own set of features in the coming year," said Pavanjit Singh Dhingra, Vice President, Prudent Insurance Brokers New India has a market share of 24 per cent in the Rs 3,200 crore (Rs 32 billion) health insurance business in India.
Claim ratio in respect of mediclaim policies has increased from 102 per cent in 2004-05 to 128 per cent in 2005-06 for New India.
