State-owned insurance companies propose to extend Mediclaim coverage to include pre-existing illnesses.
This means those suffering from diseases when buying the policy will get coverage for the treatment of these diseases under the new cover. At the same time, the overall sum assured, currently capped at Rs 500,000, will be raised.
National Insurance Company chairman and managing director H S Wadhwa told Business Standard: "We plan to waive the clause that excludes coverage of pre-existing diseases. At the same time, we intend to enhance the cover to more than Rs 5 lakh."
Some private insurance companies already offer coverage of pre-existing illnesses at a higher premium or after a couple of years. Royal Sundaram allows for pre-existing illnesses after five "no-claim" years.
There was a lot of scope for the new product that offered cover on pre-existing diseases, Wadhwa said, adding, "We receive maximum complaints relating to pre-existing illnesses when settling claims."
Many policyholders fail to inform insurance companies of existing illnesses. Thus when claims are submitted, a lot of discrepancies occur. This partly explains why reimbursements are far less than the amount of claims received.
Essentially, under the present cover, if the policyholder suffers from an ailment when he takes the policy, its treatment will not be covered at the time of claim settlement.
The proposed product -- which is yet on the drawing boards -- however, will not immediately be sold to the masses. Rather, the idea is to market the new product offering to corporate entities to ensure volumes.
"The idea is to ensure its viability, which is only possible if we garner large volumes," Wadhwa pointed out.
Since the opening up of the insurance industry to private companies, state-owned insurance companies have been looking at new offerings to combat the competition.
They started last year with a cashless hospitalisation service and now hope to enhance the cover to include pre-existing diseases.
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