NON-LIFE insurers will in the near future develop a standardised mediclaim policy to facilitate portability in health insurance. Besides having uniform coverage, the policy would have standardised benefits for ‘no claim bonus’.
The general insurance council - an industry body representing non-life insurers - will meet to discuss the details, according to two industry officials.
Health insurance portability, as defined by the regulator, aims to facilitate change of insurance provider without the insured losing out in terms of the policy coverage. While policyholders can shift companies even now, the essence of portability is that an insured is able to carry his track record with him.
In other words if a health policy covers pre-existing ailments only after four years and a policyholder decides to shift to another company in the fourth year he will get immediate coverage of pre-existing ailments and will not have to wait another four years.
Another advantage is, if there is a no claim bonus for earlier years it can be carried forward to the new policy. Today some companies have cumulative no claim bonus where the sum insured increased by 5% for every claim free year, while some products do not have any bonus facility.
Portability can be there only when there is a standardised product. This would mean that the product offered by one company has to be identical to the other with service levels being the only differentiator. While companies will have one standard product, they can have other non-portable schemes as well so that product development will continue taking place. However, they will have to define in their sales literature that a particular scheme is not portable.
The bad news for employees is that group mediclaim policies are likely to be a part of the non-portable products. This means that an employee covered under a group health policy will be treated as a new prospect when he goes to buy a policy after retirement. Group policies differ greatly from individual covers. Many group policies are very wide in their coverage as they cover pre-existing ailments.