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ICICI Pru MediAssure - Does it measure up?

ICICI Pru MediAssurey is a good policy, but expensive. The price is likely to be revised once all non life companies react to the IRDA circular, which is when we can expect ICICI Pru Life to revise its price as well.

Harsh Roongta

24 Jun 2009

The general insurance companies (National, New India, Oriental and United insurance among the PSUs and ICICI Lombard, Bajaj Allainz General insurance, Reliance General insurance, Tata AIG, Star Health, Apollo DKV, etc. among the private sector) have been the only ones offering expense reimbursement polices for hospitalization which are more popularly known as mediclaim policies.


Companies offering health related policies (for some time now) hitherto used to fall in three broad categories:


  1. Daily Hospital Cash allowance essentially an allowance for every day of hospitalization (or recuperation after the hospitalization in some cases). This is basically meant to cover the expenses incidental to hospitalization and not really for actual expenses incurred on hospitalization

  2. Critical Illness Lump sum amounts payable on diagnosis of certain covered diseases/surgeries/treatments. Again all these are payable on happening of the event and not really dependent on what expenses you actually incur on the treatment of the disease.

  3. ULIP linked plans having the above two products bundled with a regular ULIP plan.


The table below summarizes the difference between the health polices offered by the Life Insurance companies so far and the regular mediclaim kind of policies offered by the General Insurance Companies.



Daily Hospitalisation Cash benefit

Critical Illness/ Specific Surgery or treatment

Mediclaim kind of expenses reimbursement Policy

Payable only if Hospitalised

Yes

Not necessary. Even if critical illness is diagnosed the amount is payable. Lump sum payable in some cases for specific kind of surgeries or treatment in a hospital.

Some have small payments payable for treatment at home but otherwise hospitalization is a must.

Place of Hospitalisation

In some cases available for hospitalization outside India also.

Wherever hospitalization is required, some policies do allow treatment/surgeries in foreign countries.

Currently no policies offer this for hospitalization outside India

Whether bills/vouchers for actual expenses required to be given for get claim

No. Only proof of being hospitalized required.

No. Only proof of diagnosis/getting a specific surgery/treatment required.

Proof of expenses incurred is a must.

Main purpose of the risk cover

Meet the expenses incidental to hospitalization such as travel costs, loss of pay, companion's cost, etc.

Lump sum payment to provide a source of income or to meet the expenses incurred on major surgeries

Reimbursement of actual expenses incurred on treatment in a hospital.

Offered by

Both Life and General Insurance companies

Both Life and General Insurance companies

Was so far being offered only by General Insurance companies



Now the Life Insurance companies have also jumped in the fray to offer mediclaim kind of polices with ICICI Prudential Life coming out with its MediAssure and Health Saver Plans. This article will discuss the MediAssure plan that is directly pitted against the mediclaim plans of General Insurance companies.


The salient features of the plan are:


  1. Annual limit available from Rs 2 lacs to Rs. 10 lacs

  2. Both Individual and Family Floater Plans are available

  3. Premiums are comparable to other similar policies. See our comparator of all mediclaim policies on http://www.apnapaisa.com/insurance/health-insurance-india/compare.html


Some of the distinguishing features of the policies are given below:



MediAssure

Other Mediclaim Policies

Policy Term

3 years

Normally 1 year though some 2 year term policies are also available

Renewability

Renewability Guaranteed till the age of 75

This has recently been made compulsory by an IRDA circular though the date up to which renewability is guaranteed will be different for different companies and is likely to be much lower than 75 years.

Nature of renewability

The nature of the policy to be offered at renewal time is not stated and will be the policy in force at that time. In fact they have indicated on their website that they will be coming out with a product that is likely to have a compulsory co-pay feature.

The policy in force at that time

Premium guaranteed

For 1st 3 years

For the term of the policy which is primarily 1 year

Premium payment mode

Monthly payment is also possible

Full payment in advance

Co-pay*

20% co-pay in higher Category hospitals if you choose anything higher than twin sharing a/c room or if you choose to get treatment in a non-network hospital. The co-pay requirement also changes based on which policy type you choose (standard or premium)

Some policies have co-pay requirements

Pre-existing diseases

Are defined as any pre-existing diseases at any time prior to the policy and can be covered after 2 years on continuous coverage. Specific mention of complications arising from diabetes and/or hypertension which if agreed to be covered will be available in the 3rd policy year. Probably coverage would be at additional premium.

Some companies have started defining pre-existing disease as only those that arose or were treated in the 4 years prior to the policy being taken for the first time. Coverage of pre-existing diseases (including complications arising from diabetes/hypertension) varies widely. See our comparator of mediclaim polices for more details.

Medical Tests before acceptance

Not very clear but are likely especially for any adverse medical history

Policies vary from company to company

Some other features

Doctors fees cannot exceed 20% of the total eligible hospitalization expenses

  1. Maximum benefit from ICICI Pru-life for all reimbursement type of policies (currently only this policy and Health Saver) cannot exceed Rs 25,00,000


Some policies have distinctive features


All in all, it is a good product especially its guaranteed renewability feature (though it would have been better if there was an assurance that the same policy -with the same wordings- would be available for renewal even if it is at a higher rate) as well as monthly premium payment option. The guaranteed renewablity feature that was its center point has been upstaged by the recent IRDA circular that makes it mandatory for all general insurance companies to compulsorily renew the policy except in cases of fraud, misrepresentation, etc.


Its biggest drawback is its premium, which is very expensive. As an example for a 30 year old for a Rs. 3 lac cover the annual premium is Rs 8,355 as compared to Rs. 4,918 for the second most expensive policy and Rs. 1,931 for the cheapest one (Off course price is not the only parameter to be used while comparing mediclaim policies since coverages can be very different but this is just to bring out the huge difference in premium). The only thing justifying such a high premium is the guaranteed renewability feature which has been upstaged by the recent IRDA circular making it compulsory for all non life companies to compulsorily offer renewal except in the case of fraud, misrepresentation, etc.


Less significant drawbacks are the co-pay * feature as well as small doubts on the ability of a life insurance company to handle the high claim volumes that are normally experienced in a mediclaim policy.


The co-pay* feature is increasingly being used by the insurance companies to ensure that hospitals do not charge indiscriminately just because the patient has a mediclaim policy. The co-pay ensures that the patient's family also monitors the bill amount to ensure its reasonableness. Co-pay's are controversial in the US market but given the manner in which the Indian health care industry is structured we see no other alternative to keep the claims on such policies at reasonable levels, which ultimately benefits all the consumers by way of lower premiums. The other concern would be the ability of a life insurance company to manage the claim process in a policy where the number of claims is so large (In life insurance policies the number of claims are low). However, ICICI Pru-life would already have some experience in dealing with large number of claims on their hospital cash/critical illness/major surgery/treatment policies and hence should be able to deal with this as well.


All in all though this policy is good it is way too expensive. The price is likely to be revised once all non life companies react to the IRDA circular, which is when we can expect ICICI Pru Life to revise its price as well.



*Co-pay means that the insured person pays a certain portion of the eligible claim amount. So if the co-pay is 20% and the eligible claim amount is Rs. 1, 00,000 the consumer bears Rs. 20,000/- and the Insurance Company reimburses the balance 80%. The purpose of co-pay is to ensure that the insured person also keeps a check on the total expenses to ensure that there are no unnecessary or inflated charges by the hospital just because the patient has mediclaim insurance.





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