New Delhi: Life insurance companies may soon be allowed to sell mediclaim. Insurance regulator IRDA has constituted a committee that will study the difference between selling indemnity based health insurance policies of these companies.
Currently, IRDA (Health Insurance) Regulations 2016 allow life insurance companies to sell only defined benefit based health insurance products.
Indemnity based health plan is basically an insurance policy in which the insured person is paid the actual expenses incurred at the time of hospitalization.
It is subject to the total sum insured under the policy. This means that the money spent at the time of treatment in the hospital is paid by the policy. There is a limit of even insured for this. A health insurance policy with indemnity can be a regular individual health insurance policy or a family floater policy.
It is important to understand this difference. Usually, when you choose a cashless hospitalization policy, you have to pay a fixed amount to the hospital. This is called a deductible amount. The rest is paid by the insurance company. However, if you do not choose a cashless hospitalization policy, you have to show medical reports, payment of bills and other necessary documents. Based on these, the insurance company reimburses the expenses.
IRDA issued a release on 25 February 2020. Accordingly, the ‘Insurance Law (Amendment) Act 2015 sees health insurance as a separate category of business. Historically, health insurance is seen as an important component of health care.
Health insurance growth (CSGR) has been 20% in the last 10 years. IRDA (Health Insurance) Regulations 2016 allow life insurance companies to offer only benefit-based health insurance products. These companies request that they be given approval to introduce indemnity products as well.
