Review of Public Sector Health InsurancePolicies

- SMITHA HARI

Summary: There are four public sector players in the country with health insurance policies- United India Insurance Co Ltd, National Insurance Co Ltd, New India Assurance CompanyLtd and Oriental Insurance Company Ltd. The greatest benefit of taking a policy with theseplayers is the cost benefit, as you will need to pay lower premium for the same coveragewhen compared to a private sector player. However, there are some drawbacks also, like aco-payment clause in many policies and also limited option of choosing a high cover.

Our earlier analyses on health insurance policies have received positive feedback from ourreaders. We have discussed health policies offered by Nationalized Banks, those offered bytop players in the private sector and policies offered exclusively for senior citizens. Today, welook at health coverage offered by public sector players only.

We have analyzed the Family Medicare Policy from United India Insurance Co Ltd, ParivarMediclaim Policy from National Insurance Co Ltd, Family Floater Mediclaim Policy from NewIndia Assurance Company Ltd and Happy Family Floater Policy from Oriental InsuranceCompany Ltd. Let’s look at some features of these 4 policies.

Coverage: All policies cover the policy holder, spouse and dependent children. However,parents are covered only by New India Assurance and Oriental Insurance policies. Further,parents in laws are also covered by the Oriental Insurance policy.

Entry age and age on renewal: This becomes critical when you consider health cover forold age. National Insurance and Oriental Insurance score poorly on these counts. Thepolicies by United India Insurance and New India Assurance are better, as the maximum ageon renewal is very high, thus making it ideal if you look at the long term.

Sum Assured: This is a weak point in general, for most public sector health policies, withthat offered by National Insurance Company being the poorest at maximum Rs. 5 lakh.Others have the maximum Sum Assured option up to Rs. 10 lakhs. But Oriental Insurancehas come up with a variant which has a maximum sum assured of Rs. 20 lakhs. However,there are some private sector policies which offer up to Rs. 50 lakhs coverage also. Theamount of coverage you need depends on your needs, family size etc. If you feel you need ahigher overall cover, you can also consider splitting across 2 policies or looking at a top upcover option also.

Premium per annum: This is a positive feature for public sector policies, as the premium islower when compared to private policies for the same amount of cover. The amounts arealmost comparable across all the 4 policies analyzed.

Co-payment requirements: This is the amount the policy holder will have to shed from hispocket in case of a claim. It is the highest in the New India Assurance policy, with co-pay

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clause applicable on age as well as location specifications (Refer the table below). The otherplans have co-pay requirement of 10%. The Gold variant of the Happy Family Floater plan ofOriental Insurance does not come with this condition.

Benefits: No claim discount works out to be the best for the Oriental Insurance policy,ranging up to 20%. Further, there is a discount of 5% in TPA services are not opted and 15%on Overseas Medical Policies. There is also a discount if you purchase the policy online.Again, this policy comes with additional covers like daily cash allowance, attendantallowance, personal accident cover and cover of life hardship survival benefit, albeit at acost. Domiciliary hospitalization is also possible. Some other policies have a no-claimdiscount up to 15%, subject to certain conditions. Free health check up benefits is availableunder United India Insurance. The latter also offers discount on family members’ premium. .The National Insurance policy seems to be restrictive in terms of extra benefits offered.Refer the table below for other benefits of the policies.

Claim Settlement Ratio: The higher the claims settled, the better it is for the policy holder.In this respect,all the companies have done pretty well. Most are above 100% indicating thatthey are clearing the backlog of claims. The ratios for all of them have improved over the lastfew years.

Other features: Pre and post hospitalization time period is 30 days and 60 days respectivelyfor all policies, except the National Insurance policy, where it is 15 days and 30 daysrespectively. This is again restrictive. Pre-existing diseases are covered only after 4 years ofthe policy for all the policies analyzed. The exclusions are also pretty standard across all thepolicies.

Which policy should be chosen?

Each policy has both benefits and drawbacks and you should choose based on your uniquerequirements. The policy by United India Insurance comes with high age and sum assuredoptions. However, there are not many extra benefits available in this policy and claimsettlement ratio is also low. The policy by New India Assurance can be considered for highsettlement ratios and also high renewal age. But again, you should consider the co-payclause and entry load for higher age brackets. The Oriental Insurance policy can also beconsidered for high settlement ratios and the gold and diamond plan variants comes withhigher sum assured option and more benefits. But this may not be suitable for higher agebrackets as the maximum age for entry is comparatively lesser. You can avoid the policy byNational Insurance Company although the premium is comparable, if you wish to take ahigher sum assured or are in the higher age bracket. There is also a restriction on totalexpenses payable for one illness.

As mentioned earlier, your specific needs determine the choice of the policy. Go by thebenefits you can get, as the premium charged is almost comparable across all the fourpolicies.

A detailed comparison is available below. If you prefer to download the excel file, please clickhere. For more details, refer to individual company’s prospectus. Kindly note that this

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analysis covers major offerings from the insurers only & this is not an all-productcomprehensive comparison. The analysis is valid on the date being published.

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Insurer United India Insurance Co Ltd

National Insurance Co Ltd

New India Assurance Company Ltd.

Oriental Insurance Company Ltd

Name of Policy Family Medicare Parivar Mediclaim Policy

Mediclaim 2012 Policy

Happy Family Floater - Silver and Gold Variants

Coverage Self, Spouse, Children

Self, Spouse, 2 Children under a single cover

Self, Spouse, Children and Parents

Self, Spouse, Children, Parents and Parents in laws.

Maximum entry age

80 years 60 years 65 years 55 years

Maximum age on renewal

80 years 65 years No maximum age for renewal

65 years

Minimum Sum Assured

Rs. 1 lakh Rs. 2 lakhs Rs. 1 lakh Silver: Rs. 1 lakhGold: Rs. 6 lakhs

Maximum Sum Assured

Rs. 10 lakhs Rs. 5 lakhs Rs. 8 lakhs (Rs. 3 lakhs for those aged over 55 at time of entry)

Silver: Rs. 5 lakhGold: Rs. 10 lakhs

Premium per annum(for a sum insured of Rs. 3 lakhs for a 35 year old)

Rs. 5998 for 4 members (Single cover for entire family)

Rs. 5683 for 4 members (Single cover for entire family) + Service taxRs. 7469 for 3 member family – 5 lakhs policy sum – got from -http://www.policydunia.com/national-insurance-parivar-mediclaim-policy/

Rs. 4831 for self (including service tax)

8967 – for 5lakhs, silver plan, policyholder, wife and one child18295 – gold plan, 10 lakhs

Silver Plan: Rs. 3,480 for primary member + Rs. 700 for each family member (age group 21-35 years)+ Rs. 630 for each family member (age group less 3months - 20 years)

Pre-hospitalization time period

30 days 15 days 30 days NA

Post-hospitalization time period

60 days 30 days 60 days NA

Pre-existing diseases coverage

After 48 months of policy commencement date

After 4 continuous claim free renewals

After 48 months of policy commencement date

After 4 consecutive renewals

Co-Pay requirements

10% deductible for persons above 60 years

NA 20% if the treatment is taken in a zone which is higher than zone for which premium is paid; 20% for persons above 55

Silver: 10%Gold: Nil

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