Antony Jacob,Chief Executive Officer,Apollo Munich Health Insurance
The health insurance market in India has been growing at around 20% per annum and has the potential to grow significantly over the next few years.
The health insurance market in India has been growing at around 20% per annum and has the potential to grow significantly over the next few years. However, challenges remain, says Antony Jacob, Chief Executive Officer, Apollo Munich Health Insurance, in an exclusive interview with Sanjeev Sinha. Excerpts from the interview:
Healthcare costs have witnessed a phenomenal rise in recent times. Still, health insurance remains a neglected area in India and a large number of people prefer to stay without any health cover. What are the reasons? Do you think the scenario will change in the near future?
Industry statistics reveal that the health insurance market in India has been growing at around 20% per annum and has the potential to grow significantly over the next few years. In the last decade, the level of awareness and the need for health insurance among people have increased greatly in the metros. However, non-metros and smaller towns are still new to the idea of buying health insurance. A major hindrance to penetration has been lack of awareness beyond the metro cities.
In order to encourage more people to purchase health insurance, it must be marketed as a financial planning tool that helps mitigate rising healthcare costs and also aids in keeping self and loved ones healthy for the future. The government has already taken several positive steps for raising awareness of the health insurance segment by increasing the tax deduction limit for premiums, focusing on healthcare facilities for all and raising FDI in insurance to aid faster growth of the industry through larger investments.
Another challenge is the limitation imposed by having to use insurance agents and brokers to reach all segments of population across the country. The opening up of the bancassurance channel for health insurance distribution has brought in a new growth impetus for the sector. Factors like deeper penetration of banks and trust of banks' customers are helping the health insurance sector to enhance its reach in a cost-effective manner. To boost health insurance penetration, the industry needs more such innovative distribution models.
How much health cover one should have in normal circumstances?
A person should assess his requirements before choosing the level of health cover for himself and his family. In normal circumstances, the sum insured level should be determined by the city where one resides, the number of family members and the age bracket one falls in. For instance, a person in the young-to-middle age group should have a cover of at least Rs 3-5 lakh and in case of a married individual it would be wise to choose a family floater plan of Rs 5-7.5 lakh sum insured. Policies offering a 100% no claim bonus can prove to be beneficial in the long run.
Apart from the premium of a policy, what other things should one keep in mind while opting for a health cover?
Whilst choosing a health insurance policy, a person must consider the following points to ensure he purchases the most suitable one:
Know your health status: A person's current health status should be the starting point for choosing a health insurance policy. A comprehensive health check-up will ensure transparency with the insurer and also enable a person to determine the benefits and features he/she would need in a health insurance policy.
Compare the benefits: While comparing policies, policy premium should not be a factor of comparison. It is important to consider the extent of coverage provided by each. One must evaluate if there are any restrictive clauses present in the policies in relation to sub-limits or co-pays and any restrictions on room type that can be accessed. Policies that provide basic features such as lifelong renewal, cashless transactions, no sub-limits, large network of healthcare providers and no claims loading should be preferred.
Read and understand the policy wordings: Before buying the insurance policy, one should read the policy wordings and documents carefully. Once an informed decision has been taken and coverage documents have been obtained from an insurer, the policy schedule and policy wordings should be thoroughly read to understand the claim process, documentation requirements, payment options, special conditions, coverage and exclusions.
Fill up the proposal form yourself: One should always fill up one's own proposal form and not depend on agents or any third party. The information shared in the form should be correct and authentic. Do not hide any information or overwrite on the proposal form, as inadequate information or not mentioning existing medical conditions in the proposal could lead to issues of delayed or non-payment of claims during times of need.
What mistakes should one avoid at the time of porting?
Although porting could be an ideal choice for those looking for a superior level of service and benefits, there are many factors that must be considered before the decision to port is taken. To avoid any lapse in coverage, consumers wanting to port should request the insurance company of their choice at least 45 days prior to the renewal date in order to take an informed decision and hedge the risk of a break in coverage at any point in time.
In addition to this, customers should keep in mind that every policy is different and each insurance company is governed by its own underwriting principles. Hence, customers should choose the one they deem fit. It is important for the customer to completely understand the benefits offered under their existing policy and compare them with those of the plan that they wish to port to. One should note that any proposal for porting will be treated as a new proposal for the company and has to be validated as per the underwriting guidelines of the company.
These days some insurance companies are coming out with single-disease covers, like cancer cover and dengue cover. Are such covers required or one should go for a policy that covers a wide range of diseases?
Our diverse nation has various segments of population with different needs that cannot be met by a single solution, as one product no more fits all. Single-disease covers offer comprehensive coverage for that particular disease and serve as an add-on cover to regular health insurance policies. As customers seek specialized products, I foresee a trend of specialized products in health insurance continuing for a long time to come. However, a basic health insurance product will always serve as a base to these special benefit plans.
Do you think the new IRDA norms have made health insurance a better product now and will also give a boost to the sector?
IRDA has taken some path-breaking steps in the last few years like health insurance portability, lifelong renewal, standardization etc. These guidelines have surely helped reduce the ambiguity and concerns people have while buying a health insurance policy. We believe the importance that the insurance regulatory body IRDA has given to the health insurance segment will continue to provide the impetus this segment needs to grow multifold.
What are your growth plans? Does Apollo Munich also plan to launch any new product in the future?
We aim to consolidate our growth by growing our retail customer base. We also aim to expand our footprint across the country through our bancassurance tie-ups with Citibank India, Canara Bank and Indian Overseas Bank. In terms of products, we have recently launched Dengue Care, the country's first exclusive over-the-counter health insurance policy to cover dengue-related expenses. It is in our DNA to innovate and create uncomplicated products. Therefore, we will continue to develop products that are truly instrumental in fulfilling the needs of the consumer.