Arogya Sanjeevani

Written by Vidya Kumar

January 13, 2020

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Summary: The IRDA has mandated  all health insurance companies to launch a health insurance policy – Arogya Sanjeevani Policy. It will be a basic health insurance plan that offers coverage up to ₹ 5,00,000. People can buy it on a yearly basis and have multiple premium payment options. It covers AYUSH treatments. It does not cover maternity expenses and is not offered to senior citizens.  It is a positive step towards ensuring health security of the people.

There are many decisions to take when you buy an health insurance plan –

  • Which policy to buy?
  • What should be the sum assured amount?
  • What are the riders or add-ons to avail of?
  • How to evaluate terms related to co-payment, deductibles etc.?

Many companies offer different kinds of policies for health insurance. The policies differ based on features and terms and conditions. To simplify matters for the general public, the Insurance Regulatory and Development Authority of India (IRDAI) has announced that a standardized health insurance policy with relevant basic features has to be offered by all health insurers. This standard policy will be called, ‘Arogya Sanjeevani Policy’. Each insurance company will have to launch this product by April 1, 2020 and will have to name it as ‘Arogya Sanjeevani Policy, <<name of insurer>>’. 
The aim of ‘Arogya Sanjeevani’ is to ensure a standard health policy exists across companies to take care of basic health needs of the people. There is one policy common across companies so that people understand it and can port it from one insurer to another easily.

While a standard product will surely simplify health insurance for you, do keep in mind that it has to be evaluated carefully before buying it. It may not be the best product in the market. We give you the features and details of the new standard plan –

  • Provide a minimum sum assured of ₹ 1,00,000 and a maximum of ₹ 5,00,000.
  • It is available for people in the age group – 18-65 years.
  • It can be taken as an individual policy or as a family floater policy.
  • It will be offered for a term of one year with the option for renewal and a grace period of 30 days.
  • Premium payment can be made on a yearly, half-yearly, quarterly or monthly basis
  • It offers cashless insurance.
  • It covers AYUSH (Ayurvedic, Yoga, and Naturopathy, Unani, Siddha, Homeopathy) treatments.
  • There is no claim bonus (NCB). The sum assured will be increased by 5% per year for each claim-free policy year provided it is renewed regularly. The NCB is restricted to 50% of the sum assured amount.
  • It will be portable. 
  • The company will decide the premium amount but pricing based on geography is not allowed. 
  • It covers boarding expenses, dental and plastic surgery due to disease and injury and ICU/ICCU expenses subject to certain conditions.

The policy has certain conditions and exclusions –

  • A co-payment of 5% is applicable irrespective of age and claim conditions. 
  • There is a 1-year waiting period for certain conditions/treatments like benign ENT disorders, tonsillectomy, hysterectomy, tumours, cataract and related ailments, varicose veins, and congenital anomalies, etc.
  • There is a 2- year waiting period for joint replacement, osteoarthritis, and osteoporosis that are age-related
  • Maternity expenses cannot be claimed
  • Cataract expenses are limited to 25% of policy amount or ₹ 40,000 whichever is lower.
  • Evaluation, rest, rehabilitation, change of gender related treatment, cosmetic surgery, treatment for conditions due to participation in adventure sports are not covered.

Our Analysis
A common health policy across companies is a positive step. It makes things simpler as policy terms and wordings will be standardized across all insurers. It is a good basic health insurance policy to have for you and your family. Most of the features and exclusions are as per standard health insurance products. On the other hand, it does not cover senior citizens who require health insurance more than others though life-long renewal is possible. The sum assured amount might not be enough in many cases. Maternity expenses are not covered and there is a waiting period of 30 days after issue of policy to avail of the benefits. We have to see how companies set the premium. It will allow a larger number of people to access health insurance but we will know better when companies roll out their products in April 2020.

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