Combo of Life and Health Insurance Product to Get Traction

Sky rocketing health care expenses and the recent change in Section 80 D of Income Tax Act, that increases tax deduction limit on health insurance premium, are giving a boost to the segment with life insurance companies foray health insurance segment.

Tapping the huge uninsured market, life insurance companies in India, considering a product that would provide pure protection with health insurance cover. Unlike India, life insurance and health insurance products are being provided by life insurers. Now, India is on their way offering product which would cater policyholders the life insurance need and health insurance as well.

Early this year, private player Edelweiss Tokio Life Insurance launched its product Criticare + that has garnered a great response, and has collected about Rs. 19 lac premium till date. It covers 17 critical care illnesses.

In recent years, with growth of economy and several changes such as life style and demographic, people’s attitudes towards health insurance including others, are changing rapidly. These changes have provided a shot in the arm for life insurance companies.

The union government in its annual budget for 2015-16 has increased tax deduction limit to Rs. 25,000 from earlier Rs. 15,000 (for self, spouse or children), and Rs. 30,000 for senior citizen from earlier limit of Rs. 20,000.

In the initial years of health insurance policy from a life insurance company will be costlier than that offered by a general insurer or a standalone health insurer.

As per industry experts, in the beginning years, health insurance policy taken from a life insurance company is about 30 per cent expensive than the policy offered by general or standalone health insurance company. But the best part of this product is that the premium does not go up drastically once the policyholder jumps the new age bracket. Unlike standalone health insurance or general insurance companies that target a short term plan, life insurance companies are targeting longer term plan where the minimum policy term would be at least five years.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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