INDIA: Health Insurance Plans Coming From LIC In December

MUMBAI (The Telegraph, Kolkata), October 23, 2007: The Life Insurance Corporation (LIC) proposes to announce its first health insurance policy in December. The life insurance behemoth has crafted a policy that will provide a medical cover of up to Rs 10 lakh for the entire family. The maximum sum assured could rise depending on inflation and the age of the policyholder. "Our health insurance cover will increase based on the insured’s age and economic factors such as inflation. The policy will be available to senior citizens but may not cover pre-existing ailments," a senior LIC official told The Telegraph. He said the premium would be around Rs 5,000 and would be charged annually. The premium will be progressive, which means the cost will rise with age. This is in contrast to life insurance policies where the premiums are constant throughout the term. The other difference is that the utilisation of claim benefits will be decided by the insured. LIC will release the funds to the policyholder through its banking partners. LIC’s health insurance policy will be a long-term scheme that will offer medical cover for 10 years and above. The policy will also have a savings element through a unit-linked route that will generate a certain sum for the policyholder from the accumulated premium on maturity. Earlier, D.D. Singh, LIC’s executive director for health insurance, had said the policy would have a hospital bill facility under which a lump sum would be paid upfront to the policyholder for a specific ailment rather than reimbursing the claim after treatment. Munich Re will be the reinsurer for LIC’s health insurance product. Sources said the corporation might also talk to Swiss Re for its future products. The LIC’s health insurance business team will have 20 to 30 people headed by Singh. It will be based in Hyderabad. A year ago the Government of India allowed life insurers to sell stand-alone health insurance products. To encourage such policies, the regulator has relaxed the solvency norms for health insurance. By Anirudh Laskar Copyright © 2006 The Telegraph