Your insurance coverage coverage might reward you for staying match

“While traditionally, health insurance products have been conceptualized as being focused on curative aspects, the new guidelines will help insurers focus on preventive aspects. For policyholders, this brings an opportunity to compare the quality of health insurance products not only on price but also on the wellness benefits they offer," said Shreeraj Deshpande, chief operating officer, Future Generali India Insurance Co. Ltd. The regulator had first published the draft guidelines in November last year.

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We tell you what these guidelines mean for policyholders and the kind of rewards the insurance companies may offer.

Guidelines

The regulator, in its circular, said insurers can offer reward points to policyholders who comply with or meet the set criteria of wellness and preventive features.

However, such features shall not be offered without being filed or incorporated in the product in line with the product filing guidelines. Insurers will also have to disclose the methodology and the criteria used for arriving at the reward points and the system of awarding them. Further, such wellness features may be offered either as optional or as add-on covers to policyholders.

Also, insurers cannot discriminate in offering any of the wellness and preventive features and in granting the reward points to the same or similar categories of policyholders. Pricing impact of the features being offered will have to be assessed and the same will have to be disclosed upfront.

The cost of administering the wellness features will have to be factored into the pricing and costs shall be disclosed in the prospectus, said Irdai. Aalok Bhan, director and chief marketing officer, Max Life Insurance, said insurers will incur expenses to set up the infrastructure to track wellness-related health parameters, service providers, merchant tie-ups and so on and some of these costs will be a one-time and some ongoing. Insurers will distribute these costs, subject to the Irdai’s approval.

“Insurers may have to carefully evaluate the impact of offering such rewards versus the potential savings in long-term claims costs on account of these incentives," said Ajay Shah, director and head, retail, Care Health Insurance Co. Ltd.

For family floater plans, Irdai said, insurers will have to clearly define and disclose the manner in which accrual and redemption of rewards would be considered.

The rewards

The regulator has listed a few benefits that insurers can look at offering such as redeemable vouchers to obtain health supplements, memberships in yoga centres, sports clubs and so on.

Shanai Ghosh, executive director and CEO, Edelweiss General Insurance, said insurers can translate wellness parameters into fitness challenges, gamify and engage customers to improve their health outcomes. Formats can be decided on steps taken, sleep patterns, weight tracking, diet regime, participation in marathons and so on.

“More advanced features could include programmes structured around the use of wearable products which collate continuous data on activities of the customer and help the insurer understand the health needs and offer a health evaluation, disease management programmes, counselling sessions or doctor consultations," said Deshpande.

Quality wellness programmes, however, will need investment by insurers in gadgets and could entail a generation of a large amount of big data, the segregation and application of which will require investment too.

“This will mean that products will be formulated at different price points which will have different levels of wellness programmes," added Deshpande.

Based on the wellness regime followed by the policyholder in the preceding policy period, the regulator said discounts on premiums or increase in the sum insured at the time of renewals can be offered. However, the increase in sum insured shall not be linked to the cumulative bonus offered.

Further, as a benefit, insurers may also look at covering the cost of treatment of an admissible claim by paying for non-payable items that are specified in the terms and conditions of the base policy. These could be oxygen cylinders, masks, OPD consultation and so on.

Bhabatosh Mishra, director, underwriting, products and claims, Max Bupa Health Insurance Co. Ltd said the trend until now has been that wellness benefits are offered under new-age health insurance policies, but the utilization continues to be low since these benefits are not well defined and consumer awareness is limited. “With these guidelines, ambiguity around wellness benefits will be minimized and insurers will be propelled to introduce more products centered around wellness benefits," he said.

Irdai has asked insurers to engage with multiple service providers but they’ve been told to not accept any liability towards the quality of services made available and this shall be specified upfront to the policyholders.

Mint take

Globally, the wellness proposition has been tried and tested in some of the developed countries such as the US, the UK, Singapore, Hong Kong, and Australia. “The most popular programme is called the Vitality programme. They have seen varied degrees of success in these countries, and the experience on their success and next phase of development is still emerging," said Bhan.

Insurers said there are some successful models across the world, where it has resulted in higher customer retention and long-term benefits for customers as well as reduced healthcare expenses in the long run.

“But some of those programmes are wider in their scope of reward redemption wherein users can redeem their points for other expenses and lifestyle experiences like travel, holidays, healthy foods, groceries and so on," said Shah.

For policyholders, this is a good starting point because having a structured wellness programme will enable them to follow and maintain a healthy lifestyle and the incentives through rewards or discounts will empower them to lead a healthy life. For insurers, this will mean lower claims as hospitalization instances would go down.

“For policyholders, it’s important to know that these features will become available over time as insurers file these in their new and existing products. This may or may not lead to any increase in premiums as the cost of these wellness benefits will be offset by potentially lower claims as customers stay healthy," said Amit Chhabra, health business head, Policybazaar.com.

Policyholders, however, should ensure reading the policy documents carefully to understand the implication of the wellness features on the premiums.