Point of sale persons can sell mediclaim
The Insurance Regulatory and Development Authority of India (Irdai) has allowed the sale of indemnity-based health insurance products through Point of Sale persons (PoS). As per a circular (read it here) issued by Irdai on 25 October, the PoS will now be allowed to sell these insurance products to individuals but only up to a sum assured limit of Rs5 lakh. The PoS cannot sell group policies. And, the regulator has capped the number of such PoS products per insurance company to three.
Point of Sale person in Insurance
To enable the insurance sector in the country to deploy more distributors on the ground, in 2015 Irdai allowed for a new type of distributors called the point of sale persons, commonly called PoS. To get such distributors on board easily and quickly, the regulator has kept their qualifications simple: education till at least Class 10 and above 18 years of age.
As per the regulator, products such as motor insurance, travel insurance and personal accident insurance require very little underwriting as they are based on information provided by the prospect, or consumer. Also, now such insurance policies are automatically generated by the system. Therefore, the intervention required for such products is minimal and the training and qualification exams for such persons could be of a lesser degree than that for a full-fledged distributor.
Initially, Irdai had appointed National Institute of Electronics and Information Technology (NIELIT) to conduct the examination of certificate for PoS.
Later the regulator removed this condition. Accordingly, Irdai has allowed in-house training by insurers or intermediaries engaging the PoS.
The requirement now is that a PoS has to undertake a 15-hour training and then an examination, to get a certificate from the intermediary or insurer.
Indemnity-based health insurance
The common basic health insurance policies, also known as mediclaim policies, are indemnity-based health insurance products. An indemnity product pays the actual expenses for the insured event, up to the sum assured limit. For health insurance, this could mean hospitalization and pre- and post-hospitalisation expenses and other specified procedures in the specific policy. This payment could be in the form of a reimbursement or through a cashless process directly to the hospital. Even if you use this insurance to the maximum limit, you can renew it in the next policy year.
The other type of health insurance plans are defined benefit plans. These plans pay a lump sum in case of specified medical event, regardless of medical expenses. Irdai had, in 2016, included two such plans in the products allowed to be sold through PoS:
1. Hospital cash policy with a fixed benefit in the form of cash for every day of hospitalization with a limit of Rs1 lakh per individual (for the entire period of hospitalisation), and
2. Critical-illness policy covering eight or nine critical illnesses with sum insured limit of Rs3 lakh per individual.
If you do not have health insurance, you must get a basic indemnity-based health insurance first. A fixed benefit plan can be added to fill the gaps, if any, in your mediclaim.