Should you consider buying a top-up plan with Arogya Sanjeevani policy?
- Insurance experts suggest that first-time individual health buyers should go for the Arogya Sanjeenavi policy with a limited sum insured
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Business News/ Money / Personal Finance/ Should you consider buying a top-up plan with Arogya Sanjeevani policy?
NEW DELHI :The Insurance Regulatory and Development Authority of India (Irdai) mandated all insurance companies to provide the Aarogya Sanjeevani Policy from April 2020; it has now also enhanced the maximum sum insured limit of the health policy. In such a situation, should you buy a standard health policy with a maximum sum insured of Rs10 lakh or add a top-up policy?
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Arogya Sanjeevani policy is a standard indemnity health insurance policy for individuals and families, which provides coverage with a sum insured ranging from Rs50,000 to Rs10 lakh for basic hospitalization-related expenses. You can buy the policy up to the maximum sum insured limit.
Anyone from the age of 18 years to a maximum age of 65 years can buy this policy. It covers all daycare treatments, which means any medical treatment or surgical procedure undertaken under general or local anaesthesia at a hospital in less than 24 hours because of advancement in technology. However, the policy doesn’t cover treatment taken on an outpatient department (OPD) basis.
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Moreover, the policy comes with various sub-limits on room rent and treatment cost. For instance, the sub-limit on room-rent and ICU charges is up to 2% and 5% of the sum insured, respectively. Besides, the policyholder will also have to make a co-payment of 5%, which is the amount paid by him to the hospital before receiving the service.
Further, you must also know that when you opt for a top-up policy, it starts paying claims after a certain amount is paid by the policyholder. For instance, in a top-up policy if Rs5 lakh is deductible, the policy will start paying after Rs5 lakh up to the extent of the sum insured opted under a top-up plan.
“A top-up plan works differently compared with a base hospitalization policy as it is triggered only when the aggregate of all in-patient hospitalization claims in a policy year surpass the deductible as opted by the customer," said Sanjay Datta, chief-underwriting, claims and reinsurance, ICICI Lombard General Insurance.
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Should you buy a top-up plan with this policy?
Insurance experts suggest that first-time individual health buyers should go for the Arogya Sanjeenavi policy with a limited sum insured. The policy is easy to comprehend and has wide coverage, including day procedures. However, they shouldn’t buy a top-up plan along with this policy. If they want higher coverage and want to cover their entire family, they should ideally go for a comprehensive health insurance policy.
“Arogya Sanjeenavi policy in itself is a restricted cover which has mandatory co-payment of 5% for each claim and capping of room rent, which often results in a proportionate deduction in claims and if in such a health policy if you combine top-up cover, it will be a big disadvantage for you as you may have to pay a lot of amount from your pocket," said Nikhil Apte, chief product officer - product factory (health insurance), Royal Sundaram General Insurance.
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In the case of proportionate deduction, the overall claim made is reduced as a proportion of the difference between the eligible and the availed room cost. Hence, the hospital bill in such a case is not completely reimbursed.
Apte further said, “Top-up plan works better with a comprehensive health cover which offers you complete surety of cover. Therefore, in our view, it is not advisable to have a top-up policy with the Arogya Sanjeenavi policy. It is a product for first-time buyers and youngsters who do not perceive a high risk of hospitalization."
Echoing the views, Mahavir Chopra, founder and chief executive officer of Beshak.org, said that a policy buyer should go for a policy that doesn't have a highly restricting room rent limit in a health insurance policy. It will be prone to deductions now and much more in the future as inflation catches up. “Arogya policy has a room rent limit. It's not useful for people who want to expand their coverage. The room charge cap limits the cover, even though the sum insured is high," said Chopra.
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