The new-age Indian consumer has firmly taken control of their financial planning. Not only are they increasingly cognizant of product and service offerings, but they also demand value addition from these offerings. This shift can be attributed to various factors - shifting demographics, evolving consumer needs, and preferences, and more importantly, the proactive regulatory initiatives taken by the Insurance Regulatory Authority of India (IRDAI).
While India boasts of the highest number of young people in the world, it is also a fact that its population is rapidly aging. It is estimated that the current elderly population (aged 60 years and above) would more than double by 2050 to a staggering 347 million. So on one hand, there are the insurance needs of the young demographic, which needs to be balanced with the evolving needs of the elderly.
Meanwhile, there is also a trend of the increasing participation of women in the workforce which also led to a rise in demand for insurance products that specifically cater to their needs. All these factors collectively have led to new challenges for the insurance sector. The good news is that the insurance trends are adapting to this shift in the demographics and the changing consumer preferences.
Right from maternity benefits to coverage for pre-existing diseases (PEDs) to affordable health insurance and OPD coverage – there’s an impressive line-up of new-age features that insurance companies have launched to cater to the evolving needs and demands of the consumers. Moreover, IRDAI has been taking several initiatives to provide a platform for the insurance companies to innovate and provide new meaningful features to policyholders.
Let’s look at some of the features that have been introduced in health insurance to make them more suited to the modern times:
Wellness Benefits: The thing about the young generation is that it knows the importance of staying fit and invests heavily on their health. At the same time, they do understand that while all these efforts to stay fit are critical, health emergencies can still strike them when they least expect it. And that’s why they need health insurance. So insurers have come up with a feature that rewards them for their effort towards staying healthy. The ‘Wellness Benefits’ feature can save them up to 100 per cent of their premium by staying healthy. Under this program initiated under the directions of the IRDAI, all the policyholder has to do is adopt healthy lifestyle and indulge in physical activities like walking, cycling, jogging or exercising. For these activities, they will get reward points which they can redeem as premium discounts at the time of renewal.
Maternity Benefits: With increasing awareness about insurance among women, working as well as homemakers, the demand of maternity benefits in health plans has witnessed an uptick. Earlier, maternity insurance coverage had many limitations. This has significantly transformed now into a much more comprehensive benefit, which covers not only childbirth but also pre-natal and post-natal consultations and procedures. Moreover, new-age plans come with a waiting period as low as 9 months now, which makes family planning a lot easier and feasible for young couples. Some plans allow policyholders to carry forward the unclaimed maternity sum insured to the next year.
Coverage for the elderly: For the aging population, a genuine concern is the coverage against pre-existing diseases. But they need not worry anymore as several modern-day plans cover pre-existing diseases and one need not wait for years to have coverage against them. Some plans cover PEDs after a short waiting period of 90 days, while others cover them from day one. This means that if you opt for the day-one feature you would be covered against any listed PED immediately after the initial 30-day period. Just be sure to declare the PED when you purchase the policy.
IRDAI has also recently taken a lot of initiatives for this segment – reducing the waiting period from 4 to 3 years is one such example. Additionally, the age cap of 65 years was also recently removed for policyholders buying insurance. These are significant strides towards more holistic and inclusive coverage.
Cashless Anywhere: One major concern for all policyholders during a medical emergency used to be whether the nearest hospital part of the network hospital of their insurance provider. However, the new initiative by the IRDAI has been a game changer enabling policyholders to get admitted to any hospital and get cashless treatment anywhere. In case of a medical emergency, you can simply go to the nearest hospital, inform your insurer within the stipulated time and the claim will be paid in a cashless manner. Just make sure that the hospital is not blacklisted or the claim made is not outside the purview of the policy.
Mental Health Mandate: Mental health has been a taboo for the longest time. But the initiative of the IRDAI to mandate insurers to treat mental health issues at par with physical ailments is a major milestone in the right direction. As per the data, one in every five individuals suffers from one or the other mental illness. Just like physical ailments, mental ailments also require proper medical attention. So bringing them under the umbrella of health plans would help a huge section of the population.
Online Issuance Mandate: To make managing policies easier for policyholders, the IRDAI has mandated all insurance companies to issue insurance policies in electronic form which can be held in demat-like account. This will reduce paperwork, make the policy accessible to you at all time and will make claim processing more streamlined. Will all policies in one place, it will also be easier to manage them and renew them on time.
OPD Cover: The industry has worked wonders to develop the OPD category. Considering the fact that most medical expenses are not limited to hospitalisations, the expense incurred on OPD needed to be covered by insurance. There are significant medical costs incurred by individuals and families every year on routine checks, annual medical examinations and diagnostic tests etc. which is now covered under insurance.
It is fair to say that these innovative solutions launched by insurance companies under the guidance of the IRDAI are collectively addressing the challenges posed by shifting demographics and evolving consumer preferences.
Author: Sarbvir Singh, Joint Group CEO, PB Fintech
Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of IIA and IIA does not assume any responsibility or liability for the same.