Insurers raise premiums, cut benefits to lower costs

If your company's group Mediclaim is all you rely on for your medical expenses, it's time for a reality check. Insurers have raised premiums on such policies and are cutting benefits to keep costs down.

Step by step towards a big shock. Arun Pai, an MNC bank employee, depends solely on his company's Mediclaim. Insured for Rs 5 lakh, he believes the cover is enough protection

Karan Chopra, National Sales Manager -Bancassurance Health, ICICI Lombard said, “A lot of riders and benefits are being removed from group covers to keep premiums low. Riders like pre-existing illness covers and covers for dependents are being reconsidered.”

This year the premium on group Mediclaim policies rose from 15 to 20%. The claim ratio of these policies is almost 120%. That means, for every Rs 100 insurance companies collect as premium, they pay out 120 rupees making it a loss making proposition

Until last year, insurers used premiums from fire and engineering policies to subsidise group Mediclaim policies. But after de-tariffing this year, fire and engineering premiums have fallen sharply. So, Mediclaim policies are being issued according to their claim ratios. Experts say it's time people started looking for their own covers.

Source : Moneycontrol.com

Comments

The process on pricing medical insurance policies is now being corrected. With claim ratios over 100%, the premiums should have been higher than the common practise already. How long can the cost of medical policies be financed with other lines of products..