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Wednesday, March 15, 2017

'1 Crore' - the new catchword in health insurance

The buzz word first introduced by Mr. Amitabh Bachchan, Kaun Banega Crorepati, in the beginning of this millennium had opened a dream world for the common Indians. However, it took sometime for us to sink in and consider the figure as a real achievable target. Until the early last decade till about 2005 to be precise, 1 crore was not even distant dream for most of us. Indian population was very happy with endowment plan for 1-5 lacs rupees and felt content with the 'suposedly' financial planning. Then came the disruption! hail the magic word Rs. 1 crore. 

Insure for 1 crore
The two new words changed the financial services of India forever. The two words were 'Term plan' and 'SIP' - systematic investment plan. 
The 'term plan' the true insurance product came in force in India in early 2000. The product came frill free sans the investment component. So, the newly formed private insurers began launching term-plans of 10 lakhs, 25 lakhs, 50 lakhs, 75 lakhs and 1 crore for a fraction of  a cost which LIC sold its' endowment policies and the newbie ULIPs. The country reacted in disbelief! It took a decade, but 1 crore has became a new normal of Indian middle class, thanks to to the term insurance plans.

SIP to 1 Crore
Not to forget the aggressive promotion of 'SIP' by mutual fund companies harping on 'power of compounding' often projected 1 crore as target figure. Be in advertisement on personal finance stories, saving a few thousand rupee every month for 20 years could yield 1 crore was used as a magic figure in numerable instances catching the fancy of Indian salaried class. 
Now - Health cover for 1 crore
However, this wasn't yet the case for health insurance industry until recently. Rs. 3 lakh to 20 lakh at the premium side was a common norm until about 2 years back. However, the healthcare cost of India has multiplied over last few years and surging way ahead of the inflation numbers. Incase of critical illness, one may have to cough-up upto INR 25-30 lakh easily only on the treatment procedure, let alone the aftercare and other financial loss causing a big dent on the resources. So, looking at the surging medical expenses and preempting the future trends, the insurance companies have launched premium insurance products with higher sum insured from 50 lakhs upto 6 crore even above. Though the product positioning may look premium, including very specialized services like global hospitalization benefits, maternity cover, organ donation etc. But eventually these services are aligining India with the global standards of healthcare. Though the premium of the products are on the higher side for now, the 1 CRORE is becoming a new normal for the health Insurance Industry too!

The few products in this category  - 
CARE Global - Religare Health Insurance
ProHealth - Cigna TTK

Apart from these, many companies do provide fixed benefit insurance for persona accident and insurance for critical insurance.

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