According to a report in Mint, the Insurance Regulatory Development Authority of India (Irdai) may soon allow life insurance companies to offer health insurance policies. The move, if and when implemented, is likely to reduce premiums of policies and boost access to affordable health cover.
According to the report, the internal committee of Irdai has been discussing the proposal for a few weeks now. The draft guidelines to allow life insurers to sell indemnity health insurance products will be released in some time.
The numbers around life insurance penetration in India are less than encouraging. Economic Survey 2021-22 revealed that life insurance penetration in India was at 3.2 per cent in 2020, rising from 2.82 per cent in 2019. The penetration of non-life insurance (health, motor, fire, and industrial insurance) is in a far worse position at 1 per cent. The global average is 4.1 per cent, reported Mint.
According to the report, Irdai may allow life insurers to either sell existing health insurance policies of other companies or will enable them to both design and distribute mediclaim policies.
Currently, a basic health insurance policy with a sum insured of Rs 2 lakh carries a premium of Rs 5,000-7,000 per annum for an adult without any pre-existing diseases, aged 18-50. It is speculated that health insurance premium range may get lowered by 5-10 per cent if Irdai allows life insurers to design and sell medical insurance.
Health insurance accounts for 33 per cent of the total non-life industry premiums. In FY22, the health insurance premiums totalled Rs 73,578 crore.
Earlier in 2016, Irdai barred life insurance companies from selling indemnity health insurance policies.
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