Life insurance companies have now begun offering health insurance products in a bid to grab market share of the booming health insurance industry. These products are savings-linked or investment oriented.
Private health insurance has had a heyday in recent years, taking advantage of the absence of state-sponsored health insurance schemes, and low penetration - of about 5 per cent. Added to this, is the rising cost of medical treatment. These factors have helped health insurance sales grow, making it the fastest growing insurance product in the country today. Health insurance products are growing by 30 percent every year.
Many life insurers, hence, have entered the health insurance space: Life Insurance Corporation of India, Aviva Life Insurance and Max Life Insurance have already moved into this space with unit-linked insurance products (ULIPs), related to market performance.
Life insurers also offer savings-based products and lumpsum compensation for critical illness or surgical benefits. If a policyholder has a serious ailment defined in the policy, he or she is entitled to a lumpsum benefit. These long-term products have tenures going up to 20 years. At the end of the policy tenure, policyholders is entitled to receive the fund value. Generally, the health insurance scheme is not cashless. Payment has to be made earlier, and is reimbursed on submission of bills.
Most general insurers on the other hand, provide cashless hospitalization in the event of an illness or accident. They also offer a variety of value-added benefits such as hospital cash allowance, home nursing allowance recovery grants, etc.