A single-premium health cover for wider reach

Insurance Regulatory & Development Authority of India (IRDAI)  is on the verge of drawing frameworks to widen and expand the insurance  penetration in the health segment.

In this move the Individuals could soon get access to long-term plans, health savings accounts and single-premium health insurance policies and the employers could also be allowed to avail  long-term group health insurance policies for their employees, against the annually renewable contracts at present.

Single premium and long-term health plans will allow policyholders to lock into the premiums for a longer tenure at a time when medical inflation is rising every year. At the same time, for insurers, this would ensure loyalty of customers over a long period of time.


At present, health insurance policies are renewed annually though some companies offer products with a term of two years. The insurance regulator has already permitted non-life insurers to sell three-year two-wheeler insurance policies.
“A need was felt by IRDAI to revisit various areas of the health insurance framework such as products, distribution, actuarial related matters like pricing, claims experience, solvency, M&A, rural and social obligations, etc., so that the entire processes are streamlined to cater to the growing demands of the market for health insurance and also to enable companies to gear up well for meeting such demands in terms of innovation and servicing capabilities,” said Ajay Bimbhet, managing director, Royal Sundaram Alliance Insurance.

It is proposed that long-term health policies could carry a tenure of 3-5 years and health savings account or corpus will create a fund over 5-15 years to finance insured’s healthcare expenses during their post-retirement years.

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