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Understanding Arogya Sanjeevani Policy – the Standard Health Insurance Product

The penetration of health insurance in India, a country of 135+ crore, is significantly low. As per reports, only 34% of people have a health insurance cover in India. Among other reasons, complicated policies, high premiums and the lack of awareness are key factors. In this regard, the Insurance Regulatory and Development Authority of India (IRDAI) on January 2, 2020, directed all insurance companies to offer a standardizedhttp://iiflinsurance.com/health-insurance product. It is to be called ‘Arogya Sanjeevani Policy’, followed by the insurer’s name. This standard health insurance takes care of the basic needs of the policyholder. It also covers the risk of COVID-19-related hospitalisation and is simple to grasp.

It is time to understand the standard health insurance policy and its features.

The finer points of the Arogya Sanjeevani Policy 

The standard health insurance policy, Arogya Sanjeevani Policy, aims to improve the penetration of insurance in the country. It offers affordable premiums and standard terms with common policy wordings, across all insurance companies. The policy also promotes seamless portability from one insurer to another. Started in April 2020, the plan is available with all health and general insurance companies. Arogya Sanjeevani Policy is a standalone product and cannot be combined with other additional insurance plans or riders to keep it as simple and plain vanilla as possible.

Features of Arogya Sanjeevani Policy

As per the IRDAI, the standard health insurance product offers basic indemnity health insurance benefits. Key features of the policy are:

  • The minimum and maximum sum insured

Arogya Sanjeevani Policy offers a minimum sum insured of Rs. 1 lakh. The maximum sum insured under the policy is Rs. 5 lakhs (in multiple of 50,000). For a floater health policy, the sum assured applies to the whole family. In the case of an individual standard health policy, the sum assured applies for each family member, individually.

  • Eligibility and policy tenure

The minimum entry age for enrolment in the standard policy is 18 years. The maximum entry age is 65 years. There is no exit age. The health policy also offers lifetime renewability. It can cover: 

  • Self
  • Spouse
  • Parents and parents-in-law
  • Dependent kids between the age of 3 months and 25 years

A child above the age of 18 and who is financially independent cannot be a part of the health insurance policy. 

The policy offers a one-year-long cover.

  • Premiums

The premiums of Arogya Sanjeevani Policy can be annual, half-yearly, quarterly or monthly. Policy premiums are uniform across insurers. They are set on a pan-India basis, with no zonal or geographical pricing. The standard health insurance plan also offers a grace period for premium payments. For annual premium payment mode, 30 days of grace are allowed. For all other premium modes, a period of 15 days is offered as grace period. The insurer allows the policyholder 15 days from the receipt of the policy to review the terms and conditions. If the policyholder is not satisfied, they can opt to cancel the contract.

  • Coverage

Arogya Sanjeevani Product is an annual policy renewable for life and covers the following: 

  • hospitalisation costs
  • expenses incurred for surgeries, consultations, diagnostics, specialist fees, surgical equipment, oxygen and more 
  • hospitalisation under the AYUSH (Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy) treatment without any sub-limits
  • Pre-and post-hospitalisation (30-days before and 60-days after), ICU and ICCU expenses (5% of the sum insured or Rs.10,000/day)
  • COVID-19 afflictions

Arogya Sanjeevani Policy additionally covers dental treatment and plastic surgery costs because of injury or illness. All day-care expenses, road ambulance (upper limit of Rs. 2,000) are also a part of the insurance cover. Moreover, it offers 2% of the sum assured (maximum Rs. 5,000) for the room, boarding and nursing costs. Policyholders can also avail cataract surgery benefits, subject to 25% of the sum assured or Rs. 40,000, whichever is lower. The highlight of the standard product is the inclusion of modern treatment costs like balloon sinuplasty, etc.

  • Cumulative Bonus

For each claim-free policy year, the sum assured (excluding the cumulative bonus) increases by 5%. For this, the policy should be renewed without a break. In case a claim is made, the cumulative bonus reduces by the same percentage at which it accrued. The insurance policy also has a fixed co-pay of 5%. This implies that the policyholder, irrespective of age, pays 5% of the claim amount. The insurer pays the remaining sum.

What should you do?

At the entry-level, Arogya Sanjeevani Policy is a viable product. In most likelihood, the plan will benefit the industry and the people, especially the middle-income group. But it has specific limits and features, like co-payment and restriction on room rent. So, even though the policy is affordable, you need to understand its offerings in-detail and the limits before purchasing. Read all the terms and conditions properly. For professional guidance, you can always connect with expert insurance agents.

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