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Who should opt for the Arogya Sanjeevani insurance policy?

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Insurers have to mandatorily offer the Arogya Sanjeevani policy with a sum insured ranging from 50,000 to 10 lakh from 1 May. This is the second time that the Insurance Regulatory and Development Authority of India (Irdai) has modified the maximum sum insured limit of this policy.

In July 2020, the Irdai had let insurers create sum insured options as per their own needs as it removed the maximum sum insured limit from the Arogya Sanjeevani policy.

However, last month, the regulator again capped the maximum sum insured limit at 10 lakh, which is double the initial limit of 5 lakh.

The Arogya Sanjeevani policy has been designed by the regulator and is available across all insurers. This standard health policy ensures that people have one policy that has a uniform cover across industry and buyers don’t get confused between different products of an insurer.

“Irdai wants insurers to widen the coverage options so that people from different strata have access and make use of this standard policy,” said Mahavir Chopra, founder and CEO, Beshak.org, an independent consumer awareness platform for individual insurance buyers. “The mandatory covers were always from 1 lakh to 5 lakh; that never changed. These limits were removed in July for insurers who want to offer higher limits. The modification is an instruction to mandatorily offer widened limits of 50,000 to 10 lakh instead of 1 lakh to 5 lakh.”

The rules on sum insured limit will clear the confusion around how much maximum limit one can get while buying the Arogya Sanjeevani policy.

Arogya Sanjeevani is suitable for a young, first-time insurance buyer as it allows them to evaluate policies easily and helps in the wider adoption of the policy.

Mrin Agarwal, director, FinSafe.in, said that with increasing medical costs, especially in tier-1 cities, the move to increase the cap of the policy sum insured limits is good for customers. “The hike in the premium for larger cover is also minimal,” Agarwal added.

Aatur Thakkar, co-founder and director, Alliance Insurance Brokers, said, “People looking for standard health coverage can go for this policy, where the maximum coverage will go up to 10 lakh as per the revised rates by the regulator from 1 May onwards; the policy still comes up with sub-limits on the room rent, treatment costs, etc.”

The policy comes with a room rent sub-limit of up to 2% of the sum insured, subject to a maximum of 5,000 per day and for ICU charges up to 5% of the sum insured, subject to a maximum of 10,000 per day.

Similarly, every claim under the policy is subject to a co-payment of 5% applicable to the claim amount admissible and payable as per the terms and conditions of the policy. For instance, a 5% co-payment clause indicates that the insured will pay 5% of the claim amount and the insurer will pay the rest.

“Policy buyers should take a long-term perspective before opting for a health policy, which meets the needs and requirements of every family and whose coverage is not insufficient when one turns 65-70 years old,” said Thakkar.

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