Insurers raise premiums but cut benefits on mediclaim

POLICY WOES: Experts say it's time people started looking for their own mediclaim covers.

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Keywords: Companies, Policies

New Delhi: If your company's group mediclaim is all you rely on for your medical expenses, it's time to wake up. You could be in for less than what you bargained for as insurers have raised premiums on such policies and are cutting benefits to keep costs down.

Step by step towards a big shock. Arun, an MNC bank employee, depends solely on his company's mediclaim. Insured for Rs 5 lakh, he believes the cover is enough protection.

Arun says, “I haven't even thought about taking the mediclaim because the sum assured is quite sufficient to cover me and my family.”

But it might not. Most corporates have been knocking off several benefits from group policies to keep down costs.

Karan Chopra from ICICI Lombard says, “A lot of riders and benefits are being removed from group covers to keep premiums low. Riders like pre-existing illness covers and covers for dependents are being reconsidered.”

This year the premium on group Mediclaim policies rose 15 per cent to 20 per cent. The claim ratio of these policies is almost 100 per cent. That means for every Rs 100 insurance companies collect as premium, they pay out an equal amount, making it a no-profit proposition.

Until 2006, insurers used premiums from fire and engineering policies to subsidise group mediclaim policies. But after de-tariffing this year, fire and engineering premiums have fallen sharply.

So, mediclaim policies are being issued according to their claim ratios. Experts say it's time people started looking for their own covers.