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Homearrow News and Events Year 2013 Coming soon: Life insurance policy for HIV/AIDS patients

Coming soon: Life insurance policy for HIV/AIDS patients

Life insurance for people with AIDS and HIV may soon become a reality. The insurance regulator has issued draft guidelines seeking views from insurers on issuing life cover policies to persons with HIV/AIDS.

The draft circular by the Insurance Regulatory and Development Authority (IRDA) on policies for people with HIV/ AIDS, issued this month, may come into effect from April 2014. Insurers are expected to put in place a board–approved underwriting manual, claims manual, proposal form and other systems before this date.

A vast majority of those afflicted in India are in the age bracket of 15 to 49 years. As per estimates, about 2.4 million Indians are living with HIV/AIDS. Children less than 15 years account for 3.5% of it while 83% are in the age group of 15–49 years.

Health cover for people suffering from HIV/AIDS already exists. With advances in medical treatment, insurers are able to put in place cost structures.

  • IRDA proposes life insurance for AIDS/HIV patients from next April
  • Health cover for such cases already exists
  • Life premium will depend on age and stage of disease
  • 1.2 million Indians affected by AIDS/HIV
  • 3.5% below age of 15
  • 83% aged 15–49 Dual
cover may help firms control claims

Chennai: The proposed life insurance policy for HIV/AIDs patients is a welcome move. Some standalone health insurance providers like Star Health & Allied Insurance already offer helath insurance. "We offer group covers to NGOs for their members. ," V Jagannathan, chairman, Star Health said.

Coming soon: Life insurance policy for HIV/AIDS patients

Insurers say claims management and profitability will be key concerns when life insurance is offered to those with AIDS. There would be additional costs. "In terms of product pricing, insurers mostly rely on past claims experience. Since this would be a new product altogether, the pricing could be at both ends of the spectrum. Insurers may start at the lower range, get claims and then revise premiums upwards. They may also err on the side of caution with higher rates in the beginning and as more players come into the market, the rates would become more competitive," Rahul Aggarwal, CEO of Optima Insurance Brokers, said.

"The premium loadings would also depend on the age of the person and stage of the condition," Vikas Gujral, executive vice–president and head, customer service and operations, Max Life Insurance said.

Some companies are looking at dual cover—health in addition to life—to ensure better claim control. "We may insist on a health cover before issuing a life cover for this segment because in case of AIDS/HIV, the patient has lower immunity than the rest of the population. So, he/she is susceptible to other illnesses as well," a life insurer said.

Industry observers say that due to the nature of the condition, insurers would also have to contend with a huge claims outgo. "Chances are high that the insured may use up the sum insured every year and once a policy is issued, it cannot be withdrawn," Aggarwal said.

Insurers are also playing it safe. Companies like Max and HDFC have already started talks with global reinsurers to participate in this scheme.

Times of India
23 October 2013,
Chennai, India.
By - Aparna Ramalingam.

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