New India launches country's cheapest health insurance top-up

The country's largest health insurance provider, the state-owned New India Assurance, has come up with what it claims to be the cheapest top-up cover, whereby hospitalisation expenses ranging from Rs15 lakh to Rs20 lakh can be availed of for Rs3,500 a year for persons up to 44 years old.

The policy is being sold not only to those who have a basic mediclaim policy but also to  uninsured people who are in a position to bear expenses up to the threshold limit of Rs5 lakh on their own.

Although top-up covers have been available industry for several years, New India's product has the potential to disrupt the market with its distribution reach as the country's largest non-life insurer.

Company officials said that the NIA cover was 25 per cent cheaper than what was offered by rivals.

"The only sub-limit is in respect of room charges. The room rental limit is Rs5,000 per day for someone with a Rs5-lakh threshold and Rs 8,000 if the person goes for a Rs 8-lakh threshold," said Segar Sampathkumar, general manager and head of health insurance at NIA.

Sampathkumar said that although the policy could be used for all critical illnesses, it would still make sense to buy a small critical illness cover to take care of the non-hospitalisation expenses.

Critical illness policies typically provide a cash benefit for the policyholder upon detection of the ailment.

A unique aspect of NIA's cover is that for the threshold limit to be reached, all hospitalisation expenses are taken into account irrespective of whether the expenses would qualify as an insurance claim. This means that the insured can spend Rs5 lakh on a cosmetic surgery (which is not covered under mediclaim) and recover any additional health expense (covered under mediclaim) under the top-up plan.

Besides being sold as an individual policy, the top-up cover is also a family floater plan where the sum insured is shared among all members of a family.