Health insurance companies will offer reward points to policyholders who maintain good health and regularly take part in various wellness and fitness programmes. The rewards could be redeemable vouchers for health supplements, membership in yoga centres, gymnasiums, sports clubs or fitness centres. The insurer can also provide discounts on premiums or increase the sum insured at the time of renewals based on the wellness regime followed by policyholders in the preceding policy period.
To popularise wellness and preventive care, Insurance Regulatory and Development Authority of India (Irdai) has issued guidelines on product filing. It has underlined that no wellness and preventive feature can be offered without it being filed or incorporated as part of the product in terms of the Product Filing Guidelines. The regulator has underlined that wellness and preventive features under a policy can be offered either as optional or add-on cover.
Bhabatosh Mishra, director – Underwriting, Products & Claims, Max Bupa Health Insurance, says there has been growing demand from consumers for wellness-linked benefits as we see the trend of utilisation going up. “Covid-19 has brought in higher awareness amongst consumers and adoption of digital health and wellness features is on the rise. In our country, we see a surge in chronic conditions and preventive healthcare is important to manage such conditions,” he says.
Adarsh Agarwal, appointed actuary, Digit General Insurance, says Irdai’s move will not only help in increasing the health insurance penetration but will also encourage people to maintain a healthy lifestyle. “Insurers can offer reward points based on how healthy the policyholders are, which can be further converted into discounts on premium and/or increase in sum insured at the time of renewal, redeemable vouchers for gym membership and other wellness benefits. This will be a good incentive for policyholders to maintain a healthy regime, while also reducing the loss ratio for insurers,” he says.
Insurers can promote wellness amongst health insurance policyholders by offering health-specific services provided by network providers, empanelled hospitals or service providers for outpatient consultations or treatments, pharmaceuticals, health check-ups/diagnostics, including discounts on all these.
The regulator has made it clear that insurers will not publish the trade names or trade logos of third party merchandise in any of the insurance advertisements, but may refer to the services in generic terms. Insurers will have to disclose the specific items of services in their website with necessary details and may provide a link to this in their insurance advertisement and policy contracts.
For family floater plans, insurers will have to disclose in the policy document, the manner in which accrual and redemption of rewards is considered for all members covered. Every insurer will have to specify in the policy contract if the accrued rewards can be carried forward when the policy is renewed and the period of validity of the accrued rewards will have to be mentioned. However, in case of expiry of policy, the accrued rewards may be carried forward for a period of three months only.
Insurer will notify the rewards accrued and the entitlements of the policyholders under the wellness and preventive features at least once a year. They will specify in the policy contract and prospectus, the mode of communication for notification of various services offered under the scheme. Insurers will also specify how to redeem the rewards accrued under the wellness and preventive features in the prospectus, policy wordings and disclose updated information in their website.
Insurers will make no discrimination in providing any of the wellness and preventive features offered and in granting the reward points to the same or similarly placed categories of policyholders of the underlying health insurance product. Insurance companies will be responsible for any errors or omission in calculation of accrued rewards and will address it through their in-house grievance redressal mechanism.
Insurers will have to assess the pricing impact of wellness and preventive features and it has to be disclosed upfront in the File and Use or Use and File application.
Experts say there will be a pricing impact after inclusion of such benefits in the policy. However, in the long run, use of wellness services should lead to better health and reduce the expenses towards treatments. Gurdeep Singh Batra, head, retail underwriting, Bajaj Allianz General Insurance, says the company will be able to give discounts to its customers if they follow the wellness criteria which will be defined in the policy. “This in its true sense shall help policyholders to monetise the reward points earned by them by following a certain wellness regime. This feature will be now available as an add-on under the policy,” he says.