Star Health today launched a health insurance policy that starts covering pre-existing diseases just after 11 months after a customer buys the policy.
This is in contrast with the other products in the market, where the insured has to wait for about four years for the policies to begin covering diseases that existed prior to the purchase of insurance.
Persons between 18 and 65 years can take Star Unique Health which covers all pre-existing diseases except cancer and renal disorders, and is available for Rs 1 lakh, Rs 2 lakh and Rs 3 lakh covers.
However, the catch in the policy is that the insured will be paid only 50 per cent of the cover sum if an ailment arises out of a pre-existing disease.
Star Health also launched today another policy — Star Wedding Gift — designed with newly-weds in mind.
Three years after the purchase of the policy, it will cover child-birth-related expenses, any congenital diseases of the child, and provide medical insurance for the parents and the children.
Company officials said there were medical insurance products in the market that also covered child-birth expenses, but Star Wedding Gift is more specific to child-birth with general medi-insurance riding alongside.
Now, insurance is about covering uncertainty and chance occurrence, while the delivery of child in a wedlock is not that. How does an insurance company make money on a policy like this, where the claim is more or less certain?
Company sources explained that infertility rates in India are about 30 per cent—divided between men and women—therefore, the claims are roughly 70 per cent. Moreover, there is a waiting period of 3 years for the policy to become operational. Therefore, the policy is remunerative for the insurer. The customer would also find it useful because it has many beneficial features such as cover for post delivery complications and lump sum payments if the child is born with Down's Syndrome or Cerebral Palsy.
Star Health and Allied Insurance Company expects to close the current year with a topline of Rs 1,250 crore. Last year, it made a profit of Rs 5 crore. Company officials say that current year's profits will be substantially higher.
