Bajaj Allianz launches Critical Illness Insurance Policy for Women

The critical illness insurance plan is a highly recommended product for any individual who is closing on 40 years of age. As a person reaches 40 years, his/her chances of contracting a critical illness like cancer, heart attack, kidney failure, liver failure etc. increases massively as compared to individuals in their 30s.

While there are conflicting studies, generally it is believed that women carry a higher risk of contracting a critical illness like cancer. In Thailand, ACE Insurance promotes cancer products which carry a gender-specific pricing. The cancer plans for women were about 20% higher priced than the men plans.

Last week, Bajaj Allianz General Insurance launched a critical illness plan for women. While critical illness insurance plans in India is not novelty but targeting just women is something new. The brochure is available on the website (Bajaj Allianz Women Specific Critical Illness Brochure)

Eligibility : 21 to 55 years

Benefits : There are two key benefits under critical illness –

A) Lumpsum compensation of 100% of sum insured upon diagnosis of any of the 8 specific illnesses and if the insured survives for atleast 30 days. Of these 8 illnesses, 5 illnesses are related to cancer. The 8 specific illnesses covered are –

1. Breast Cancer

2. Fallopian Tube Cancer

3. Uterine / Cervical Cancer

4. Ovarian Cancer

5. Vaginal Cancer

6. Paralysis

7. Multitrauma

8. Burns

B) Congenital Disability Benefit – Congenital means ‘from birth’ and as the name suggests, it is payable on the birth of a child if he/she is born with any one or more of the congenital disabilities listed in the plan. The plan offers this benefit for the first two children only and not if the child is born after the mother attains 40 years of age. Under this benefit, a lumpsum amount of 50% of sum insured is payable. There are only 5 congenital diseases that the policy covers –

1. Down’s syndrome

2. Congenital cyanotic heart disease

3. Tracheo-esophageal fistula

4. Cleft palate with or without cleft lip

5. Spina bifida

As these congenital diseases will be difficult for a layman to understand, I am putting a few lines on each.

Down’s syndrome – The Down syndrome is a chromosomal condition caused by the presence of all or part of an extra 21st chromosome. Down syndrome is associated with some impairment of cognitive ability and physical growth. The average IQ of children with Down syndrome is around 50, compared to normal children with an IQ of 100. The incidence of Down syndrome is estimated at 0.14% (1 out of 733 births)

Congenital cyanotic heart disease - The name cyanosis, literally means "the blue disease" or "the blue condition". Due to a defect in the structure of the heart, there is an obstructing in blood flow in the heart or vessels near it. The cyanotic heart disease largely refer to this. Wikipedia says that approximately 9 people in 1000 are born with a congenital heart defect. Since ‘cyanotic’ is a sub-set of this, we are looking at an incidence of 0.2% to 0.5% here.

Tracheo-esophageal fistula (TEF) - A fistula, from the Latin meaning ‘a pipe,’ is an abnormal connection running either between two tubes or between a tube and a surface. In tracheo-esophageal fistula it runs between the trachea and the esophagus. Babies with TEF or esophageal atresia are unable to feed properly. Once diagnosed, prompt surgery is required to allow the baby to take in food. Few children with TEF have problems after surgery, however a number develop feeding difficulties and chest problems.

Cleft palate – Cleft palate is a condition in which the two plates of the skull that form the hard palate (roof of the mouth) are not completely joined. So, a cleft is a fissure or opening — a gap. Approximately 1 in 700 children born have a cleft lip and/or a cleft palate. Cleft lip or palate can be successfully treated with surgery, especially so if conducted soon after birth or in early childhood.

Spina bifida - Spina bifida (Latin: "split spine") is a developmental congenital disorder caused by the incomplete closing of the embryonic neural tube. Some vertebrae overlying the spinal cord are not fully formed and remain unfused and open. If the opening is large enough, this allows a portion of the spinal cord to protrude through the opening in the bones. Spina bifida can be surgically closed after birth, but this does not restore normal function to the affected part of the spinal cord.

The policy wordings of the critical illness plan defines each and every specific critical illness and congenital disease is available in the website. (Bajaj Allianz Women Specific Critical Illness - Policy Wordings)

  

Additional benefits offered under the plan include –

a) Children’s Education Bonus – Rs. 25,000

b) Loss of Job – Rs. 25,000 (if not voluntarily resigned from job)

Key Exclusions

1. There is a waiting period of 90 days. This is a bit high as other plans (like Bharti AXA’s Critical Illness plan) have a waiting period of 60 days only.

2. There is a 30-day survival clause. This means if the insured may not survive within 30 days of the diagnosis of the critical illness, then no claim is payable. (this is a bit tough in case of paralysis, multitrauma or burns. Additionally other insurers like ICICI Lombard have no survival period)

It is important to read the exclusions carefully in a critical illness policy. This is given in the policy wordings. For example – the meaning of burns to qualify as a critical illness in the policy wording is burns involving 40% or more of the body surface area (as calculated on rule of 9 for each area of body affected) OR second or third degree burns caused by accidental thermal, electric, chemical burn injury.

Plan Details

Sum Insured - There are 4 sum insured available as per the brochure – a) Rs. 50,000, b) Rs. 100,000, c) Rs. 150,000 and d) Rs. 200,000. I think these sum insured are very low when other insurers are offering anywhere from 5 lacs to 10 lacs of sum insured. Even Bajaj Allianz’s website (for their normal critical illness) plan lists the premiums for sum insured upto Rs. 10 lacs. I think interested prospect will need to check the allowed sum insured from the company website or company call-centre.

Premium – The premiums for critical illness plans are quite low as compared to hospitalization plans. However when I look at Bajaj Allianz’s premium chart, it seems to be at a 20-30% premium to what other insurers are offering.  

Medical Tests – Over the age of 40 years, medical tests are required for women to enroll into this plan. This includes a full medical report and an ultrasonography of abdomen & pelvis. In some cases (46 years and above), a PAP Smear Test is required. I am an advocate of medical tests for people above 40 years esp. for a critical illness policy as the incidence rate of having one of these illnesses is starkly high. I would not take these medical tests as a nuisance but an important part of the policy underwriting process.

  

Other approaches to product design 

I opine that the critical illness plan for women cannot be a compensation-led benefit plan. The people who will enroll for this plan will be individuals who are largely concerned about their health. They have a genuine interest in not having any of these serious diseases.

I would have structured a wellness aspect around the product which includes yearly medical checkup. This will be at the discretion of the insured member, but as an insurance company I can build an incentive if the insured does use up the free medical check feature and submits the report to the insurance company.

The Bajaj Allianz plan is a key start in moving the Indian health insurance industry in realizing the importance of demographic-led marketing and product development. I am certain that other insurance companies will follow suit with more innovative critical illness products.


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