Articles 2179 views March 6, 2020

IRDAI Considers Allowing Life Insurers to Offer Indemnity Health Insurance Plans

Insurance Regulatory and Development Authority of India, the apex insurance regulatory body is considering the proposal of allowing life insurance companies to offer indemnity-based health insurance policies. Currently, it is the general insurance companies that offer these indemnity based health insurance plans. However, with the rapid and rising demand for health insurance policies by the customers, the life insurance companies are seeking approval from the IRDAI to conduct the business of health insurance selling.

Health Insurance

Please fill the details below and our policy experts will call you to help figure out the correct health insurance policy for your needs


To understand the feasibility of the proposal of allowing life insurers to sell indemnity health insurance plans, IRDAI has set-up a 9 member committee. The committee chaired by Mr. MD G Srinivasan (former chairman of New India Assurance) and Mr. MR Kumar (current chairman of Life Insurance Corporation of India) is studying the feasibility of the proposal.

Currently, as per the IRDAI (Health Insurance) Regulations, 2016 lead down by IRDAI, Life insurance companies are allowed to market and sell benefit-based health insurance policies. However, the current proposal seeks approval from the apex institute i.e. IRDAI to allow selling indemnity health insurance plans.

Indemnity based plans are a type of health insurance plan which reimburse the actual expenses incurred by the insured at the time of hospitalization. The expenses cover offered under the indemnity health insurance plan is limited to the total sum insured availed under the health insurance policy. These policies are designed to offer reimburse the actual cost of medical expenses i.e. if a policyholder has a total sum insured of Rs 10 Lakhs and in the event of hospitalization, the cost of medical expenses is Rs 5 lakhs, the insurance provider will reimburse the actual cost of medical treatment i.e. Rs 5 lakhs to the policyholder. Kindly note, to receive the entire amount related to the cost of hospitalization the policyholder is required to submit all the relevant and required detailed bills of expenses related to hospital stay and treatment expenditure.

Currently, healthcare and health insurance premiums are the biggest contributors to the health insurance sector. The statistics of the health insurance sector has been trending since the last decade. Currently, the health insurance premium registration has seen significant growth of 21.8 per cent in the FY 2017-2018. Not only this, as per IRDAI, 5 leading states namely Maharashtra, Tamil Nadu, Karnataka, Delhi, and Gujrat contributed 68% of health insurance premium in the FY 2017-2018. Therefore, a handful of life insurance providers are seeking opportunities from IRDAI and making representations to the institute for the same.

As per Santosh Agrawal, Chief Business Officer, “IRDAI is considering the proposal of allowing life insurers to offer indemnity health insurance plans because life insurers will be able to bring on table the long-term pricing to customers and with the help of life insurance providers health insurance market penetration is expected to rise.”

As per the press release, the 9 member committee set to overlook the feasibility of the proposal is asked to submit their recommendations to the IRDAI within 2 months starting from the date of issue of this order.

People Also Read