Showing posts with label Insurance for Disabled. Show all posts
Showing posts with label Insurance for Disabled. Show all posts

Sunday, June 7, 2020

Despite IRDAI Advisories in 2016, Persons with Disabilities & other Vulnerable Groups still hankering for Equitable Insurance Covers.

Dear Colleagues,

In 2016 the Insurance Regulatory and Development Authority of India (IRDAI) asked the Insurance Companies to cover all kinds of risks under health policies,  and to provide covers for individuals with special needs, but the Companies are still reluctant and lacking clarity - and as a result the persons with disabilities, people with anxiety and people with HIV have no insurance cover. 

IRDAI has now again asked insurers to be transparent about offering health covers to those with HIV/AIDS, mental health issues and for persons with disabilities, since there is no coverage provided to this segment by the companies.

In compliance of the IRDA notification of 2016, the insurance companies subtly stopped using or simply removed the language related to excluding coverage for those with mental illness, disabilities and HIV to escape the long arm of the law, however, they did not actively start any coverage.

Experience from the field indicates that the Insurers routinely reject covers for differently-abled citing higher risks. For mental health issues and HIV/AIDS, there are hardly any covers available to individual customers.

So far, only national health insurance schemes run by the Govt. partially cover some of these conditions. For example, the 'Niramaya Health Insurance Scheme' by the National Trust covers conditions arising from disabilities, mental retardation, cerebral palsy, autism, and multiple disabilities. 'Ayushman Bharat', which started after the change in regulation brought out by IRDAI, has 17 packages for mental health disorders, which also includes psychoactive substance use and covers ECT (Electroconvulsive therapy), rTMS (Repetitive Transcranial Magnetic Stimulation), MRIs (Magnetic Resonance Imaging) and most of the blood tests.  But sadly, even Ayushman Bharat, does not cover HIV as of today, though there are discussions to include this condition.

Similarly, few popular state health insurance schemes running for nearly a decade like Maharashtra's 'Mahatma Jyotiba Phule Jan Arogya Yojana' or Tamil Nadu's 'Comprehensive Health Insurance Scheme' do not cover these conditions.

Likewise in the private sector, only Star Health Insurance has two plans dealing with the marginalised segments, that too are severely restricted :-
(a)  "India Medi-Classic Insurance Plan" - that covers the HIV positive or AIDS patients. (b) "Indemnity-oriented health insurance policy" - to cover children and young adults (aged 3-25) with autism.
In light of such huge deficit in the insurance coverage, the IDRAI in a notification on June 2, 2020, [link takes you to the website of IRDA], has asked insurers to provide detailed information on their websites stating their underwriting philosophy on covering people with disabilities, HIV/AIDS or mental illnesses. This has to be done by October 1, 2020. However, mere disclosure will not solve issues caused by absence of products.

Access the signed PDF Copy (inaccessible to screen readers)  of the circular Here. Content of the Circular are also pasted below for the purpose of accessibility: 

'CIRCULAR

 Ref: IRDAI/HLT/MISC/CIR/129/06/2020                    Dated:   02nd June, 2020 

To 

All Insurers (Except ECGC and AIC) 

Sub: Disclosure of underwriting philosophy of offering Insurance coverage to Persons with Disability (PWD) and people affected with HIV/AIDS and Mental Illness diseases. 

1.    Reference is drawn to the provisions of IRDAI (Health Insurance) Regulations, 2016 in accordance to which every insurer shall evolve a health insurance underwriting policy covering approach and aspects relating to offering health insurance coverage not only to standard lives but also to substandard lives. Further insurance companies shall also comply with various provisions of HIV and AIDS Prevention and Control Act, 2017 and Mental healthcare Act, 2017. 

2.    Notwithstanding the above provisions, it is considered essential that the targeted population of every insurer shall have complete information on the philosophy that insurers adopt while complying with the above referred provisions. 

3.    In furtherance to above, all Insurers are instructed to publish on their respective websites the underwriting philosophy and approach with regard to offering insurance coverage to the following category of population: 
a.    Persons with Disabilities ( PWD)
b.    Persons affected with HIV /AIDSc.
c.    Persons affected with Mental Illness diseases. 
4.    All Insurers (Life, General and Health Insurers) are here by directed to comply with the aforesaid instruction by 01st October, 2020. 

5.    This has the approval of the competent authority.  

                                                                                   (DVS RAMESH)  


                                                                                   GENERAL MANAGER (H)'

I can recall how the Postal Life Insurance (PLI) justified the extra premium and reduced sum assured to persons with disabilities when it was challenged in W.P.(C) No.10323/2009 titled Vikas Gupta Versus Union of India.  The Hon’ble  Delhi High court in the instant case agreed that charging extra premium from employees with disabilities was indeed a discrimination on the basis of disability and therefore in a remarkable judgement directed the postal life insurance to provide equal insurance coverage and not charge extra premium from the employees with disabilities. Read my earlier discussion dated 22 April 2012 on the subject in the post titled 'Extra Premium or Reduced Insurance Cover, both discriminatory against Disabled - Delhi HC'

Some Experiences from the field 
Mumbai-based software professional Nikhil Deshpande had sought a cover from his health insurance for his anxiety therapy sessions and related medication which costs almost Rs 7,000 per month. He was also hospitalised twice last year. However, the insurer informed him that no cover was available.

The same goes for the differently-abled as well. Pratigya Tiwari from Kolkata who lost her eyesight due to polio at the age of seven in 1998, still does not have a health cover. Reason? All insurers said that she is prone to higher risks and will cause adverse selection.

“I work in an administrative position in a power facility and also travel to work on a daily basis. Especially with the coronavirus pandemic, I am at a loss because if I am hospitalised I do not have any insurance. Why can’t the regulator make it mandatory?” asks Tiwari.

The magic word here is ‘mandatory’. So far, IRDAI has only ‘advised’ companies to offer covers for all types of risks, defined in insurance parlance as ‘standard’ and ‘sub-standard’ lives.

Here, standard lives are regular able-bodied individuals with no ailments whereas substandard are defined as all others. Lack of data to price products is often cited as a reason to reject covers.

While IRDAI had advised insurers to cover all kinds of health requirements, be it HIV/AIDS, cancer or mental health, the truth is that less than 10 percent of the industry is offering covers.

“Whatever few covers are available, they are not adequate in sum assured sizes. Further, the annual premiums are above Rs 20,000 which is not affordable for the masses,” said disability rights' activist Naveen Das.

Das also questioned that when insurers were offering covers for diabetes, blood pressure and even advanced stages of cancer, why not offer covers for all disabilities. When individuals with some sort of physical disabilities function normally without any major concerns, he explained that it is baffling why insurers don’t want to offer covers.

Insurance companies are of the view that certain sections of the society are high-risk depending on their physical and mental well-being. Companies feel that offering an individual cover to such people would lead to a high ratio of claims because a proportion of the high-risk category would require medical intervention at regular intervals.

Insurance works as a pooling concept where premium is put into a common pool and the claims are paid out of it. Underwriting officials believe that insuring individuals who are prone to claim regularly would mean that ‘healthy’ individuals would compensate for premium loss by having to pay a higher annual cost for covers. This argument has been earlier rejected by the Courts as indicated in the ibid judgement of Vikas Gupta Vs. UOI.

An article in MoneyControl.com titled 'Four years on, the differently abled, anxiety and HIV patients have no insurance cover. Is IRDAI doing enough?' suggests that  a better solution would be to have standardised products of health insurance of say Rs 5-7 lakh size with a premium range of Rs 10,000-12,000 for those with special needs. Those seeking a higher cover size could buy a top-up plan by paying a market-linked premium. This will ensure that no individual in India is denied a health insurance cover. With the absence of a standard social security scheme (except for the Pradhan Mantri Jan Arogya Yojana for those below poverty line), there should be more standard medical covers across the spectrum covering those with all types of physical and mental health.

As of now, in the private health insurance space, very few insurers provide coverage for HIV positive/AIDS patients. One of these policies that provide coverage is Star Health Insurance's India Medi-classic Insurance plan. And with regard to disabilities, Star health provides an indemnity-oriented health insurance policy for children and young adults with autism.

Issues that we still need to work on 
However, issues I had raised in my article dated 22 Apr 2012, continue to be relevant and we need to work on these issues. I reiterate the same once again with some improvements:-

(a) The insurance sector still discriminates on the basis of etiology of the disability i.e. causes of disability, whether it is from birth and after birth; neurological or physical and  then rates their lives accordingly,  which in my considered view has again no scientific base.

(b) The persons with neurological disabilities are still not allowed any insurance policy and needs to be challenged.

(c) The ibid Delhi HC judgement in 2012 only adjudicated about  PLI's inactions which is an insurance scheme for the benefit of government employees hence, it covered a very small section of persons with disabilities. Those who are outside the government jobs especially those in rural areas are far away from reaping the benefits of insurance, particularly health insurance. Though the judgement challenges the principles that have so far formed the basis for denying the insurance to the disabled.

(d) The Actuaries who are in the business of assessing the life risks are not aware of the real challenges and the lives of the persons with disabilities and they continue to live in their own world and decide on their own whims, the risk calculation of the life of a person with disabilities. They need to be sensitized and made aware not only about the lives of persons with disabilities but also the rights regime that UNCRPD brings.

(e) The entire literature on insurance that I had to read while pursuing this case from outside, I found it reinforced the stereotypes about persons with disabilities and their proneness to accident! Hence, we need new literature for future actuaries to understand that Disability can not be treated always as a negative health profile and that living with disability was distinct from suffering from a life threatening disease.

(f) There is a need to raise awareness that a person with visual impairment or with hearing impairment or with neurological impairment also enjoys good health like anybody else.

(g) The rules of Insurance sector needs to be changed in light of the 2012 judgement and a few more that came afterwards and applied across the sector. All insurance  issuing companies - be it private or government have to factor in the principles of this judgement and make amends. And this must apply to not just life insurance but also health insurance and other insurance products available in the market and we see a larger role of IRDAI- the insurance regulator in making their advisories mandatory.

Regards
Subhash Chandra Vashishth
Adv

Wednesday, January 8, 2014

IRDA proposes life insurance cover for persons with disabilities

Dear Friends,

After the Hon'ble High Court of Delhi's judgement in a related matter on Insurance (Refer my blog entry titled "Extra Premium for Insurance or Reduced Insurance amount- both are discriminatory against the employees with disabilities), wherein the Hon’ble court agreed that charging extra premium from employees with disabilities was indeed a discrimination on the basis of disability and therefore it directed the postal life insurance to provide equal insurance coverage and not charge extra premium from the employees with disabilities, the regulator IRDA is working on a proposal for life to cover the persons with disabilities.

However, what I see from the proposal, certain categories of disabilities, particularly that are not static and likely to change, say for example a person with mental illness (under rehabilitation), or a person with low vision - likely to turn completely blind, will continue to face discrimination.

The problem is the actuaries are not trained in to this aspect of disability and the potential of persons with disabilities. Life can be uncertain for you and me alike irrespective of disabilities, but actuaries tend to presume that a person with disability is more likely to die in comparison to non-disabled is actually a myth.

I had indicated the road ahead in the earlier post after the Court judgement which I am reproducing here:


The Road Ahead
I see this judgment  as a milestone in the disability rights movement with far reaching implications not only in India but also beyond India and especially in European countries where the Actuaries continue to discriminate against persons with disabilities by under-valuing their lives. However, India, its Courts and the persons with disabilities are very progressive on this front and the western countries can follow suit at least on this count.
This is just a beginning. We need a well devised future strategy  to dismantle the entire regime of discrimination that is prevailing in the insurance sector and the immediate challenges are:
(a) The insurance sector still discriminates on the basis of etiology of the disability i.e. from birth and after birth; neurological or physical and rates their lives accordingly which has again no scientific base.
(b) The persons with neurological disabilities are still not allowed any insurance policy and needs to be challenged.
(c) PLI is an insurance scheme for the benefit of government employees hence it will cover a very small section of citizens with disabilities. Those who are outside the government jobs especially those in rural areas are far away from reaping the benefits of insurance.
(d) The Actuaries who are in the business of assessing the life risks are not aware of the real challenges and the lives of the persons with disabilities and they continue to live in their own world and decide on their own whims, the risk calculation of the life of a person with disabilities. They need to be sensitized and made aware.
(e) The entire literature on insurance that I had to read while pursuing this case from outside reinforced the stereotypes about persons with disability and their proneness to accident. Hence, we need new literature for future actuaries to understand that Disability can not be treated always as a negative health profile. And that living with disability was distinct from suffering from a life threatening disease.
(f) There is a need to raise awareness that a person with visual impairment or with hearing impairment or with neurological impairment also enjoys good health like anybody else.
(g) The rules of Insurance sector needs to be changed in light of this judgement and applied across the sector. All insurance  issuing companies - be it private or government have to factor in the principals of this judgement and make amends.
(h) We need to take this awareness to the most marginalized persons with disabilities in rural areas through several means. 

I am sure we all are up for it and would take this to its logical end. Here is  news coverage regarding the IRDA proposal from Business Standard:-

Currently, there are no definitive guidelines defining the cover for people with disability
M Saraswathy  |  Mumbai  January 4, 2014 Last Updated at 00:32 IST

Insurance Regulatory and Development Authority (Irda) is looking to bring out a proposal for providing life insurance cover for the differently abled. While disability is not explicitly excluded from life insurance policies, there are no definitive guidelines defining the cover for such individuals.

“The proposal is at a discussion stage at the actuarial department. We will soon bring out a discussion paper on this,” said a senior IRDA official. This proposal will first be presented as a paper to life insurers for their feedback and then, detailed guidelines would be formulated.

At present, disability insurance is provided under personal accident policies by general insurance companies. Here, the policy provides for income replacement if the policyholder gets physically injured in any accident leading to loss of income for the family.  Disability is also covered by life insurance companies, wherein a cover is provided for accidental disability. These products are offered both, as a policy and as a rider with an insurance plan. If anything happens to the insured during the policy tenure, the insurance company pays him/her a lump-sum amount. However, this does not provide any protection for disabilities existing from one's birth or early childhood.

Insurance sector officials said that there, the regulator would clearly define what is disability, the types of disability-permanent or ongoing. The various ailments are also expected to be classified either as static and permanent, which would include polio and physical disability like loss of sight at birth, loss of hand/leg at birth among others. Other types of ongoing ailments like severe Hepatitis B, cancer of the last stages and severe damage to the lungs or heart would be put into a separate category.

“While permanent and static disability is expected to be included as the category that would be covered by life insurance, progressive and critical stages of ailments are likely to be excluded from coverage. This is because such ailments are very risky to be covered, from an insurance perspective,” said a senior life insurance official.

Officials close to this development said that at a future stage, when there is adequate data and research on these ailments, such patients could be provided life insurance cover, albeit at a higher premium.

Not all types of cancer are excluded from life insurance coverage. While patients in the last stages of such life-threatening diseases are excluded from life insurance coverage, others at an early stage are not denied a cover. These patients usually pay 30-40 per cent higher premium than regular policyholders, due to the higher risk involved in their coverage.  
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Friday, November 16, 2012

Special Financial Planning for your child with disability

Hi,

I came across this informative peace, though not complete in many respects. This is based on the information and law that exist today and doesn't suggest or foresee the circumstances in the coming days looking at the major developments in the sector, particularly, the Delhi High Court ruling that calls for equal benefits in Post Life insurance to the disabled employees; the UN Convention on the Rights of Persons with Disabilities; the Rights of Persons with Disabilities Bill 2012 awaiting introduction in the parliament and the supported decision making in place of full /limited guardianship. Nevertheless, this may help many. Here it goes.

A differently abled child needs special financial planning for a secure future

Vidyalaxmi, ET Bureau | Nov 14, 2012, 09.08 AM IST

NEW DELHI: Every child is special; and differently abled children are even more special. In normal circumstances, the biggest worry for most parents is high education expenses. However, in case of special children, the worries extend beyond that. Parents of such children have to plan for extra medical expenses and for expenses much beyond college. In some cases, even for their lifetime. The parents also need to put in place a system where there is someone who takes care of the child when they are no more and the benefits should keep coming to the child.

"When it comes to a special child, financial planning involves two stages. The first stage is financially providing for the life during the parents' lifetime. In the second stage, one has to build a mechanism through which the child continues to meet his/her financial needs after the parent's lifetime," says Mukund Seshadri, certified financial planner & partner, MS Ventures Financial Planners. On children's day, it is time to make a beginning and build a meaningful corpus for your special child. One can consider the following points while drawing up a financial plan.

Legal guardian after 18 years

In a regular case, parents' responsibility could be for a limited period. However, in case of a special child, the timeframe could depend on the severity of disability. In some cases it could extend for a very long time. "These children go to special school and could need extra health care expenses. You are natural guardian to your children only until they are 18 years; but once their status changes from 'minor' to 'major', you need to take legal guardianship from court for your special child," says Pankaj Mathpal, certified financial planner and managing director, Optima Money Managers. "Parents can take the legal guardianship themselves or appoint a sibling or somebody else as guardian to the child."

Allocate more to equities

"In case of a special child, you may have to provide for income for the entire life. This is very difficult to calculate," says Kartik Jhaveri, certified financial planner, Transcend India. Even if the child could eventually generate income based on his abilities and skill sets, retirement planning should be done in a manner that the child has sufficient means of income through alternative sources. The investment plan will vary from family to family based on their financial realities. Asset allocation is the key and knowing the kind of corpus and returns that you would need for your goals is paramount, according to experts. "As a general rule, a portion of the portfolio should be allocated to equities and this portion could be higher considering the time horizon in such cases (for retirement goal: parents as well as child's ) is more than 30-plus years. Parents should also have exposure to real estate (not as an investment, but as a residence), which can come in handy to the child," Jhaveri adds.

Buy a high sum assured term plan

This is a must, especially for parents who don't hold any assets. "Parents should consider buying a high sum assured term plan, which will factor in the uncertainty risk if something were to happen to the parents. Today' term plans are very reasonably priced and affordable," says Seshadri. "Parents should choose the child as a beneficiary and can nominate some trustworthy individual to ensure that the beneficiary gets his/her share of proceeds after the parent's death."

Create a trust

Another way is to create a non-revocable trust and appointing trusties. Creating a trust comes with its own set of challenges such as setting up the trust, registering a PAN Card, defining the functions of the trust, choosing the trustees etc. You can form a trust any time. The first step is to frame a trust deed with legal help. The trust deed defines the objective of the trust, includes the names of trustee members, powers and rules and regulations pertaining to its functioning. The key is to appoint trustee members who are younger to the parents.

This may take care of the possibility of the trustee's death before the parents'. "Closest family members are the preferred choice for trustees. In absence of that, you can take help of some NGOs or The National Trust," says Mathpal. The National Trust is an autonomous organisation of the ministry of social justice and empowerment, Government of India, set up under the National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act (Act 44 of 1999). If you plan to set up a trust, financial advisors expect the initial costs to be around Rs 30,000 in metros and Rs 20,000 in smaller towns. "If parents have a trustworthy relative in a sibling or an uncle/aunt, it is any day easier to create a will. The process of setting up a will and its execution is far simpler and affordable for most individuals," says Seshadri.