Insurers will be required to disclose to policyholders by 1 April benefit/premium illustrations for all health insurance policies issued on an individual and a floater basis, include coverages for specific age bands.
“This will bring out a clear distinction between the availability of coverage on a family floater basis and on an individual basis vis-à-vis the premium payable,” said the IRDAI in a circular dated 28 December 2020.

Mr Amit Chhabra, head of Health Insurance,, said that customers can buy either separate individual policies, or a family floater policy with a common sum insured, or a floater policy with individual sum insureds for every member. This can be complicated for buyers at times to understand and comprehend, hence to simplify this, the regulator has asked insurers to clearly call out the sum insured available to each insured covered in a policy, reported LiveMint.

Mr Chandan DS Dang, executive director of, a Delhi-based online insurance broking firm, said, “Health policies have become complicated over recent years with the addition of several benefit options, for instance, add-ons, nil claim bonuses etc. This is probably why health policies have not had a standard benefit illustration.”

The insurer will have to provide, for each health insurance product offering individual and family floater options, the benefit illustration with the indicative ages/sum insured..

According to the IRDAI circular, “Where it is not possible to present the illustration considering coverage of all the indicative ages under a single policy as per the product design, insurers shall present two separate illustrations covering as many numbers of age bands, as possible.”

The benefit illustration will help to simplify the policyholder’s understanding of the premium payable vis-a-vis the benefits. The benefits have been classified into three categories: (i) on an individual basis (covering each member of the family separately), or (ii) on an individual basis covering multiple members of the family under a single policy (where the sum insured is available for each member of the family), or (iii) on family floater basis with an overall sum insured (where only one sum insured is available for the entire family).

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