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A comprehensive health plan that covers a host of ailments or a plan tailor-made for a specific disease? With health insurance companies offering niche covers for a host of diseases like cancer, diabetes, hypertension and most recently dengue, the question now is what exactly one should opt for and whether disease-specific covers make sense.

According to Antony Jacob, CEO, Apollo Munich Health Insurance, customer needs have evolved. There is an increased interest in benefits customised to his or her needs in addition to the basic covers.

Hence, you have Apollo Munich offering niche plans like Dengue Care, Energy to cover diabetes and hypertension and Maxima to insure outpatient treatment. Star Health and Allied Insurance has been offering niche plans for heart related disease (Cardiac Care) and diabetes (Diabetes Safe) for some time.

Cancer Care by HDFC Life and iCancer from Aegon Religare Life Insurance are the other niche products in the market.

Advantage niche plans

Some niche plans, especially those for critical diseases like cancer, are a better option than stand alone critical illness policies.

"The main advantage of niche plans is that they provide coverage for the disease at all stages—early or advanced—unlike critical illness plans. Critical illness plans cover only late stage cancer," says K.S. Gopalakrishnan, MD & CEO of Aegon Religare Life Insurance. Also, a regular critical ailment plan provides a lump sum benefit. It does not waive off future premiums like some cancer-specific covers in the market do.

How do niche covers compare with comprehensive health plans that covers all kinds of ailments? Says Sujoy Manna, Vice-president-Products, HDFC Life, "Usually individuals buy a comprehensive policy of Rs 2-3 lakh. This amount is insufficient for treatment of major critical illnesses, especially in the metros." However, those with a comprehensive health policy of Rs 10 la lakh or more may not need extra cover. Those who do not have a higher sum assured under a comprehensive plan, can increase their coverage through a top-up policy.

The reason for considering a top up is that it insures you for way more ailments than a specialised plan at nearly the same cost.

Cost factor

Typically for a healthy 35-year-old, a top-up health plans will cost around Rs 1,000 per Rs 1 lakh.

Niche plans from health insurers are expensive compared to comprehensive health plans. Star Health and Allied Insurance’s Cardiac Care policy can cost Rs 29,000 for a Rs 3 lakh annually renewable policy. Similarly, the insurer’s policy for diabetes will cost nearly Rs 9,000 and Apollo Munich’s Diabetes plan will cost around Rs 10,000 a year.

As against this, a comprehensive health plan covering more number of ailments will cost Rs 3,000-6,000 for a Rs 3 lakh cover. Even critical illness plans will work out cheaper.

However, specialised plans cost much less for a higher sum assured as they are longer term policies. The minimum policy term for these plans is 10 years. HDFC Life’s Cancer Care will cost Rs 750-1,500 for a Rs 10 lakh policy for 10 years and Aegon Religare’s iCancer will cost Rs 2,700 for a similar policy. In comparison to these, comprehensive and critical illness plans will be costly (see table).

Do you need it?

Jacob says every person should hold a basic indemnity health policy that addresses one’s health status and lifestyle, but there is also need to consider additional covers for specific concerns. In case diabetes or hypertension runs in your family and there is a strong tendency to inherit such a disease, then a person should purchase a niche policy to stave off high medical expenses, he says.

Niche plans should also be considered by those who seek a basic health insurance policy, but hesitate to purchase a full-fledged policy. Salaried individuals who have a basic cover from their employers could consider enhancing their health coverage through niche plans.

But at the time of switching jobs they will have very limited insurance.