HDFC Ergo Withdraws Three Health Insurance Plans

HDFC ERGO used to provide four options for the "My:Health Suraksha" health insurance policy. Among these, Koti Suraksha remains unchanged by this recent change. Those with discontinued plans will be shifted to alternative policies provided by the insurer.

HDFC ERGO stated its commitment to offering a variety of options to cater to different customer needs. In accordance with guidelines set by the Insurance Regulatory and Development Authority of India (IRDAI), the insurer will provide alternative plans, such as Optima Secure and Arogya Sanjeevani, to all existing policyholders, including senior citizens, as per its underwriting guidelines.

Moreover, the company has detailed the features of Optima Restore, the policy that will replace the current plan for existing "My:Health Suraksha" policyholders. Optima Restore boasts benefits such as no sub-limit on room rent, a restore benefit that adds 100% of the basic sum insured upon full or partial utilisation, a 2x multiplier benefit that doubles coverage after two claim-free years, and a protector rider add-on that covers non-payable expenses up to the sum insured for an additional premium.

[Also Read: A Comprehensive Guide to Buy a Health Insurance Policy in India]

Do Existing Policyholders Need to Worry?

HDFC ERGO is pulling the plug on its "My:Health Suraksha" health insurance plans, impacting policyholders. However, existing policyholders of these three "My:Health Suraksha" plans need not worry immediately. HDFC ERGO assures that the health coverage provided by these plans will remain active until their respective renewal dates.

The insurer has recommended that customers with "My:Health Suraksha" insurance policies due for renewal on or after August 07, 2024, transition to HDFC Ergo Optima Restore. Any accumulated bonus from the discontinued policies will remain valid upon renewal with Optima Restore. Additionally, policyholders will receive continuity benefits when transitioning to the new health insurance policy.

Since both products are under HDFC Ergo, customers migrating will retain access to the same network of hospitals specified in their original policy. The variances will mainly pertain to the features of the two plans.

[Also Read: Health Insurance on a Budget: Maximising Coverage and Minimising Costs]

Will There Be an Increase in Health Insurance Premiums for Those Transitioning to Optima Restore?

Customers holding "My:Health Suraksha" health insurance plans are curious about potential premium changes with the shift. In terms of features, "My:Health Suraksha" Silver and Gold plans mirror the Optima Restore policy. Therefore, policyholders won't see significant impacts from the transition. However, "My:Health Suraksha" plans offer certain additional benefits. Furthermore, the "My:Health Suraksha" Platinum Smart plan provides a no-claim bonus of up to 200% of the sum insured. These factors are likely to influence policyholders.

It is advisable that if a policyholder desires a higher no-claim bonus, they should consider transferring the policy at least 45 days before the renewal date. Customers should carefully compare the features and premiums of their "My:Health Suraksha" health insurance plans with the Optima Restore policy before making a decision. They also have the option to switch to other health insurance policies offered by HDFC Ergo or any other health insurer.

It is important to note that customers must apply for portability at least 45 days before the policy expires. The waiting period, pre-existing disease cover, and other benefits in the old policy will be transferred to the new policy.

Why Did HDFC Ergo Discontinue the "My:Health Suraksha" Variants?

The insurer has not officially stated the rationale behind this decision. However, it is possible that HDFC Ergo aims to streamline its product line-up, especially where there are overlaps in features.

Additionally, recent regulatory changes by IRDAI may have hastened the process of rationalising its product portfolio to enhance efficiency by eliminating redundancy.

[Also Read: How to Port Your Health Insurance Policy]

Does It Mean There Is an Underlying Issue with the Insurer?

No, the discontinuation of products does not suggest that there is a problem with HDFC Ergo per se. Rather, it indicates that the company is making strategic decisions to optimise its product offerings and ensure efficiency in line with regulatory changes and business goals. It is a common practice for companies to review and adjust their product portfolios over time to adapt to market dynamics and regulatory requirements.

[Also Read: 12 Tips to Buy the Right Health Insurance Plan]

To conclude:

HDFC Ergo's withdrawal of "My:Health Suraksha" plan reflects strategic adjustments, aimed at streamlining product offerings and complying with regulatory changes. While the reasons behind the move were not officially disclosed, industry experts suggest it is part of a broader initiative to enhance operational efficiency and eliminate redundancy.

Despite concerns about potential premium changes and loss of certain benefits, policyholders are encouraged to carefully assess alternative options like Optima Restore and consider portability well in advance. Overall, the insurer's actions align with industry trends and underline a commitment to delivering competitive and sustainable health insurance solutions.

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DIVYA GROVER is the co-editor for FundSelect, the flagship research service of PersonalFN. She is also the co-editor of DebtSelect. Divya is an avid reader which helps her in analysing industry trends and producing insightful articles for PersonalFN’s popular newsletter – Daily Wealth letter, read by over 1.5 lakh subscribers.
Divya joined PersonalFN in 2019 and has since then used stringent quantitative and qualitative parameters to analyse funds to provide honest and unbiased research to investors. She endeavours to enable investors to make an informed investment decision and thereby safeguard their wealth.

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