The health insurance sector in India is witnessing rapid growth, especially post-COVID, due to heightened awareness among the general populace and double-digit medical inflation. This expanding market has attracted new players seeking to capitalize on the rising demand. One such entrant is Galaxy Health Insurance, a new company licensed by IRDAI in March 2024. It is the 7th standalone health insurance company to become operational in India. Galaxy Health has launched its first product, Galaxy Promise, with significant buzz. The policy’s unique selling points (USPs) include the “Premium Promise” feature and unlimited restoration of the sum insured. In this article, we will review the Galaxy Promise policy, analyze its features in detail.
Premium Promise: What Does It Offer?
The Galaxy Promise policy is available in three plans: Premier, Elite, and Signature. The Premium Promise feature is automatically included in the Signature Plan and is available as an add-on for the Elite Plan at an additional cost.
If you buy this policy before age 50, the premium you pay at the time of purchase of first policy will remain unchanged until age 55 or until a claim is made. It means premium will remain locked for at least up to 55 years of age or until you make a claim.
At first glance, this feature appears highly appealing. However, it comes with certain conditions, one of which is explicitly mentioned in the policy document as follows:
In the event of price change due to product revision, the premium will be charged based on the original age slab of the revised product.
Galaxy Promise – Policy terms
In simple terms, if the product is revised, the premium will be adjusted as per the revised rates for the age slab, regardless of the Premium Promise.
Challenges with Premium Lock-Ins
Unlike life insurance policies, health insurance policies are not long-term contracts with fixed premiums. Health insurance operates in a very dynamic environment where premiums are subject to revision due to regulatory guidelines, medical inflation, and other operational pressures. On average, health insurance products are revised every 3-4 years.
Key Factors Driving Premium Revisions:
- Medical Inflation: Rising healthcare costs significantly impact premiums. Medical inflation in India is in double digit.
- Regulatory Changes: For instance, IRDAI has recently reduced pre-existing disease (PED) waiting periods (from 48 months to 36 months) & moratorium period (from 8 years to 60 months). These kind of changes lead to hike in premium by insurance companies.
- High Claims Ratios: Events like COVID-19 can lead to higher claims, pushing insurers to revise premiums.
- Pressure on Margins: Increased claim incidences and declining profitability force insurers to adjust premiums.
Given these factors, a premium lock-in feature like Premium Promise offers limited assurance. Buyers should not make their purchase decision solely based on this feature. Instead, the focus should be on comprehensive coverage and overall policy benefits.
Noteworthy Features of Galaxy Promise
Among the three available plans of Galaxy Promise — Premier, Elite, and Signature — Signature Plan stands out as the most comprehensive option. For those considering this policy, a minimum sum insured of 20 lakhs is recommended to avoid sub-limits and restrictions. Additionally, opting for a three-year policy term not only provides significant discounts but also reduces the waiting period for pre-existing diseases to 25 months. Here I have reviewed on features of signature plan only.
The policy also offers a robust no-claim bonus (Cumulative Bonus) structure, allowing up to 500% of the sum insured to accumulate over time. The bonus begins with a 100% increase at the first renewal and 25% for subsequent renewals. Unlike many other policies, this bonus is not reduced at the same rate after a claim; only the utilized portion is deducted, with the remainder carried forward upon renewal.
Another standout feature is the provision for unlimited restoration of the sum insured. This benefit is triggered even after partial depletion of the insured amount, ensuring comprehensive coverage for subsequent claims, including those related to past illness, modern treatments and accidents.
The Signature Plan also addresses non-payable consumables, which typically constitute 10-15% of hospital bills and are usually borne by the policyholder in standard health insurance policies. This feature significantly reduces out-of-pocket expenses.
Policy also offer coverage for surrogacy and oocyte donors, ensuring compliance with regulatory requirements and addressing a niche yet important need.
One of the policy’s unique aspects is its incentive for voluntary organ donation. Donors are rewarded with a two-year waiver on premium payments, a progressive and commendable feature.
Policy also offers hospice care benefits of up to 5 lakhs for terminally ill patients requiring end-of-life care, a thoughtful inclusion that highlights the policy’s holistic approach to health coverage.
Caveats and Considerations
The policy is packed with all essential features and optional covers, including the Pre-existing Disease (PED) Buyback option, which can further reduce the waiting period to 24 or even 12 months. Among the three available plans, the Signature Plan offers the most comprehensive set of features.
However, for a layperson with limited knowledge of insurance and discomfort with industry jargon, understanding the policy can be overwhelming. With its three-tier structure and an abundance of features, limits, and optional covers, navigating the policy document can feel like a daunting task. Ideally, insurance companies should focus on designing health insurance products that are simple and easy to understand for the average buyer. In this regard, the policy seems to fall short, contradicting the market’s need for straightforward health insurance offerings.
The wellness program “Gala Fit – Pro Active Care” is another drawback of the policy due to its overly complicated structure, which could discourage users from utilizing its benefits. While Galaxy Health aims to go beyond traditional wellness programs, the complexity introduced may make it practically unusable for policyholders.
The Company insurance program integrates a comprehensive wellness initiative. Unlike traditional wellness programs that focus solely on exercise and regular health check-ups to earn rewards and discounts, the company program goes a step further.
Galaxy Promise- by Galaxy health insurance
The wellness program offers a premium discount of up to 20%, but the details span across seven pages in the policy document. Earning this discount through the Gala Fit – Pro Active Care program feels like a Herculean task. In contrast, other health insurance policies provide similar discounts for simple activities like daily step counts, with straightforward terms explained in just 3-4 lines. A wellness program stretched over seven pages is far from inspiring and only adds to the complexity.
Final Thoughts
The health insurance industry in India is competitive, with legacy players like Star Health, Niva Bupa, and Care dominating the market. New entrants like Galaxy Health Insurance have to launch policies with unique features to carve a niche. While the Galaxy Promise policy offers several innovative benefits like the Premium Promise and unlimited restoration, it’s essential to evaluate it holistically.
Key Takeaways of this plan are:
- Avoid being swayed by catchy phrases like Premium Promise, as it provides limited long-term assurance due to the inevitable revisions in health insurance products.
- Focus on comprehensive coverage, policy features, and the sum insured.
- Signature Plan is the most robust option among the three plans. Opt for a higher sum insured and longer policy term for better value.
If you’re considering buying this policy, it’s best to opt for the Signature Plan with a sum insured of at least 20 lakh.
