Here’s how scores will be calculated in the new color-coded wellbeing insurance strategies

a close up of text on a white background: Explained: Here’s how scores will be calculated in the new colour-coded health insurance plans

© M Saraswathy
Spelled out: Here’s how scores will be calculated in the new colour-coded well being insurance policy ideas

Wellbeing insurance policies procedures will soon have a colour-coding system of environmentally friendly, orange or purple to display whether or not a products is straightforward, moderate or advanced.

Insurance coverage Regulatory and Improvement Authority of India (IRDAI) has stated that a score will be assigned to each and every merchandise, based on the product or service features and the type of covers. For clients, this is intended to reflect no matter if the merchandise is straightforward or complicate to fully grasp. 

Eco-friendly is a color which all health and fitness insurers will desire to get as this indicates that the item is basic. 

Factors like variety of optional covers, percentage of co-pay back, ready period of time, long term exclusions, variety of treatment plans included, and simplicity of conditions will be considered for choosing on a score for the products.

Moneycontrol gives you a glimpse of how the colour code will get the job done.

Scores and their relation to color coding

Products and solutions with a rating of 2 or less will be categorised inexperienced, extra than 2 and a lot less than 4 will be orange, while people earlier mentioned 4 and up to 6 will be pink.

7 parameters will be deemed. They include things like the quantity of optional handles available, waiting period of time, percentage of co-spend, number of therapies exactly where sub-limitations are applicable, deductibles, selection of lasting exclusions and simplicity of conditions.

All the seven parameters will be specified an equal weightage of 14.28 %.

Optional covers and co-fork out

A rating of .6 will be given for just about every one particular optional address in the product. If a overall health coverage item has 5 optional addresses, the score of the merchandise on this parameter will be 3.

When it arrives to co-fork out, a score of .3 is given for each individual 1 percent increase further than the 5 per cent co-shell out. If a well being solution has two solutions — of 10 percent and 20 per cent co-spend — the regular co-fork out will be 15 percent.

Co-shell out in health Coverage refers to the proportion of the declare quantity that has to be borne by the policyholder. If the co-shell out is 10 percent, the insurance plan company will spend 90 % of the declare.

Waiting period and sub-limit

A rating of .15 is given for just about every a person thirty day period of waiting period of time. For case in point, if the highest waiting around period in a overall health item is 18 months, the rating will be 2.7. Waiting around period is the interval in which statements for pre-current ailments will not be paid out.

A score of .6 is specified for just about every a single ailment put below the sub-limit. In situation of many choices, the maximum co-shell out provided will be viewed as. For instance, if a health and fitness product has 6 illnesses under sub-limits, the rating will be 3.6.


Deductible is the amount of money a policy holder has to pay back right before the insurance policy company begins spending up. For example, if the deductible in a health insurance policy is Rs 20,000 and the mediclaim is Rs 40,000, the insurance enterprise is liable to pay back only Rs 20,000.

IRDAI has claimed that a rating of .3 is presented for every single 1 percent of deductible in the policy. If a overall health coverage has a deductible of 10 percent, the score will be 3.

Likewise, when it will come to permanent exclusions or ailments/therapies for which insurers will not pay back, a rating of .6 will be offered for each lasting exclusion. If a overall health plan has 5 lasting exclusions, the score for this parameter will be 3.

Regular conditions and definitions

IRDAI experienced previously notified the regular definitions, typical conditions, and exclusions in wellness insurance policies policies. A rating of .1 is offered for each definition, normal clause and exclusion, which differ from standard definitions.

For instance, if there are 20 definitions, 20 clauses and 5 exclusions in the products, which are other than regular ones, the rating will be 4.5.

The weighted normal scores of all the seven parameters are then additional alongside one another to get the remaining score of the merchandise.

IRDAI has questioned stakeholders to present their views on this colour-coding process by Oct 15.