Dissecting The 4X Multiplier Benefit Offered By Royal Sundaram Multiplier Plan

A health insurance plan is your most important defence against any unexpected medical bills that may come up in the future, just like how a suit of armour shields a knight in battle. And, one of the most important component of health insurance is the sum insured i.e. the maximum amount your insurer will pay for medical expenses as per the policy conditions in a policy year. 

The sum insured usually works on an indemnity basis, which means your health insurance compensates your ‘actually incurred’ medical expenses. Say you have a health insurance policy with a sum insured of Rs 5 lakhs. And, your treatment costs Rs 3 Lakhs. You will be paid Rs 3 Lakhs (considering the policy T&Cs) and not the entire Rs 5 Lakhs. The remaining Rs 2 Lakhs will be available for the rest of the policy year. But, if your hospitalisation expenses go over the specified sum insured, you will be responsible for the rest.

With medical inflation and costs rising exponentially, it is important to ensure that you have an adequate sum insured that covers all possible scenarios. It is essential to assess your healthcare requirements thoroughly and understand the coverage you need before purchasing a health insurance policy, so you don’t face any financial strain in case of a medical treatment.

It's possible, however, that even this adequate sum insured wouldn't help in case of a life-threatening condition. Such conditions may require immediate medical intervention often involving expensive treatments - which could sometimes go beyond your sum insured and dip into your savings. 

This is where the Multiplier Benefit comes in. But, ye hota kya hain? 🤔

The 4X Multiplier Benefit offered by Royal Sundaram Multiplier Plan is a game changer. If you are diagnosed with a life-threatening condition, an extra amount equivalent to 4 times your sum insured plus no claim bonus (if any) will be available to you for inpatient claims during a policy year - giving you unrivalled financial protection and peace of mind.

The Multiplier Benefit comes with certain conditions -

👉You can use this benefit only 4 times throughout your or your policy's lifetime. Therefore, it's important to use it wisely and thoughtfully. 

👉 Moreover, it is essential to remember that these benefits must be used judiciously as they can only be accessed after the initial sum insured and no claim bonus is used up.

👉 If your Multiplier Benefit is unused, whether wholly or partially, you won't be able to carry it over to the next policy year.  

👉 If you're hospitalised continuously from one policy year to another, the multiplier sum insured will apply for the entire duration of your hospital stay.  

👉 Once activated, the 4X Multiplier Benefit will be available only for admissible claims arising from life-threatening conditions in the same policy year.

👉 The life-threatening condition should be certified by a qualified doctor and clearly stated in the admission summary, case summary, or pre-authorization form.

👉 When it comes to floater policies, the 4X Multiplier Benefit will be available for all the family members covered under the policy as per the aforementioned conditions. This means that the entire family can benefit from it, adding a unique layer of financial security to your overall coverage.

But, what if you don’t make any claims under your health insurance plan? What happens then?

Did you know Royal Sundaram’s Multiplier Plan is also the first plan in India that lets you multiply your sum insured by 11X if you’ve made no claims for 5 years? Meaning if you don't make a claim for a period of 5 years, the total sum insured available under the plan will be 11 times the base sum insured - over the long term.

Which will look something like this -

🤔 But, why 11X? How is it calculated?

Let’s look at an example to understand this better. Say you buy the plan with a base sum insured of Rs 10 lakhs in the year 2022 and you don’t make a claim for 5 years. You will get a no claim bonus of Rs 10 lakhs and a Flexi Reload insured of Rs 10 lakhs. 

Note: Flexi Reload is the restoration benefit under the Royal Sundaram’s Multiplier Plan. Under the Flexi Reload Benefit, if your sum insured and any NCB is used up, the insurer will restore the same without any extra costs. 

So - 

Sum insured = 10 lakhs

No claim bonus (if no claim has been made for 5 years) = 10 lakhs

Flexi Reload = 10 lakhs

Now, the 4X Multiplier benefit comes into play if you’re diagnosed with a life threatening condition.

• 4X Benefit for the initial sum insured = 10,00,000 x 4 = 40 lakhs
• 4X Benefit for no claim bonus = 10,00,000 x 4  = 40 lakhs

Now you need to simply add everything together!

Multiplier Benefit = Initial sum insured + No claim bonus + Flexi Reload Benefit + 4X Benefit for the initial sum insured + 4X Benefit for No claim bonus                            

= 10 lakhs + 10 lakhs + 10 lakhs + 40 lakhs + 40 lakhs

 = Rs 1.1 crore

Therefore, in case you haven’t made any claims for 5 years and are diagnosed with a life-threatening condition, this plan delivers a sum insured of Rs 1.1 crores which is 11 times of the base sum insured.

Bur, like yin and yang – for every light, there is a shadow; for every up, there is a down.

Even though the 4X Multiplier Benefit sounds like a great deal, here are some drawbacks that you should be aware of - 

1️⃣ You Get The Benefit Only In Case Of Life-Threatening Conditions 

The 4X multiplier benefit will apply only if you are diagnosed with a life-threatening condition. So, you will be able to claim only up to your sum insured or the specified limit for any other type of hospitalisation or treatment, depending on the plan’s T&Cs. 

2️⃣ Premium Hikes Can Happen

It is true that this plan offers the best value for the price compared to other top plans on the market. For instance, say you buy this plan for your family of 3 – yourself (30), your spouse (30), and your kid (1). In this case, it'll only cost you Rs 15,243*.

But, but, but! Health insurance isn't a fixed-price product. Despite the strong value proposition of this plan, it is important to consider that health insurance products can have their rates increased unpredictably if insurers no longer find them profitable. In the last few years, they have raised rates by 15-30% without such innovative features. This means it's impossible to predict what the premium will be for products like these with such features in the future. Therefore, it is important to stay informed about industry trends and any potential changes in pricing that may affect the value of the plan.

*Note: Premium is inclusive of taxes and is taken on 20.07.2023 and is for people residing in Zone 1.

3️⃣ The Benefit Can Be Removed At Any Time

According to IRDAI regulations, insurers can withdraw a product or a product feature anytime based on their internal policies and approval from internal product committees. This allows insurers to be more agile in terms of keeping up with the changing market dynamics and demands. Hence, please note that the coveted benefits and features may disappear along with the product you have purchased. You can then be pushed to move to another product that doesn't have this feature.

The benefits and features may look enticing today but carry the potential to leave you with more out-of-pocket expenses. So, ensure you prioritise the ‘core coverage’ of your health insurance plan. It should include an adequate sum insured, low/no financial limits on room charges, specific treatments, daycare, organ donation and modern treatments. It's like buying a home - sure, the cool amenities like a modern kitchen or home theatre system can be appealing, but if the foundation and core structure of the house aren't sound, the overall value and longevity of the house will be diminished.

It's important to remember that these features should be viewed only as a bonus - as they can be revoked at any time. They can also come with a huge price in the long run. So ask yourself, is the reward worth the risk?

If you have any further questions, you can post them on the Beshak Insurance Forum and get answers from insurance experts!