Buying The Right Health Insurance Cover
With the human race now susceptible to an extraordinary wide range of ailments and the fact that healthcare-related expenditure could wipe out your entire life-savings, it is of paramount need to opt for a health insurance policy. But from the surfeit of various policies, each with its own fine print, which is the one that you should opt for? The following article provides some tips
The current pandemic has made one thing clear – the importance of health insurance. Anecdotal evidence suggests that treatment of corona virus has cost many people their life-savings. It has been observed that rising inflation has also led to a spike in the cost of quality preventive healthcare and medical treatment. In order to effectively deal with this issue, a large number of average middle-class families are in search of affordable solutions. Today, treatment for even a minor health issue may drain off your financial savings to a great extent.
A one-stop-solution to such problems is to have in place a comprehensive health insurance policy. Even financial planners around the world prefer having life and health insurance first before even thinking of investing in other options. Also, with the emergence of unexpected diseases such as corona virus leading to rise in uncertainty, it’s high time that people realise the significance of having a proper health insurance cover.
A health insurance plan covers you and your family against substantial medical expenses that may incur due to hospitalisation. Despite the several advantages of having health insurance, people ignore it. Many a times they believe that the health cover that their employer provides is enough for them. However, how many of them actually go and ask their HR head to provide details about the health cover provided? Do they even check if it is adequate to offer protection against some unknown diseases or even take care of major surgeries?
At times there might be a situation when the employerprovided health cover doesn’t cover a lot of things which you would otherwise get from available health plans in the market. Also, once you change the employer you are no longer covered with that particular health policy. Hence, it is always recommended to have a health insurance cover in spite of your employer’s health plan in place. That being said, choosing an appropriate health plan is really important. Hence, before understanding how to choose the right health cover for your own self and family, we need to understand the different types of health policies available in the market.
Individual Cover
Individual covers are the traditional health insurance covers. These are similar to the mediclaim policies. Generally, such policies cover treatment expenses as long as the treatment is on in-patient basis and lasts for at least 24 hours. These policies cover expenses such as room rent, operation theatre charges, nursing, surgeon’s fees, doctor’s consulting fees, blood transfusions and oxygen. However, one needs to look out for any sub-limits as these days most plans have it for each of these heads. Usually they do not cover pre-existing diseases for the first three to four years from the commencement of the policy. Also, initially specific conditions may not be covered for a certain period. However, you might be eligible for a ‘no claim bonus’ (NCB) for every claim-free year.
Family Floating Policies
As the name advocates, this policy is for your family and entails shared individual health plans. This means that from a single sum assured your family members proposed in the policy can get the benefits of health insurance. Although the benefits are similar to those of individual plans, the sum insured can be used for the treatment of any member of the family and not just a single person. Say if you are buying health cover of `2 lakhs for each member of your family of four members, you would be spending for a total cover of `8 lakhs. On the contrary, if you buy a family floater policy of `8 lakhs cover, each person covered under the policy would be able to avail the benefit up to `8 lakhs as compared to `2 lakhs in the individual policy. Further, the premium works out to be lower than individual policies.
Critical Illness Plan
Though this is not a policy that can replace the need of having an individual or family health plan, yet it can be added as a rider. Many health insurance companies also provide this as a separate policy. A critical illness plan covers the insured of serious ailments such as cancer, stroke, etc. If critical illness occurs, the insurer pays the entire sum insured and terminates the policy. This can happen only once for any particular illness. However, to be eligible for the claim, the insured has to survive for 30 successive days post diagnosis. Even for the first 90 days from the inception of the policy, no claims can be made. But both these conditions may differ from insurer to insurer.
Top-Up Health Insurance
Top-up health plans are relatively cheap to buy and come with a mandatory deductible. Deductible is the initial amount which needs to be met either from your own pocket or via any other health insurance policy. Deductible is necessary to avail the benefit of a top-up plan.
There are some factors to look for before zeroing in on the right health plan:
Kind of Plans
There are broadly two kinds of health insurance plans, indemnity plans and defined-benefit plans. Indemnity plans are those that reimburse the hospital expense and definedbenefit plans are those that pay a lump sum amount irrespective of the actual hospital expense. The indemnity plan could be an individual health insurance or a family floater policy. And one should consider having this in their insurance portfolio.
Indemnity Cover
Further, you should understand which indemnity cover would suit your requirements. An unmarried individual seeking a health cover can opt for individual health cover. And for those who are married and have children, it would be wiser to consider a family floater plan. Remember not to add your parents in your family floater policy as it considers the elder member’s age to calculate the premium. Rather, buy an individual policy for them and also consider building a health corpus for them. This is because when they grow older, the premium charged would be at the higher end.
Cover Requirement
There is no thumb rule on how much health cover you need. This would ideally depend on various factors such as income, residing city, family illness history, etc. For instance, a person living in a Class A metro city may require a policy of `10 lakhs on account of the high cost of living. Not just standard of living but even the medical treatment in metro cities is on the higher end. However, for a person residing in Class B and Class C cities, individual cover of `5 lakhs may be enough.
Sub-Limits
These days most of the health plans have sub-limits attached to them. Sub-limit is nothing but capping the limit of reimbursement under some of the cost heads. For instance, the room rent is capped at 1 per cent of the sum insured. This means that regardless of the total sum insured under this policy, one has to pay the hospital bills from one’s own pocket till it doesn’t cross the imposed sub-limit. Not all health plans have such sub-limits, but there are a few health plans that offer an option to add sub-limits while buying the plan.
Therefore, do check whether your plan has the imposition of any such sub-limits. Frankly speaking, opting for plans not having any sub-limits is ideal even if they charge you high premium. But do check details about the claims settled before opting for this cover.
Pre-Existing Diseases
A majority of the health policies cover pre-existing diseases, but only after a period of 48 months. However, there are some that cover them after 36 months or even less than that. Therefore, while buying a policy it is vital to disclose any pre-existing ailments. This will ensure a smooth claim settlement process. Further, there are certain defined ailments having a waiting period of 12-24 months, post which claims can be made for such ailments.
Co-Payment
Though you may not find the co-payment clause in all the plans, such a clause is more evident in a health insurance plan. As you grow older, the premium rates increase and in such a situation co-payment may act as relief in terms of affordability as it will aid in keeping the premium low. If the treatment is done through a non-network hospital, some plans do ask for co-payment as high as 20 per cent.