Good health is the basis of all happiness in life. If you remain healthy all things in life can follow and be taken up smoothly. A person’s health is the only real asset that he/she can count on. Most of us lead very hectic lives, trying to juggle between work and home. All the stress, travelling, long hours and irregular eating habits make our lifestyle very susceptible to illnesses.

The 21st century is a fast-paced one where there is little time to exercise and this is further complicated by factors such as pollution and stress. No wonder the number of people suffering from health problems is on the rise. Healthcare has also become very expensive and as such, it becomes difficult to bear the increasing costs if you are hit by an illness, which requires attention other than that of your general physician.

All these factors combined make it important to procure a health insurance plan and maintain it regularly. In the absence of an appropriate health insurance, being sick or meeting with an accident can cause considerable financial trouble. Hospitals providing the latest medical facilities and state-of-the-art infrastructure charge exorbitant rates.

Health insurance is the only tool that can help at large in such circumstances. It may seem like an expense today, but it helps in protecting against a future expenditure that may be considerably higher and uncalled for. A medical insurance or health insurance policy is a way to safeguard your health from the impact of illnesses as it helps reduce the financial impact as well as the mental pressure associated with an illness.

“Health insurance in India is normally a comprehensive health cover, covering nearly all illnesses and injuries requiring minimum 24 hours of hospitalisation. A typical health insurance policy does not cover any medical expenses that are routine in nature or for convenience like routine health check-ups, cosmetic surgery, plastic surgery, aesthetic treatment and so on. There is a certain waiting period with regards to pre-existing diseases (PEDs) or some named illnesses like cataract or hysterectomy for a defined period of two years to four years,” says Kamal Gupta, an insurance agent.

The Perfect Health Plan
Many a people believe that a good healthcare plan should pay for necessary care without leaving you with lots of debt or high out-of-pocket costs. Health insurance is supposed to protect you in case of a catastrophically expensive illness and not simply cover your routine costs as a generally healthy person. And many individual plans do not come close to the objective. So while opting for a health plan, keep in mind the following:

• Ensure that the medical expenses incurred on hospitalisation for more than 24 hours are covered by the insurance company.

• If you have a cashless policy, the hospitalisation expenses are directly settled between the hospital and the insurance company.

• An insured person can receive a tax exemption on the premium paid, up to a significant amount each financial year. This means that while you are safeguarding yourself, you are also reducing your tax burden and saving money.

• Try to insure yourself for treatments received prior to hospitalisation and during the recovery period.

• Go for a floater plan which covers the entire family under one policy and allows the coverage of the medical insurance policy to be shared among the family members.

“In an ideal case, an individual may need a health cover of Rs 3-5 lakh and thus a floater plan of Rs 10-15 lakh for a family of 3-4 should suffice. It is indeed not at all advisable to even go for a larger plan, say a cover of Rs 20 lakhs or more. You would be paying a very high premium for a higher medical insurance policy that could instead be used for building a corpus,” says a financial planner.

Various Options Available
As soon as you decide to buy health insurance, the next step is to finalise what exactly you want to buy, and from whom. As of now the various options available for a common man include the following:

Individual Health Plan (IHP)
These are the so-called ‘traditional’ health insurance covers, commonly known as ‘mediclaim’ policies. They mainly cover hospitalisation expenses, provided it is for at least 24 hours. The expenses for hospital bed, nursing, surgeon’s fees, consultant’s fees, cost of blood, oxygen and operation theatre charges are the usual inclusions in this plan. However, unlike the past, most plans now come with sub-limits for each of these heads. They usually do not cover pre-existing diseases or complications arising from them for the first four years of the policy.

Family Floaters (FF)
These can be seen as a next step of the IHPs for a family. The benefits remain largely the same, but the sum insured can be availed by any or all members of the family and not a single person. A FF can be bought by an individual who becomes the proposer along with spouse, dependent children of up to 25 years of age or even unmarried, divorced, widowed daughter and dependent parents. Even a parent-in-law can be covered.[PAGE BREAK]

Critical Illness Plan (CIP)
This plan provides financial assistance if the insured develops a serious ailment such as cancer or has a stroke. Each cover has a list of ailments, usually 9-12 of them. One can get it in the form of a rider attached to a life insurance cover, or as a stand-alone policy from either a life insurer or a non-life insurer. If critical illness occurs, it pays the entire sum insured and the policy terminates. This can happen only once for any particular illness. To get the payout, the insured has to survive for 30 successive days after the diagnosis. No claim can be made during the first 90 days of the inception of the policy.

Senior Citizens Health Plan (SCHP)
Since most of the IHPs cap the entry age at around 60 years, SCHPs are generally for the age group of 60-80 years. Many of them can be renewed for life or up to the age of 90, and have a fixed coverage of, say, Rs 1 lakh or Rs 2 lakh.

Daily Hospital Cash (DHC)
This should be the last option when buying health plans. Most hospital cash plans might also inconvenience you as they offer the benefit after discharge from the hospital, and only after the policyholder produces proof of the number of days he/she stayed there. Hospital cash benefit has a pre-defined limit in most cases, say Rs 500 per day for up to 50 days in a year and up to 250 days during the entire term.

Unit-Linked Health Plans (ULHP)
These are mostly defined benefit plans—usually for the long term—and unlike a standard health insurance policy the payout is not dependent on the costs actually incurred. Although these policies are being sold by life insurers, they may not cover life risk. Out of the premium one pays, a portion goes towards medical coverage and the rest of the premium is invested in a fund that operates like a mutual fund.

Covers From Life Insurers
Life insurance companies too have started offering health plans. Most of these are, however, defined benefit plans—the pre-specified amount which is the sum insured is paid as compensation, irrespective of the actual amount of expenses incurred. Also, these are long-term, having a fixed premium for, say, three, five, or even ten years.[PAGE BREAK]

Costs Covered Under Health Insurance
A typical health insurance policy covers the basic costs in case of hospitalisation due to any accidents/diseases, which does not form a part of the permanent exclusions of the policy under which an individual is covered. The expenses covered include cost of room, boarding expenses as provided by the hospital, nursing expenses, doctor’s fees, operation theatre charges, expenses related to surgical appliances, etc. As a part of the standard plan, coverage for pre and post-hospitalisation expenses and specified day-care procedures are also offered. However, the coverage may vary from product to product and insurer to insurer.

With the increasing awareness of health insurance, some insurers have launched products to cover the Out Patient Department (OPD) treatment as well. Apollo Munich has launched Maxima which covers OPD treatment expenses like OPD doctor consultations, pharmacy bills, diagnostic tests, dental treatment, optical services and annual health check-up costs along with in-patient treatment. Critical illness riders are available as add-ons to health insurance policies and these cover treatment for diseases, such as cancer, strokes, kidney failure and heart attacks.

Be Careful
It is always advisable to provide correct information to your insurer otherwise your claims could be rejected. Hence a buyer before applying for a health insurance policy must keep in mind these factors:

• Keep the insurance company informed. Limited information including illness and policy number is sufficient

• Give the correct papers when making a claim in a proper file. Keep in order the following: a) Covering letter, original claim form and copy of the policy, b) Note from the concerned doctor describing the illness and the recommended treatment, c) Original prescriptions from the doctor for medical tests (investigation) and medicines and original medical test (investigation) reports, d) List of the bills and the amounts, e) Doctor’s and medical test bills, f) Hospital or nursing home bills, g) Medicine bills, h) Hospital bills and i) Original discharge card.

• Get an acknowledgement of receipt of the claim before submitting the file and retain a photocopy of the complete set of documents submitted to the insurance company

• Keep the number of the third-party administrator and your insurer ready if you have a cashless policy. Try to inform them around 48 hours before the admission in general and 24 hours if it is an emergency.

• Spell the name correctly. The patient’s and his or her doctor’s name should be spelled correctly, wherever required.