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After the outbreak of the COVID-19 pandemic, the need to have a health insurance policy has certainly gone up. Going by the reports in the media, the cost incurred during hospitalization for the treatment of Corona virus can run into several lakhs. This has led people to buy health insurance plans and those who already had one, have enhanced their coverage. With the introduction of the Corona virus dedicated health insurance plans, the buyers also had a new option to choose from.
Leaving things to chances especially when the world is facing the pandemic is certainly not a nice financial move. Having adequate health insurance coverage for self and family members helps one avoid dipping into existing emergency funds and investments, and thus keep the long-term savings intact.
If you are looking to buy a new health cover or want to enhance the coverage of your policy, there are a few things to keep note of. Knowing them will help you make an informed buying decision.
1. Know – Which type of plan you are buying
For starters, it’s important to note that there are several kinds of health insurance plans available in the market today and they work differently. Some of them could be indemnity plans, while others are benefit-based plans. While indemnity plans reimburse the amount of hospital bills, in case of defined-benefit plans, the insurance company pays up a lump sum amount irrespective of the actual hospital expense. Individual Health Plans or Family Floater Plans, popularly known as Mediclaim, are indemnity plans while a Critical Illness plan falls in the category of benefit-based plans.
For example, say, the coverage or the sum insured is Rs 9 lakh and the hospital bill is Rs 1.8 lakh. Now, in case of the Mediclaim plans, the hospital bill of Rs 1.8 lakh gets reimbursed while if the policyholder holds a Critical Illness plan, the entire sum insured of Rs 9 lakh gets paid by the insurer provided the hospitalisation is on account of any of the specified diseases covered by the plan.
Remember, Individual Health Plans and Critical Illness Plans are not complementary to each other as they serve different purposes, rather they are supplementary in nature.
2. Find Out – Are there sub limits in the plan
One of the most important features of Mediclaim Plans is Sub-Limits. If there are sub-limits, you may have to pay a portion of the hospital bill from your own pocket. Here’s why – In the plans with sub-limits, the cost-heads such as doctor fees, nursing charges, ICU charges etc are linked to the room rent. Generally, room rent is capped at 1 per cent of the sum insured of the plan and so do some other hospital expenses. Now, if the policyholder chooses a room with a higher rent, all other hospital expenses get proportionally reduced before being reimbursed by the insurer. Therefore, better to stick to the allowed limit of room rent or opt for plans without any such sub-limits.
3. Make Sure – To disclose pre-existing diseases
Health insurance is all about covering unforeseen medical exigencies. Therefore, insurers do not provide coverage to ailments or diseases from day one of buying the policy. i.e. existing diseases are not covered. Any medical condition that the buyer is already suffering from is known as pre-existing diseases and is covered only after a specific waiting period. As per the current health insurance rules, the insurers need to cover the pre-existing ailments after a waiting period of 48 months. Some insurers in some of their plans allow a lower waiting period of 24 or even 36 months.
However, this coverage is subject to the condition that the buyer has disclosed the medical information and not concealed any pertinent information regarding the existing ailments at the time of purchasing the health insurance plan. Failing to do so may end in the claim getting repudiated by the insurer. Hence, make sure to provide an honest and complete declaration of medical history while signing the application form.
4. Find Out – If there are co-payments
At times, some health insurance plans, especially those meant for senior citizens, have a feature called co-payment. It simply means, some portion of the hospital bill has to be borne by the policyholder before the insurer pays the balance amount. Typically, co-payment is about 20 per cent of the bill amount. One may even opt for a higher limit. In most cases, opting for a higher limit of co-payment helps save on premium.
5. Get a fix on – Amount of Coverage
There is no thumb rule or a calculator to estimate the amount of health insurance coverage. Still, base your decision on the city of your residence, hospital costs around your place etc. Ideally, keep a high sum insured as medical costs are on the way up and medical emergencies are highly unpredictable. Importantly, the coverage should include your family members as well. And, if you are banking upon your employer-provided group health coverage, do make sure to have an independent coverage as well.
Now, that you have a fair amount of idea about health covers, go ahead and buy or enhance the health insurance coverage keeping these things in mind. But, make sure to read and understand the features, inclusions and exclusions before signing on the dotted line.
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