If you happen to watch any old black and white movie where predominantly the plot runs around the theme of money, you would have definitely encountered this dialogue “Health is Wealth“. Of course, Health is wealth, but importantly how much wealth is it going to cost you to keep up your Health? Certainly you don’t want to loose fortunes on unexpected medical emergencies in this era, where the harsh reality is “Health-only if you have wealth“. Hence it is wise to avail a medical insurance policy which is suitable according to your requirements.
With a plethora of choices of Medical insurance plans available in the market, it will be quite confusing for anyone to assess and pick the right choice. In this article we will dumbdown all the insurance policy covenants and simplify your life by providing you a ready made check list.
Following are the important and tricky clauses which if not read carefully, higher are the chances you feel sorry later:
- Room Charges: The room charges across the Insurance companies (Insurer) is mostly capped to 1% of the sum insured. For eg: If your sum insured is Rs. 5 lakhs, insurer will pay upto Rs 5k towards the room rent. Anything beyond that has to be incurred by you. Hence you should, in fact, opt out of policies that have room rent cap.
- Associated medical expenses: Usually the hospitals charges various expenses like Consultation Fee, Surgery Cost, Surgeon’s fee, Diagnostics etc. in proportionate to the room rent. The higher the room rent the higher these charges. Hence prefer to opt for a room with a lower rent if your sum insured is less.
- Proportionate deduction: In case you have opted for a room which exceeds the room rent cap as per your insurer, then the Insurer will pay the associated medical expenses proportionately, but not in full. In simpler words, say your room rent cap is Rs. 5k per day and you have opted a room which is 7k per day, then the insurer will pay the associated medical charges (like Surgery cost, Surgeon’s fee, Diagnostics etc. which are obviously higher for Rs 7k room) in proportion to 5/7. Rest of the expense has to be borne by you.
- Cashless Claims: The advantage of cashless claim is that the insurer will directly pay the hospital in case of cash less claims. Patients aren’t supposed to pay for the medical expense barring a small amount. One should not get carried away by this most commonly used clause. Please note that cashless claims are restricted only to the Preferred Provider Network (PPN) or simply hospitals that are having MOU with the insurer. One shouldn’t take a medical insurance policy by the number of hospitals that are covered in the Insurer’s network. Let us take an example: Star Health Insurance boasts a network of 9.9K+ hospitals while HDFC ergo boasts about 10K+ hospitals. Which one do you think is better in this aspect? Obviously one would go by HDFC ergo considering the more prominent brand name and the number of network hospitals it has MOU with, but many doesn’t know that HDFC ergo has got more network hospitals in North than South India, unlike Star health Insurance. If you are south Indian you have to go for Star health insurance as the Networked hospitals for Insured ratio is high.
- Co Pay: One of the most ignored clauses while considering a policy is Co pay. All looks well when you go by the meaning where a part of the premium will be borne by Co payer. When it comes to settlement of the claim the insured has to pay 10% of the total admissible amount if it is a Co pay of 10%. If your admissible amount is Rs. 2 lakhs you will end up paying flat Rs. 20K. Hence one should not go for Co pay.
- Waiting Period: Waiting period is the time span during which you cannot claim some or all benefits of the health insurance from your insurance provider i.e. you must wait for a specified amount of time before you make a claim for a particular medical condition say Diabetes. Try opting for 1-2 years waiting period policy for pre existing diseases (PED) . Many insurers have 3-4 years as the waiting period. Avoid such insurers. Please note that if you already have an insurance policy and you are about to exhaust such waiting period under that insurer, we recommend you not to change the insurer until you complete the waiting period. Jumping from one insurer to another in between will make you wait for the defined period all again from the beginning.
- Family floater policy: A family floater health insurance is a plan that is is similar to individual health plans in principle; the only difference is that it is extended to cover your entire family. Do not take your family floater policy with your parents. Please have a separate policy for your parents. The general practice in the insurance industry is that the eldest in the family is the primary policy holder. In case of demise of the eldest person the whole policy gets annulled for the other members too.
Of course we will also tell you what to look for, when choosing policies. Besides the above, one should also look into the following simple clauses to pick the right one:
- Claims settlement ratio: The Claim Settlement Ratio of an insurance company is the proportion of insurance claims paid out by an insurer during the financial year. This highlights the importance of your medical insurance policy since having your claims reliably filed and settled is a crucial aspect of your policy. The higher the ratio the better the policy.
- No claim bonus: In simplest terms, the No Claim Bonus (NCB) is a reward that a policyholder receives for maintaining good health and not claiming during a policy year. For example, you have a health insurance policy of Rs 5 lakh and your insurer provides a 10 percent no claim bonus for every claim-free year. So in the first year, if you haven’t made any health insurance claims your coverage amount would increase to Rs 5.50 lakh for the same premium amount. Here opt for those insurers who provides maximum possible NCB percentage.
- Policy Premium: Well the most important factor which obviously no one ignores is the premium you pay for the policy. Compare premium among the similar plans and chose the best one suited as per your needs.
So readers kindly weigh in above all the factors before you zero in on a health insurance policy.
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