An exhaustive guide for health insurance
At the time I am writing this, I probably don’t need to tell you why you must have a health insurance. But if you haven’t taken it yet, here is my take on what should you know before taking any health policy. Even if you already have an insurance, you would probably want to double check it, and port it to new policy without losing on the continuation benefit.
Also, if your parents have separate policies, check their policies too, and if needed, consider upgrading or porting too. At the older age it gets a lot more difficult and expensive to get a fresh policy, might not even get that many options. Take that from my experience, I realized it much later that the policy is insufficient, and for my father, at around 70 years of age with pre-existing chronic conditions, there were only 3-4 providers who allowed an entry. Anyway, I ended up doing a thorough research on the policies, and thus sharing it with you
0. Why should I get a policy if my employer provides for it
Even if your employer gives you a policy, it will only be effective till retirement. And taking a policy at that age, without income, could literally cost you bomb. Besides, you would then have to go for waiting period and what about age related illnesses? And that was for retirement, what if you left or lost your job? You lose the insurance benefit the same day. (Likely not even EoD). However, the porting might work in this case, but you still lose out in case of sudden loss of job.
Now that we’ve likely established the fact you should get one even if covered by your employer, just know that you can simply use your employers policy first so as it doesn’t break NCB on your personal policy.
1. Individual policy or a family floater
First thing you need to decide, do you need a individual policy or a family floater. Family policies are better in terms of convenience, and they might come at a lower cost. However, that’s not true always. 3 major factors that might change the cost are: age of oldest member, tobacco consumption and pre-existing diseases. If any of these factors applies to even a single member of the family, total cost might be much higher than had you taken individual policies. Generally, it would be wise to take your parents policy separately while you, your spouse and kids can be a part of single policy.
2. Sum insured
Second most important factor would be deciding on sum insured (SI). Generally, you would be well off with any amount for smaller treatments, however, you should be considering few factors before deciding. Like the average cost of treatment in your vicinity, lifestyle, family history of chronic diseases etc. And also the age you are taking the policy at, the younger you are, the more considerate you should be for inflation. Though you can change the policy amount at the time of renewals, there might be certain restrictions from your policy providers.
3. Waiting Period
This is another reason you shouldn’t delay your policy. Basically, the policy becomes effective immediately however, the coverage does not. Most policies work in this way – accidental claims are covered from day 1, other illnesses are covered only from 31st day. However, that excludes pre-existing diseases, which are covered only after a certain period (as per policy provider, could be 2/3/4 years). Also, slow growing diseases like kidney stones, cataract too have a waiting period. However, in case of porting, your time with previous policy is also considered as waiting period.
Now, below are few things that will help you finalize. Some of these features might not be available in base policy, but you can opt for the add-ons (riders as they say) if needed.
4. Reset benefits:
This is a feature that comes into effect when you have exhausted the total SI. If in a treatment you exhausted the SI, you were practically cover-less for rest of the year without this feature. This feature gives you back the whole basic sum insured, so you can use that for next visit to the hospital.
Catch 1 – most policies don’t allow you this benefit if you are admitted for the same illness in a policy year. As far as I know, only HDFC Ergo allows for a reset even if it is for same illness.
Catch 2 – Some policies allow one time reset and other policies might reset for more number of times.
Catch 3 – In some policies, the reset won’t trigger unless the full amount is exhausted. That is, if your 1st usage didn’t make use of total SI (like you used only 3L from a total SI of 5L), you wont get the benefit.
5. Pre & Post Hospitalization expenses:
As the title suggests, it covers for the expenses before and after the actual hospitalization. Policies might offer from 15 days to even 180 days of coverage.
6. Co-payment:
Some policies are designed in a way that certain conditions might ask you to pay a part of total cost of treatment. Like if you consume tobacco, or have chronic conditions or pre-existing diseases. These might be justified, and conditions might vary, but you need to know before taking the policy what are those conditions and how much co-payment is needed.
Catch – Some policies are zone based. In that, if you bought the policy in a tier 2/3 city and want to get a treatment in tier 1 city, you might have to bear the co-payment.
7. Room capping and sub-limits:
Most policies limit the room capping to 1% of SI. Also, there might be sub-limits for certain treatment. For instance, even if your SI was 5L, and your total cost of heart treatment was 5L as well, but your policy had a cap on heart treatment at 3L. So, you will only get benefits of 3L. However, few policies might not have any such capping and few might remove the capping with an add-on.
Catch – some cappings are SI based too. Same policy of higher SI might not have a capping, but the lower SI might come up with certain capping.
8. Day care treatments, AYUSH and alternate treatments
Most policies now cover for certain day-care treatments that don’t require you 24 hours of hospitalization. What are covered under these can differ from one insurance company to another. Also, if you are inclined towards AYUSH or any other alternative treatments, some policies do cover that too, up-to certain limit.
9. OPD claims
Some policies offer you OPD claims. Policies with this feature might be expensive, but can be beneficial if you have frequent visits to doctor.
Catch – this might exclude dental and eye treatments, depending upon policy.
10. Health checkup
Some policies offer you health checkup either cashless or on reimbursement basis. However, the offerings might be different. Like some offer you every year, or in every 2/3/4 year blocks. Also, it may only consider continuous claim-free block of years.
11. Life long renewals
This might look absurd, but I came across a provider who only allowed renewals until the age of 90. However, almost all of major providers offer life long renewals.
12. Increment of premium
Policies generally increase the cost every year. However, to avoid, you can make a lump-sum payment of 2-3 years. But still, after that the cost will increase. You should better check with providers how much they generally increase YoY.
13. Exclusions
Some policies might have certain exclusion in which they will not reimburse the amount. However, these are generally some extreme conditions, like riots, war, terrorists attack etc, but still good to know before hand. Also, some policies exclude treatment for mental illnesses too. Some might exclude you for taking part in adventure sports. And, most don’t cover for self inflicted injuries.
14. Wellness benefits
Some policies encourage you to remain healthy by giving you discounts on following certain activities like when you track your steps through their app. It’s basically a win-win. When you remain healthy, it saves company from risk, and saves you some money on renewals.
Know your rights
15. Free-look period
All the policies come under a free-look period of 15 days, that means, for some reasons, if you decide that you don’t want the policy, you can cancel the policy within 15 days and get the whole money back.
16. Moratorium
This is another clause for consumers’ benefit. That says, after completing 8 years in a policy, the company can not reject your claims in any case (likely except fraud claims, that too not without any proof). However, the moratorium applies only on the basic SI and not the bonus. Any change in the SI amount, comes with a new moratorium period.
17. Porting
You are free to port your policy if you are not happy with your provider. And you wont lose your continuation benefits. That is, if your policy was in effect for 4 years, and the policy of new provider comes with a waiting period of 4 years for certain diseases, the waiting period does not apply to you. You are covered for everything that the new policy covers after 4 years, from day 1 itself. However, this can only be done at the time of renewals. In fact, the providers will suggest you to initiate the porting process 45 days before renewal date, so that if for any reason the renewal fails, you wont lose your existing policy too.
One more thing
18. Upgrade
Don’t hesitate to change your policy amount or policy based on any major change in your lifestyle. Long running policies often require you to look into the need of upgrading your policy. Either due to change in the nature of job, moving to an expensive city or simply the inflation.
Last, but not the least
19. Don’t hide the facts
Always, I repeat, always, give correct information to the providers and do verify on receipt of the policy whether operator has filled the details correctly. Once an agent filled in incorrect DoB on my parents’ policy to reduce the premium, just to make the sell.
Discrepancies like this give the company a right to reject a claim and thus this might come as a shock to you at the worst time.
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