Get Insured the Healthy Way. Review on General Tips on Medical Insurance

Choose a health insurance policy wisely as the gap between your needs and delivery by insurers may be large

Buying health insurance is not easy for the Indian consumer – and it’s obvious that consumers are not getting the deal they are looking for. According to data available with the insurance regulator, the quantum of complaints against health insurers is the highest in comparison to the number of customers. Clearly, either the insurers are not doing good job or consumers are confused about what they need and what they are getting.

In general, there is a huge gap between what consumers understand is the job of the health insurer and what ends up getting delivered. Even to start figuring out what one needs and what one should be getting, it’s important to get the basic understanding in place. The situation is not made easy by a wide variety of terminologies concerning the wide range of services available from insurance companies. At last count, there were at least 32 different health covers available, each with a different name and a claim to be different and superior to all others.

Here’s a starting primer on what these options are. To start figuring out what you need, you should be familiar with these basics to help you in asking the right questions.

Individual Health Plans: These are the ‘traditional’ health insurance covers, know as ‘mediclaim’ policies informally even though the word ‘mediclaim’ is just a brand of one of the companies. These generally cover hospital treatment expenses provided the treatment is on in-patient basis and lasts for at least 24 hours. The expenses covered include hospital bed/room, nursing, surgeon’s fees, consultant doctor’s fees, blood transfusions, oxygen and operation theatre charges. Unlike the past, most plans now come with sub-limits for each of these heads. They usually don’t cover pre-existing diseases or complications arising from them for the first four years of policy. Besides, there are specific conditions that may not be covered for a certain initial period. There is generally an enhancement for every year during which no claim is made.

Family Floating Policies: These consist of a shared Individual Health Plan(for a family). The benefits are mostly the same, but the sum insured can be used for the treatment of any or all members of the family and not a single person. Rather than buying a Rs 2 lakh health cover for each member of the family of four by spending for a total cover of Rs 8 lakh, if you buy a Family Policy of for Rs 8 lakh, each person covered under it can avail benefits up to Rs 8 lakh as opposed to the Rs 2 lakh in the earlier instance. This reduces the need for you to pay from your pocket. Also, it comes at a lower premium than individual policies would have done. A Family Policy can be bought by an individual who becomes the proposer along with spouse, dependent children up to 25 years or even unmarried, divorced, widowed daughter and dependent parent.

Critical Illness Plan: This is not a substitute for the basic individual or family policy, but designed to be added as an addition to the former. The fact that these have to be bought separately is a major flaw in the way health insurance is sold in India. An illness 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 has a standalone policy from either a life insurer or a non-life insurer. If critical illness occurs, it pays the entire sum insured and terminates and 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 Citizen Health Plan: Most basic mediclaim plans cap the starting age at around 60 years, while SCHPs are generally for the age group of 60 to 80 years. Most can be renewed lifelong or up to the age of 90, and have a fixed coverage of, say, Rs 1 lakh or Rs 2 lakh. Besides looking for sub-limits, those buying these plans should watch out for certain illnesses as many ailments are excluded from the plan. These plan could possibly have an option of a critical illness plan.

Unit-linked Health Plans: These are to health insurance what normal ULIPs are to term insurance and are equally useless. They are 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. Health ULIPs are made up of two parts – a health plan and a unit-linked investment plan. 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, just like a ULIP.

Medical Cover from Life Insurance Companies: Life insurance companies, too, have started offering health plans. Most of these ar, 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. If you opt for a good combination of basic mediclaim, family policy and a critical illness plan, then these are not needed.