Health Insurance

Purchasing Health Insurance?

Check these 5 myths and know the facts before buying

 

The importance of buying a health insurance plan for protection against rising hospital costs is a well accepted fact now. However, selecting the right plan or choosing the right add-ons etc may not be easy at times, as there are several myths surrounding the purchase of health covers. It is always better to clear some air before making the right moves. Few health insurance myths that needs to be spoken about.

Myth: All health insurance plans are same

It is a myth that all health insurance plans are the same. Critical illness plans (CIP) are defined benefit covers that work differently from indemnity based health covers. They provide financial assistance when one develops a serious aliment such as cancer, or has a stroke. In such cases, a CIP pays the entire sum insured, unlike a health cover, which reimburses the costs. Such plans cover a specific number of ailments only and the cover ends once the sum insured is paid.

Myth: No separate plans for seniors

Till a few years ago, it was difficult for a senior citizen to get a health cover though they

are the ones who need it most. But, nowadays most insurers offer separate plans as health covers for senior citizens. Most of these have a fixed cover of Rs 1 lakh or Rs 2 lakh. Some compulsorily require co-payment.

Myth: The cheapest policy is the best policy

Unlike a term life insurance product which comes at lowest cost and provides maximum life coverage, an attempt to find the cheapest health plan may not be the right tiling. Most health.^plans within the same category have similar basic features. Plans may differ in terms of add-ons and some features. Look for plans with no or lesser subĀ­limits. Importantly look at the list of hospitals it covers and whether it is empanelled to the preferred provider network. In case not, ensure you have cashless treatments in the hospitals around your area. The premium should be the last factor to consider among the final few plans that you decide for.

Myth: I have a group insurance so I don’t need a separate policy

For many of us who are medically covered by employers, they still need to be cautious. If you have group health coverage from your employer, continue with it.Look at the coverage amount and see if it suffices. But, remember this group cover will continue as long as one is in the job. In such case you and your family may be stranded if a medical emergency arises and you have not arranged for an alternative health insurance policy. Another independent mediclaim policy will give you not only additional cover but also cover the risk period when you are in between jobs.

Myth: If I don’t renew on due date, all benefits gets lost

Even if a health insurance policy is not renewed on the due date, one may do so within 15 days for the insured person to be treated as ‘continuously covered’ in terms of continuity benefits such as waiting periods and coverage of pre-existing diseases. However, remember, no treatment is allowed during this period till policy gets renewed by paying the due premium.

Myth: Benefits from health plan start flowing from day one

Remember, there’s a waiting period after buying the policy. No diseases get covered during the first 30 days from the commencement of the policy. However, only accidental hospitalisation gets coverage from day one. Also, claims are paid only after a mandatory

hospitalisation of 24 hours. Further, some diseases are covered only after the expiry of specified period. There are 1 -year, 2-year, 3-year and 4-yrear exclusions for certain diseases. The pre-existing illnesses are mostly covered after the expiry of four claim-free years. Some long term critical illness plans have a waiting period of even six months. Most of such plans also need the insured to stay alive for a 30-day period after the diagnosis of the ailment so as to claim the money

Myth: I don’t need to track hospital bills because entire money will get reimbursed

Indemnity health insurance policies do not reimburse all expenses during hospitalisation. One, the policy may have it own sub-limits. For example, room rent may be capped at 1 percent of the sum insured. Above that, it has to be paid by insured. Further, certain medical expenses like specific medicine bills might not get reimbursed. One needs to keep track of such expenses and keep an eye on the total out-of-pocket expenses during the hospitalisation.

Unlike in the past, most plans today come with a sub-limit for each of the medical expense. For example, a plan would have a cap on the room rent on daily basis, say up to 1 percent of the sum insured or Rs 5,000, whichever is

less, that you can claim each day. For rooms in intensive care, the limit is generally doubled. Similarly, the cost of a specialist like a surgeon, anaesthetist, consultant or a medical practitioner may be capped at 40 percent of the sum insured.

Myth: Pre-existing diseases are covered from day one

Unlike in the past, health plans have started covering even pre-existing ailments provided the policy is continuously renewed with the same insurer and that too without any claims for a continuous period of four years. A pre-existing exclusion would mean “the benefits of health insurance would not be available for any condition, ailment or injury or related condition for which the insured had signs or symptoms, and/or was diagnosed and/ or received medical advice/ treatment, prior to inception of the first policy, until 48 consecutive months of coverage have elapsed, after the date of inception of the first policy. It would still be better to disclose existing ailments while applying for a fresh health policy.

Myth: The health insurance plans do not have add-on features

Although basic features may be the same, there are quite a few add-ons on offer with

recent health plans. Get to know what extra you get out of your health plan. Some have started offering the coverage of minor surgeries that require hospitalisation of less than 24 hours. Each plan has a specific list of such surgeries. Also, many have started offering emergencv medical and personal assistance service available to all insured persons when they are traveling beyond 150 kms within India from their residence for a period of not more than 90 days in a trip. Most plans have also started offering free health check-ups. Normally, one gets Health Checkup up to 1 percent of sum insured every 3rd year of the policy wherein one can undergo tests like blood grouping, hemoglobin blood count, fasting blood sugar, ECG and urine tests.

Myth: There is no benefit if more than one family is covered When more than one member is covered, there is a discount of ten .percent of premium. In addition, there are family floater plans. Largely, an individual health insurance plan, or ‘mediclaim’, would cover expenses if you are hospitalised for at least 24 hours. These plans are indemnity policies, that is, they reimburse the actual expenses incurred up to the amount of the cover that you buy. Some of the expenses that are

typicallv covered are room rent, doctor’s fees, anaesthetist’s fees, cost of blood and oxygen, and operation theatre charges.

Under a family floater (FF) health plan, the entire sum insured can be availed by any or all members and is not restricted to one individual only as is the case in an individual health plan. It takes advantage of the fact that the possibility of all members of a family falling ill at the same time or within the same year is low.

Conclusion

Now, that you have a fair amount of idea as to what needs to he looked into and asked before buying a health plan, do not restrict yourself to the lowest cost plan. Buy individual health insurance plan, especially those without family, for base level protection as it has widest range. Thereafter, buy or enhance coverage through Family Floater as it covers entire family. As you age, consider Critical Illness cover around age 40, as it could be the second level of protection to meet higher financial contingencies. 1 ‘he final level of protection towards healthcare may be net by buying illness specific plans like cancer plan or the diabetes plan. That makes the health portfolio complete and well guarded.

By Ashwini Kumar Sharma By Investors India | January 2021.

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