Experts advise buying regular health insurance plans rather than disease-specific covers because of the wider protection they offer. “There are several similar risks that individuals live with such as an accident at home or work, or a sudden acute illness. A comprehensive health insurance policy ensures that an individual’s savings corpus remains protected in case of exigencies," said Abhishek Bondia, managing director and principal officer, SecureNow.in.
Here are some of the things to keep in mind if you are planning to buy a comprehensive health policy.
It’s important to buy a policy with adequate sum insured.
There is no one-size-fits-all approach here but you should pick the cover depending on the category of hospital you are likely to opt for. Also, remember that the cost of hospitalization can be higher in metro cities like Mumbai and Delhi compared to tier II and III cities.
It’s imperative to take the future cost of treatment into account while buying insurance. An 8% medical inflation would mean the cost of a procedure will increase from, say, ₹6 lakh to ₹13 lakh in 10 years. Therefore, the younger you are, the larger cover you will need because you’re likely to fall prey to chronic illnesses later in life. However, don’t delay buying health insurance because as you age, the premiums will go up and underwriting will be more stringent.
Health insurance policies come with various clauses such as sub-limits, co-payment, waiting period for pre-existing diseases (PED) and deductibles. It’s important to understand these clauses and the impact they can have on your claim.
Cap on room rent: Sub-limits are where the insurer specifies a limit for an expense. You should avoid policies that come with a limit especially on room rent because other cost heads will depend on the category of the room you pick. “Treatment packages at hospitals are linked to room type. In case the insured takes a room priced higher than her eligible threshold, the insurer deducts proportionate charge on non-room rent expenses as well. This can lead to a huge dispute at the time of claim settlement," said Bondia.
Co-pay and deductible: Both these clauses would mean shelling out of your pocket or paying through another policy. Co-pay requires you to bear a pre-determined percentage of the claim amount. In case of a deductible, you have to pay a pre-fixed sum after which the insurer steps in.
Anurag Rastogi, chief actuary and chief underwriting officer, HDFC ERGO General Insurance Co. Ltd, suggests opting for a health plan that offers minimum or no sub-limits and co-pay. “Ideally, one should look for policies without these restrictions as it hinders full utilization of coverage. It is advisable to opt for a lower sum insured than opting for a policy with a higher sum insured with these restrictions," said Bondia.
There are, however, a few exceptions here. If you have a pre-existing condition which is making it difficult for you to buy a health policy, then you can opt for a plan with restrictions. Also, if you already have a policy with no restriction then you can opt for a deductible in the second policy, which will make it cheaper. The amount up to the deductible threshold can be paid through the first policy.
PED waiting period: Go through the policy document carefully to understand how much the waiting period is.
Typically, health policies have a waiting period of 30-90 days from the date of commencement of the policy, except in case of an accident where there is no waiting period applicable. “Policies also have a waiting period of one to two years before certain diseases and surgeries are covered. PEDs are excluded for three or four years if the policyholder declares it at the time of buying. If not, it’s excluded forever," said Rastogi.
Policies also exclude specific treatments such as plastic and cosmetic surgery unless necessary and prescribed during an active line of treatment. Hospitalization due to self-destruction, self-inflicted injuries or the use of intoxicating drugs or alcohol is also excluded. “Any ailment related to a pre-existing condition is not payable until the waiting period lapses. So, one should select a plan with low waiting periods," said Bondia.
With the standardization of exclusions, health insurance policies are set to become better. The regulator has asked insurers to include the treatment of mental illnesses, psychological disorders, internal congenital diseases and genetic disorders, among others. But insurers are still allowed to exclude some ailments permanently.
Though premiums may go up with this move, it will make health insurance more transparent and useful, said Bondia. Policyholders should still understand the list of exclusions mentioned in the offer document, he added.
Consider family floater and super top-up plans, which may be more affordable, but ensure you have an individual cover in place.