HEALTH INSURANCE
Studies reveal that in spite of growing inflation rates clubbed with upsurge in healthcare costs, 70% of Indians are yet to opt for any sort of insurance cover protecting them against hospitalization expenses. It’s shocking to know that in a fast developing country like India, people are still being ignorant about the need to plan for a suitable arrangement to tackle any financial emergencies arising out of an accident or sudden illnesses.
So, why is it important to invest in a mediclaim policy? The answer is simple – to safeguard your own financial well-being.
Mediclaim policy is a hospitalisation benefit that is offered by both public and private sector general insurance companies in India. The mediclaim insurance policy takes care of expenses following hospitalisation/domiciliary hospitalisation in case of any of the following conditions:
- In case of sudden illness or surgery
- In case of an accident
- In case of any surgery during the policy tenure
Features of Mediclaim Policy
- Can be renewed annually for your entire life time. Some insurers offer renewals every 2 or 3 years
- Can be opted for Individual or Family Floater
- For anyone between the age of 91 days to 65 years. Specific policies available for Senior Citizens also.
- Cover pre-existing medical conditions after a waiting period of 3-4 years
- Sum insured opted can be as much as Rs. 50 lakhs
- Can be ported to a different insurer at the time of renewal
How Are the Premiums Determined?
Insurance companies consider a lot of factors while determining the premiums for the mediclaim policy. Age, sum insured, geographical location, any pre-existing medical condition, number of members to be insured, the extent of coverage, etc. are some of them. While the guidelines are set by the IRDAI, health insurance companies take the final decision regarding premium calculation on the basis of your needs and requirements. The more comprehensive your requirements are, the higher will be the premiums to be paid.
What’s Not Covered in Mediclaim Policy?
While your mediclaim insurance will cover most expenses related to hospitalization and related costs, there are certain exclusions that are NOT covered in the policy. The list of what’s not covered forms an integral part of the policy document and should be referred for more exhaustive information. Below are a few of the aspects that are not covered in most mediclaim policies.
- Non-medical expenses like administrative charges, service charges, food for by stander, consummables such as toiletries, diapers, syringes, etc.
- Diseases/ailments contracted within a specific time from the policy purchase
- Any dental treatment except in case of an accident
- Sexually Transmitted Diseases and HIV
- Cosmetic surgery, circumcision or plastic surgery
- Vaccinations
- Health conditions arising out of war, nuclear weapon, etc.
What Should You Consider While Buying Mediclaim Policy?
Investing in mediclaim is a great decision. Consider all the factors involved and accordingly choose the right policy. Below are some of the aspects you need to keep an eye on before purchasing the policy:
Sum insured (coverage amount): While choosing the sum insured or the coverage amount, it’s advised to consider factors like rising healthcare costs, rate of inflation, etc. to choose the right amount. Also, if you are living in one of the metro cities, your cost of hospitalization will be higher compared to rural areas. Similarly, if you are opting for the coverage of your dependants too, you might want to consider higher sum insured.
- Individual or Family Floater: This decision entirely depends on you. If you are unmarried and looking to cover only yourself then you can opt for the individual policy. However, if you choose to cover your entire family including your parents then selecting a family floater plan is the ideal choice. Family floater plans are also economical compared to individual policies bought for each family member due to the discounts offered by the insurance companies.
- Sub-limit on Room Rent: Most mediclaim plans are tailor-made with room rent sub-limit. So, in case the insured opts for a room category higher than his eligibility, a proportinate deduction will be applicable on the entire bill, other than the cost of medicines. These limits might vary depending on the insurance companies. To make it simpler, let’s explain with an illustration. Mr. Parekh bought a plan that had room rent sub-limit as 1% of the sum insured. He had chosen the coverage for Rs. 2 Lakh. That means, every time Mr. Parekh wants to claim hospitalization on his mediclaim, the insurance company will compensate his expenses limited to the room rent of 1% of his sum insured i.e. Rs. 2,000 per day. The entire calculation of his claim disbursement will be carried out as per his room rent limit even if he opts for a room higher than the limit of Rs. 2,000. Hence, it’s wise to choose the policy with proper room rent limit to avoid any rude shocks during claim settlement.
- Co-payment: Some mediclaim policies are in-built with co-payment clause. Co-payment is basically a percentage amount that the policy holder needs to bear when the claim is raised before the insurance company settles the rest. These co-payments can range anywhere between 10% and 30% depending on the insurance company and the plan opted. For example: If you have opted for a mediclaim with 20% co-payment, whenever you raise a claim, you’ll have to bear the first 20% of the total claim amount and the rest will be compensated by the insurance company as per the terms and conditions of the policy. Some insurance companies also offer to cover the risks related to pre-existing diseases with higher co-payments.
- Exclusions: Every mediclaim policy is designed to cover your medical risks. However, there are certain exclusions that are either not covered or covered after a specific term. Conditions arising out of a suicide attempt, HIV infection, congenital diseases, addiction to alcohol or drugs, etc. are not covered by any policy whereas expenses related to maternity, hysterectomy, gall bladder surgeries, kidney stones removal, etc. are covered after a specific waiting period. Most insurance companies cover the risks related to any pre-existing diseases only after 3-4 years. Details of these exclusions are mentioned in the policy wordings of the plan and one should definitely go through the same before finalizing to buy.
- Hospital Network: One of the biggest benefits of opting for a mediclaim policy is the convenience of cashless settlement of hospitalization expenses. Every insurance company has a network of hospitals and when you seek hospitalization in any of these hospitals, you are entitled for a cashless treatment if the hospitalization/treatment is within the scope of coverage. This works out to be a great financial relief at most crucial times. Hence, check out and be aware of the hospitals in your area that is in tie-up with the insurance company you wish to buy the plan from.
- Reputation of the Insurance Company: Last but not the least, it’s always wise to check the credibility and market standing of the insurance company you wish to buy the mediclaim from. Apart from this, a little study of their claim settlement ratio will also prove to be useful while making the final decision.
How to Claim on the Mediclaim Policy?
With the advancement in the insurance sector, claiming on your mediclaim policy has become quite convenient, hassle free and time saving. You can claim via Cashless or Reimbursement.
If you wish to opt for Cashless Treatment in a network hospital, you must contact the TPA (Third Party Administrator) help desk at the time of hospital admission. A claim form along with doctor’s reports has to be submitted to seek approval for the cashless treatment. If the request is approved, the insurance company/TPA settles the bills for the expenses directly with the hospital without involving the policy holder. This is the most convenient method of claiming on your mediclaim policy.
If, due to any reasons, you are unable to seek cashless treatment, you can opt for Reimbursement. Once the treatment is sought in the hospital and the amount settled, the claim form along with the discharge summary and all other related prescriptions and doctor’s reports need to be sent to the insurance company/TPA. The insurance company/TPA will then scrutinize the documents for correctness and check against the policy terms before taking the final decision on claim settlement. Typically, this process takes around 15-25 business days.
* Policy Coverage and Exclusions depends on the plan opted
FAQ- Mediclaim
TPA is a Third Party Administrator licensed by IRDAI to act as a service provider to all insurance companies. They facilitate the smooth functioning of health insurance policies by offering their value added services including claims management, dispatch of policy documents and health cards, post sales services, etc.
No. You can claim as many times as the need arises during the policy period up to a maximum of your sum insured amount.
Some insurers offer zone wise premiums. In such cases, the policy conditions might also impose zone wise co-pay. For Example, the premium for an insured with address in Ahmedabad might be higher than in Kochi. So, the insurance company might impose a Co-pay for an insured who has taken policy from Kochi and taking treatment from Ahmedabad. (Please refer your policy wordings.)
Honestly, this decision lies entirely with the insurance company. If they feel the need to do so, you will have to undergo the pre-issuance medical checkup at an authorized diagnostic centre suggested by them as per your convenience. Typically, a medical checkup is triggered for those above 45 years of age or anyone suffering from any pre-existing medical condition to evaluate the depth of risk involved.
What are the documents required for mediclaim reimbursement?
Hospital Cash Insurance
One buys health insurance plans to meet the cost of hospitalisation. But life is full of surprises. When the hospital bill is handed over to you, you may get the shock of your life if the entire cost of hospitalization is not reimbursed. In such an event, someone not holding a Daily Hospital Cash (DHC) plan will have to pay out of pocket. This also acts a policy to cover the loss of income while you or your family members are hospitalised. Let’s see how a DHC plan works and where does it fit into one’s health insurance portfolio.
Out-of-pocket expenses
There may be several incidental expenses incurred during one’s hospitalisation that would remain outside the ambit of hospital bills. These are certain non-admissible hospital expenses which the insurer does not pay up. There are some expenses which are generally excluded and are termed as non-admissible expenses in hospitalisation policies. One may have to incur certain other expenses related to eatables and conveyance of friends and relatives during hospitalisation. Further, there could be sub-limits of expenses, thus restricting the claim amount in the policy.
How a Daily Hospital Cash (DHC) plan works
Different insurers may call a DHC plan by different names – Hospital Cash, Daily Hospital Cash or Hospital Cash Insurance, but all work in the same way. Such plans are different from a Mediclaim plan in the way they operate. While the Mediclaim plan reimburses the hospital bill, the DHC plan pays one on the basis of the number of days of hospitalisation. Irrespective of the actual amount of hospital expenses, that would include the cost of tests, doctor fees and room rent, amongst others, a DHC plan would merely look at the number of days of hospitalisation and pay up as per the policy terms and conditions. The payout in case of a DHC plan is not linked to the actual hospitalisation expenses. What’s more, you can make your claim under both the DHC and Mediclaim policies simultaneously.
Coverage
Unlike choosing the sum assured in a Mediclaim policy, in a DHC plan one has to choose the amount of daily benefits one wants. Most DHC plans have daily benefit amounts of Rs 500 / Rs 1,000 / Rs 1,500 / Rs 2,500 or Rs 3,000 to choose from. One can buy the plan for self or for the entire family members too. Usually, insurers give a discount of 5 percent on the premium when more than one family member is covered under the same policy. The actual payout under a DHC plan is based on the limit chosen but will depend on the nature of hospitalisation too. In case of any stay in the ICU, the payout may double while in case of surgeries, it may even be 5/20 times of the daily limit.
Example
Assuming someone holds a Mediclaim policy of Rs 2 lakh and also buys a DHC plan with Rs 3,000 as daily benefit. He is admitted for 4 days and the total hospitalisation bill amounts to Rs 34,000. While the hospital bill will get reimbursed through the Mediclaim policy, he gets Rs 12,000 (Rs 3,000 for 4 days stay) additionally.
Usually, most DHC plans double the amount in case of any stay in the ICU, i.e. in that case, Rs 24,000 (Rs 6,000 for 4 days stay) is paid. In case of a major surgery, the claim amount may total Rs 60,000 (if it is 20 times of the daily limit for a major surgery).
Advantages of DHC
If one is holding both the Mediclaim and DHC plans, using the latter for making any claim may help one keep the no-claim bonus (NCB) intact in the Mediclaim plan. Say, there’s 2-3 days of hospitalisation and the hospital bill is not huge. If you use your Mediclaim policy to pay for it, NCB will get impacted. In such a case, using the DHC plan might not only help you get the hospital bills cleared, but also keep your NCB intact.
Differentiation
The working of DHC plans appears pretty simple but the features may vary a lot among different plans. For getting an informed decision related to choosing a plan, one also needs to understand such differentiation and the restrictions.
Number of days coverage: In one policy year, the maximum stay in a hospital may be capped at 30/40/60 days. Within this, stay in the ICU may be capped at, say, 10 days.
Benefits during ICU hospitalisation and major, minor surgeries: In most DHC plans, the daily benefit amount chosen is doubled if one gets hospitalised in the ICU. Further, in some plans, in case of major surgeries directly involving brain, heart, liver or lung, the benefit can be 20 times of the DHC chosen while in case of minor surgeries, the benefits can be five times.
Maximum benefit: The aggregate of all benefits payable in any one policy year may be capped at 150 times of the DHC benefit opted by the policyholder. Within this too, the cap, say, for surgical hospitalization could be 90 times of the limit.
Others: Similar to a Mediclaim policy that requires a minimum of 24 hours of hospitalisation, some DHC plans may require a minimum of 48 hours of hospitalisation Some DHC plans also reimburse hospital bills related to accidents.
Conclusion
Do not consider a DHC plan as a replacement of a Mediclaim policy. It should always be used as an add-on to supplement your medical insurance needs. The first ring of defence is always your Mediclaim (individual or Family Floater kind of plans) policy as it is a more comprehensive plan. Post that, buy a critical illness plan especially if you are around 40. Thereafter, consider buying a DHC plan to cover the incidental out-of-pocket costs incurred during hospitalization.
Critical Illness Policy
Do you need extra insurance for life-threatening ailments when you have a comprehensive health plan and, maybe, a group cover from your employer? In such a case, why buy another insurance policy?
But what if you are diagnosed with a critical ailment that requires specialised care while your health plan has a limit on doctors’ fees and, thus, won’t cover the full cost of treatment? Or, say, there is a cap on specific expenses such as on medicines, intensive care unit or prosthetics and your bill is more than what the insurer will pay. In such cases, you’ll have no option but to pay from your pocket.
Acute illness can also mean loss of income, total or partial disability and change in lifestyle. The financial burden could be far more than what an indemnity health plan, which pays hospital bills, would cover. Buying a critical illness plan is the best way to get over these shortcomings.
While an indemnity policy covers hospitalisation, a critical illness plan pays a lump sum on diagnosis of serious ailments listed in the policy document.
The lump sum that you get can be used for various purposes such as to pay for expensive treatments or recuperation aids, make up for loss of income due to fall in the ability to earn or pay off debts. Both these plans provide benefits in different ways.
A critical illness plan is a supplement to your health insurance portfolio.
BALANCING ACT
The purpose of a critical illness cover is paying for expensive treatments. Plus, it is much cheaper than an indemnity plan. For instance, a comprehensive health plan for a 30-year-old with a sum insured of Rs 5 lakh costs around Rs 6,000 a year. A critical illness policy with the same cover costs Rs 1,500 a year.
A comprehensive health plan covers a wide range of risks and is therefore significantly expensive than a critical illness plan that covers specific situations.A combination of comprehensive health insurance and critical illness cover can give a good balance between pricing and coverage.
WHAT TO BUY
Critical illness covers are fixedbenefit plans. One gets the full sum insured irrespective of whether one is hospitalised or not or what the treatment expenses are. However, details vary from plan to plan. For instance, most plans have a survival period clause says the insured must survive for at least 30 days after he or she is diagnosed with any critical illness to file the claim. But a few plans do not have this clause.
The number of critical illnesses covered also varies. The built-in coverage also differs from policy to policy. While some insure accidental death and partial or total disability due to accidents, some don’t. One should evaluate and compare a few different plans to decide which suits one the best. Consider the list of illnesses covered, the cover amount, the claim procedure and the payment history of the insurer.
Here are some points that must be considered while shopping for a critical illness policy.
1. THE RIGHT SIZE
The best way to decide how much cover you need is to know what the company is charging you for. If you know the benefits offered, it will be easier to decide how much protection you need.
Keep in mind factors like treatments costs, recurring costs and future financial liabilities in case of income loss. Age and medical history are important while deciding the appropriate sum insured. The sum insured should be higher for the aged as they are more likely to develop chronic ailments.
Also take into account existing covers such as Mediclaim or personal accident and disabilityinsurance policy.
2. STANDALONE OR RIDER?
While a critical illness plan can be bought as a standalone policy, critical illness riders are typically clubbed with life or health insurance plans. The policy terms and conditions under both the options are more or less the same. The choice between a standalone policy and a rider depends on your requirement.
Generally, a standalone policy offers more flexibility in choosing the sum insured and larger covers compared to riders. The advantage of a standalone critical illness plan is that it is not compulsory to renew your health or life plan if you want to keep the critical illness cover. Riders are recommended as clubbing covers can facilitate easy management. Moreover, critical illness plans are sold by both life and general insurance companies. The only major difference is that life insurers offer policies with longer tenures.
Critical Illness Policy
Do you need extra insurance for life-threatening ailments when you have a comprehensive health plan and, maybe, a group cover from your employer? In such a case, why buy another insurance policy?
But what if you are diagnosed with a critical ailment that requires specialised care while your health plan has a limit on doctors’ fees and, thus, won’t cover the full cost of treatment? Or, say, there is a cap on specific expenses such as on medicines, intensive care unit or prosthetics and your bill is more than what the insurer will pay. In such cases, you’ll have no option but to pay from your pocket.
Acute illness can also mean loss of income, total or partial disability and change in lifestyle. The financial burden could be far more than what an indemnity health plan, which pays hospital bills, would cover. Buying a critical illness plan is the best way to get over these shortcomings.
While an indemnity policy covers hospitalisation, a critical illness plan pays a lump sum on diagnosis of serious ailments listed in the policy document.
The lump sum that you get can be used for various purposes such as to pay for expensive treatments or recuperation aids, make up for loss of income due to fall in the ability to earn or pay off debts. Both these plans provide benefits in different ways.
A critical illness plan is a supplement to your health insurance portfolio.
BALANCING ACT
The purpose of a critical illness cover is paying for expensive treatments. Plus, it is much cheaper than an indemnity plan. For instance, a comprehensive health plan for a 30-year-old with a sum insured of Rs 5 lakh costs around Rs 6,000 a year. A critical illness policy with the same cover costs Rs 1,500 a year.
A comprehensive health plan covers a wide range of risks and is therefore significantly expensive than a critical illness plan that covers specific situations.A combination of comprehensive health insurance and critical illness cover can give a good balance between pricing and coverage.
WHAT TO BUY
Critical illness covers are fixedbenefit plans. One gets the full sum insured irrespective of whether one is hospitalised or not or what the treatment expenses are. However, details vary from plan to plan. For instance, most plans have a survival period clause says the insured must survive for at least 30 days after he or she is diagnosed with any critical illness to file the claim. But a few plans do not have this clause.
The number of critical illnesses covered also varies. The built-in coverage also differs from policy to policy. While some insure accidental death and partial or total disability due to accidents, some don’t. One should evaluate and compare a few different plans to decide which suits one the best. Consider the list of illnesses covered, the cover amount, the claim procedure and the payment history of the insurer.
Here are some points that must be considered while shopping for a critical illness policy.
1. THE RIGHT SIZE
The best way to decide how much cover you need is to know what the company is charging you for. If you know the benefits offered, it will be easier to decide how much protection you need.
Keep in mind factors like treatments costs, recurring costs and future financial liabilities in case of income loss. Age and medical history are important while deciding the appropriate sum insured. The sum insured should be higher for the aged as they are more likely to develop chronic ailments.
Also take into account existing covers such as Mediclaim or personal accident and disabilityinsurance policy.
2. STANDALONE OR RIDER?
While a critical illness plan can be bought as a standalone policy, critical illness riders are typically clubbed with life or health insurance plans. The policy terms and conditions under both the options are more or less the same. The choice between a standalone policy and a rider depends on your requirement.
Generally, a standalone policy offers more flexibility in choosing the sum insured and larger covers compared to riders. The advantage of a standalone critical illness plan is that it is not compulsory to renew your health or life plan if you want to keep the critical illness cover. Riders are recommended as clubbing covers can facilitate easy management. Moreover, critical illness plans are sold by both life and general insurance companies. The only major difference is that life insurers offer policies with longer tenures.
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