Here are some of the important terms that you will come across while subscribing to a health insurance policy.
The sum assured, in simple terms, is the maximum coverage amount you can get in a policy year. It forms the basis of all your claims. Consider the increasing costs of hospitalization, medicines, and treatment before you decide on your sum assured.
It’s advisable to select a higher cover. At the same time, the cover shouldn’t be high enough for you to dig into your pockets for paying the premium.
The co-pay and sub-limit system is introduced by some health insurance companies to prevent hospitals from billing unreasonable room rents to patients. In a co-pay policy, you need to pay a part of the expenses irrespective of the sum assured.
If a policy has 10% co-pay, then the insurance company will pay 90% of the expenses and you have to bear the rest. Besides, some insurers cap the expenses of treatments to reduce the claims of hospitals.
This is known as sub-limit. While buying a medi-claim, choose a policy that has fewer sub-limits. There are some medi-claim policies that do not have co-pay or sub-limits. Try to select such a plan.
Some employers provide health insurance to their staff under the group insurance plan. But you can still have a medi-claim of your own which covers the entire family. The second medi-claim policy may not consider if your employer allows you to transfer the policy if you leave your job. It’s important that you compare several policies before buying one.
The majority of the comprehensive medi-claim policies cover critical illness. You don’t need to purchase another policy. It’s advisable to subscribe to a comprehensive plan and then top it up with an accident insurance plan which doesn’t cost much.
To serve your medi-claim needs, there are two policies that are enough. If there’s a family history of a certain illness like thyroid or blood sugar, you should ideally buy a separate critical illness medi-claim. If your family has no such history, then there’s no need for a critical illness plan.
If you have already exhausted the same as well as the multiplier benefit within your policy year. But in most cases, the benefit is not available on the same illness if the limit is already used up.
But a restoration benefit can be useful if you have subscribed to a family floater plan where the full sum assured is exhausted for treating only a single family member. The remaining members will have no cover to fall back upon in case of hospitalization for the rest of the policy year.
In such a case, some of the members can get covered for other ailments than the one for which expenses have been already paid by the insurance company.
If there has been no claim in the preceding year Insurers usually extend a NCB to a policyholder. Check the NCB while buying medi-claim, amount before signing on the dotted lines.
NCBs can range from 5% to even 100% of the sum insured. A high NCB gives cover against medical inflation and you don’t need to worry about increasing your coverage year-on-year.
- Pre-existing illness, waiting period, exclusions:
Pre-existing diseases are the ones you have while subscribing to the medi-claim policy. Most health insurance companies specify a waiting period for these illnesses. The insurance company is unlikely to give a cover against the same.
In most cases, a pre-existing illness is covered after at least two years. of buying the policy.
Exclusions simply mean the diseases that are not covered under the medi-claim. For instance, if you suffer from diabetes while taking the policy, then kidney ailments are likely to be excluded from cover if the same happens because of diabetes.
Never hide any pre-existing ailments from your insurer while buying a medi-claim policy. It may reduce your hospitalization claims.
Most health insurers provide free health check-ups to the policyholder. But what’s termed “free” is actually not such. The cost of the check-up is included in the premium. Buy such a policy only when you are keen to get the facility each year.
Also check whether the medi-claim policy, renewed every year, gives coverage for the entire life. This is important because life expectancy is increasing due to improved medical technology.
While most insurance companies give full life coverage, some provide cover only up to 75-80 years.
Medical insurance policies provide cover on hospitalization that doesn’t require overnight stays. These are called daycare procedures. Check out how many procedures are covered in the plan.
Also, most insurers don’t consider maternity as a medical emergency. So don’t look for a maternity cover if you have no plans for a baby.
Medical costs are increasing. It calls for large covers, but not all can afford a high premium. A top-up plan can come useful in such a case. It reduces the cost of deductibles i.e. the amount you pay before the insurance company pays up.
The insurance company will only pay up to the sum assured. A top-up plan, on the other hand, doesn’t pay until the hospital bill breaches a specific limit. Say, if the hospital bill is? 8 lakhs with Rs.3 lakhs as deductible, you need to pay the latter, while the insurer pays the balance of Rs.5 lakhs.
But you can use your individual/group policy to pay the deductible amount. A combination of a basic medi-claim plan along with a top-up plan is much cheaper than a single cover.
For instance, the premium for an Rs.5 lakhs regular cover for a 26-year old male, will be around Rs.6,500. A top-up with Rs.15 lakhs cover will entail an additional premium of Rs.5,000, which is far cheaper than a standalone policy of an identical amount.