HEALTH INSURANCE
Take an adequate Health Insurance (from policybazaar.com etc.). Here are seven tips to help you choose the best health plan (source: Mutual Fund Insight Magazine, India- September 2021, 2022, May 2023 etc.):
i) Look for the right coverage
Choose a health plan that secures you against a wide range of medical problems, and provides benefits including pre/post hospitalization, day care expenses, transportation, illnesses that you may be at risk of due to your family’s medical history, etc. To give an idea, have a cover of at least Rs 15-20 lakh for a family of three to four people, individual plans to be of Rs 5-10 lacs. As a rule of thumb, go for a sum insured that is equal to your annual income.
It’s also important to look at super top-ups which are an affordable way of enhancing your health cover. A super top-up health insurance plan provides additional medical coverage to people with an existing low cover health insurance policy or an employer Mediclaim policy. It is an additional sum assured over the base health insurance policy, and allows people to get their medical expenses covered even if they have exhausted the sum insured of their regular health insurance policy. The best practice is to buy a super top-up plan from the same insurer. Since a basic and a super top-up plan are considered separate policies, you and your partner can individually claim tax benefits up to Rs 50,000 (under Section 80C).
ii) Keep it affordable
It is a wise decision to buy a reasonably priced health cover at the start to ensure you are covered properly and the premiums are also affordable. With time, you can review your plan and increase cover appropriately with the rise of income, family size, and requirements.
iii) Family floater vs Multiple Individual Health Insurance: Which is a better option?
Having multiple individual policies is surely better from a cover perspective. Family floater plans are definitely more cost-effective in case there are no claims. But once a member makes a claim, the cost of the whole family floater policy will go up. In Individual plans, only the plan making the claim will get impacted and not the other ones. And once you have made a claim, you might find it difficult to make enhancements in the cover amount.
So, if you can afford it, take separate individual plans. If cost is a major factor while taking the plan, go with family floater plans.
iv) When you buy a health plan, make sure to check for how many years the plan will cover you or whether it offers limited renewability or not. Why? Because you will require a health plan the most during the later years of age. So, choose health plans which offer lifetime renewability.
v) Network hospital coverage
Once you have a selected list of health plans, check whether or not your preferred hospitals and doctors are included in their hospital network. Always prefer an insurance provider that has a wide network of hospitals across the world e.g. with IFFCO-Tokio, you can choose from 5,000+ network hospitals where you can avail quick, convenient and cashless claims settlement!
vi) Look at the fine print
Insurance is one financial product that has a history of surprising its buyers when they need it the most. Do not ever buy a health-insurance plan without going through the fine print. Reading lengthy terms/conditions can be pretty grueling but you must check and confirm the following crucial points. Visit the insurer’s website and you will find the policy wording in the ‘Downloads’ section. If not, ask the insurer’s customer-care team to help you with the written document. Don’t settle for verbal information.
Once you get the document (usually in the PDF format), look for the following key words (written in blue). Thanks to technology! Just pressing two buttons (Ctrl+F) can save a lot of time.
Sub-limits: Some of the most common sub-limits often present are a cap on the room rent, ICU charges and doctor’s fees. An insurance plan of say Rs 5/- lac with this clause normally limits the room rent to 1% (Rs 5,000/-) and ICU charges to 2% (Rs 10,000/-) per day. Having a reasonable sub-limit on certain procedures like cataract is fine but limitation even on smallest of things, like the room rent can be quite discomforting, so, better have a plan with no such sub-limits. Remember, government insurers and a plan of less than Rs 10/- lakh by a private insurer are more likely to have this clause. Obviously, the lesser the sub-limit, the better it is.
Co-pay: This usually mandates the insured to meet a certain portion of the treatment costs out of his pocket. For example, if there is a co-pay clause of 10% and the hospital bill is Rs 5/- lakh, then the insurance company will provide Rs 4.5 lakh and insured will pay Rs 50,000/- from his pocket. This clause is very common if the age of the insured is 60 or more. Ideally, the lower the co-pay %, the better it is.
Exclusions: All insurances companies have certain exclusions- the diseases they do not cover. These exclusions can be permanent or temporary. Temporary exclusions (cataract, hernia etc.) are removed after continuing the policy for a certain period. Dental treatment, cosmetic surgeries and HIV treatment fall under permanent exclusions of almost all health-insurance policies. Pre-existing diseases (diabetes, hypertension) are usually covered after 2 to 4 years of buying the policy. This is referred to as waiting period, look for the shortest waiting period.
Domiciliary hospitalization or treatment at home: The benefit of this clause kicks in when hospitalization is required but can’t be done due to unavailability of hospital beds (as during COVID pandemic) or the insured is severely ill/injured and cannot be moved to the hospital. Most of the insurance plans have a sub-limit here and provide coverage only when the treatment last for a certain period- usually three days.
Restoration benefit/Insurance refill: This feature restores/refreshes your sum insured as soon as it gets exhausted during a treatment. Some companies can provide restoration without any limit on the number of times it can be done, while others limit it to just one time. Further, some companies do not allow restoration benefit for the same illness for which insured has already been hospitalized in the same year. But some policies do not have any such limitations. The restoration benefit is not available for first claim during the term of policy. It is quite clear that the restoration benefit is an ideal add on cover for health insurance. You can always choose to insure a higher sum of amount, but that comes at a higher premium to be paid. On the contrary, the restoration add on cover helps you keep your premium within the stipulated budget and at the same time avail the benefit of additional cover.
Restoration seems to be an attractive feature but be careful. For example, if insurer X provides Rs 10/- lakh cover with one-time restoration at a somewhat similar premium as insurer Y who is offering Rs 20/- lakh cover with no restoration, isn’t the latter(Y) a better deal, all else being equal.
Pre- and post-hospitalization: most policies do provide this cover. One should look for a pre-hospitalisation cover of at least 30 days and a post-hospitalisation cover of 30-60 days, which should be sufficient in most cases.
vii) High claim settlement ratio
The claim settlement ratio is the number of claims settled by the insurance provider over the total received claims. Always choose an insurer that has a high claim settlement ratio e,g, IFFCO-Tokio have settled a total of 8.61 lakh claims in FY2019 and have a claim settlement ratio of 92.65%.
-ICICI Lombard Health Insurance Max Protect Classic Plan taken in December 2023, for my son, an NRI (32 years) has features: Sum Assured Rs One Crore (Annual Premium- Rs 16,206/-). Room Category- As opted, Unlimited Reset/Restorations, Abroad Treatment for 45 days, Pre/Post Hospitalization, AYUSH Hospitalization, Road Ambulance etc.