Health Insurance

In line with the recently circulated results of a cross-national analysis on health steered by the National Sample Survey Office (NSSO) in the first half of 2014, the cost of treatment rocketed at a double-digit speed of growth, outstripping normal inflation together in urban and rural India compared to the past decade. As the growing number of patients swarm private health centers and hospitals for consultation and subsequent treatments, they have been confronted with mounting medical bills. The cost of treatment fluctuates considerably across the country.

Image Source: NSSO National Health Survey 2014

In 2012, India helplessly watched 253 deaths per 100,000 persons owing to communicable ailments only, much advanced than the worldwide average of 178. India airs a greater ailment issue than other developing markets such as Sri Lanka, Mexico, Brazil, Indonesia and China. It’s an alarming situation that poorer economies such as Bangladesh and Nepal have a healthier record in health in comparison to India.

With such disturbing figures, Health Insurance serves as a shield to safeguard your savings in any ill-fated instances like hospitalization and succeeding medical expenditures related to either you or your loved ones. It’s very natural to expect an impulsive panic attack on the diagnosis of any ailment. The foremost cause for this fright is largely due the rising expenses involved in the treatment of certain illnesses or injuries. Nevertheless, if you have astutely invested in an all-inclusive health insurance plan, you can be reassured of some financial breather as your health policy will cover bulk of those medical overheads.

Secure Health and Finances: Majority of the health-related expenditures in the country are borne out-of-pocket. A lot of people rely heavily on their savings, and sometimes even borrow money, to fund medical treatment. Health insurance products are designed to ensure that one's savings does not dwindle since the insurance company will bear this cost. With medical insurance, one can benefit from quick cashless treatment, medical reimbursement, emergency ambulance cover and daily cash during hospital stay.

Cashless Treatment: Most insurers offer cashless claim facility. Under such an arrangement, the insured individual does not have to make any out-of-pocket payments in case of hospitalization. The medical bills will be settled by the insurance company directly with the hospital. In order to avail of this benefit, it is necessary that the individual get admitted at one of the insurer’s network hospitals.

Tax Benefits: The premium paid towards a medical insurance policy qualifies for tax deduction under Section 80D of the Income Tax Act, 1961. A taxpayer (less than 60 years of age), who has availed a health insurance policy for himself or herself and parents (senior citizens) can claim a tax deduction up to Rs. 75,000. Policyholders (above 60 years) who are paying health insurance premium for self and parents can claim up to Rs. 1,00,000 under Section 80D of the Income Tax Act, 1961.

OPD Expense Coverage: Cover for outpatient department (OPD) is a recent feature offered as part of health insurance policies by some insurance companies. Medical insurance plans with OPD coverage will take care of doctor’s consultation fees, pharmacy bills, health check-ups, dental treatment, diagnostic tests, etc. The extra premium paid for availing the OPD cover is eligible for tax deduction under Section 80D of the Income Tax Act under the prescribed limit.

Alternate Treatment Coverage: A medical insurance policy will cover expenses related to medical treatments in hospitals. However, sometimes there are situations where alternate treatment, such as Ayurveda, homeopathy, etc. may seem more relevant for treating certain ailments or diseases. Some of the best health insurance policies in the market provide coverage for such treatments. This gives the insured more flexibility with regards to the kind of medical treatment the individual would like to undergo.

Health Insurance Portability: Health insurance policies are portable, which means the policyholder can change their policy from one insurance company to another. In the past, when a policyholder opted for this option, it resulted in them losing certain benefits, such as the waiting period for covering pre-existing ailments. However, now the insurance regulator protects the policyholder by giving the individual the right to port his or her medical insurance policy to another insurer, keeping the benefits intact. The regulator has stated that the new insurer “shall allow for credit gained by the insured for pre-existing condition(s) in terms of waiting period”.

Ambulance Cover: Medical insurance policies cover expenses for ambulance service.

Expenses for Organ Donation: Some insurers cover medical expenses incurred in the process of organ donation. If you are being donated an organ, your donor will be financially secured by your health insurance plan.

AYUSH Treatment: Alternative medical treatments or AYUSH, which stands for Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy are covered for those policyholders who have opted for it.

Numerous health insurance companies offer multiple policies-each assuring better than the other. However, it's imperative to recognize that each policy has a different premium, covers different aspects, and are regulated by different policy provisions. With the number of options available, it's unwise to settle for the first policy that comes your way. When you can secure the best deal at a lower premium with a bit of research and comparison, why not? Selecting a suitable health plan to protect everyone in your family is not an easy task (Unless you have been buying only to save on tax so far).

Thus, always compare health insurance plans before finalizing on one.

Following are the three most important reasons why it is essential to compare health insurance plans before buying:

• It is an excellent way to reduce premium and save your money.
• By comparing policies, you will know which company offers what. That will help you choose the best coverage for you and your loved ones.
• You get to know how each one fares on critical parameters such as claim settlement ratio, exclusions, deductions, etc. It is necessary to learn about a health insurance company as much as it is important for you to have health insurance in the first place. After all, medical emergencies are stressful, to begin with, and you certainly don’t want to leave such times at the mercy of a non-reliable company.

Some of the major factors that that affect your premium towards health insurance are:

• Age & Gender: Many health insurance policies have a variance in premium rates for women and men. According to Insurance Gurus, the reasons being women are more prone to visit doctors or take medicines and are susceptible to chronic diseases. Similarly, young individuals are charged a lower premium since they are deemed to be medically fit compared to older individuals. In addition, young policyholders are likely to have lesser or nil health issues thus evading the claims.

• Pre-existing health conditions: It is obligatory for the applicant or proposer to provide the truthful health records at the time of purchasing the insurance policy to wriggle out any probability of a pre-existing medical ailment. However, if you do have any pre-existing medical ailment, then the insurance company can take three different course of actions:

  • Application can be rejected if the scope of the coverage of that pre-existing ailment is outside their policy constraint
  • Application can be accepted with a loaded premium (where a particular amount is added to the final premium to cover the risks associated)
  • Application can be accepted with the co-payment clause against the coverage of that particular pre-existing disease or any other medical condition arising out of it.

• Geographical location: There are several insurance companies whose premiums are built on the geographical location where the applicant resides. They believe that extreme climatic conditions, absence of healthy food preferences, social dislike for exercise etc. habitually originate from similar areas. And as a result, such coincidences have lead insurers to charge greater health insurance premiums.

• Injurious habits: Most insurers hike up their rates of premium for their insurance covers and sometimes even decline to offer coverage to people who are habitual smokers, chew tobacco or snuff. This is purely for the reason that they are utmost likely to suffer from life threatening diseases like cancer which might ultimately invite the claims payouts.

• Marital status: It's until now vague if married people live healthier or longer lives, but the insurance premiums by and large are lower in rates. The men usually earn enhanced benefits with this status change.

Owing to the liberalization and general awareness in the insurance segment, Indians are spoilt with choices to acquire the insurance cover from. Right from the neighborhood Insurance Agent Uncle to the Banks we frequent, the list is just ad infinitum. However, with the revolutionary innovation in the ecommerce sector, an online broker is a definitive choice.

Below are the reasons:

• Expertise: As the brokers are skilled professionals, licensed by IRDA, they are the finest to approach for any insurance needs. Above and beyond, as they deal with diverse insurance products, they are accountable towards providing accurate solutions as per distinct requirements. Their entire business model is to offer indispensable service to the consumers on priority.

• User-friendliness: Some insurance brokers like Coverfox.com boasts of exceedingly user-friendly and convenient gateway where even a newbie can access and purchase the insurance policy as per his requisite. The facility to compare and make the precise choice is what they exult in. The ease offered is noteworthy and with such astounding features, why look back?

• Post Sales Service: For the whole kit and caboodle associated with your health insurance policy, you can contact your broker and they are capable enough to deal with the same. Brokers are accredited to handle the requests on behalf of their customers by dealing with the insurance companies. So, next time you want to move your residence, and if you have bought your health insurance policy through a broker, why fear when the broker is here? A phone call is all it’ll take.

• Claims assistance: Brokers like Coverfox has a far-reaching Claims Team that handle all queries, concerns related to the claims of their customers. Even before submitting the documentation to the insurance company for claims dispensation, they scrutinize them for accuracy and completion to evade back and forth coordination with the insurance companies.

There are four important types of exclusions in a Mediclaim policy. These are:

• Time-related exclusions: e.g. Waiting period- general, specific ailments and pre-existing.
• Non-medical expenses: e.g. Registration charges.
• Illegal reasons: e.g. drugs, alcohol abuse, self-inflicted injuries.
• Out-of-scope: e.g. unproven medical procedures, HIV, adventure sports, etc.
• Room rent: This may not be an exclusion, however, do check for the capping amount on room rent, if applicable.

While we encourage people to do in-depth homework to bargain for the pertinent health insurance plan, below are few common slipups while buying the same.

• Buying the health insurance policy purely for tax-saving benefit: This is the utmost common blooper that we fall victim to. A lot of us invest and buy the insurance products purely for tax saving motive. And even though tax benefits related to the health insurance policy are eye-catching, the key drive of purchasing a health policy should, at all times, be to shield your health. You may perhaps result in buying an inappropriate health policy or picking an inadequate coverage if you purely look at it with the tax saving intention.

• Insufficient coverage: The premium amount is habitually one of the foremost influential aspect that we mull over when buying a health insurance policy. And in an effort to bargain the lower premium, we finish up purchasing a policy offering deficient coverage. Evaluating your healthcare requirements and comparing the coverage provided by insurers are few steps one needs to take before settling on any specific health insurance plan.

• Secreting medical history: Under no circumstances, conceal or camouflage the history related to your health fearing the rejection of the insurance policy. Non-disclosure of your prevailing medical illnesses can result in the denial of your insurance claim at crucial times.

• Disregarding co-payment clause: Quite a lot of insurers have merged co-payment in the policy with an objective to keep an eye on claims payouts. Usually, the co-payment clause is imposed on those who have explicit medical history, for cures that are remarkably costly or moreover on policies catering to senior citizens. According to this clause, treatment cost has to be shared by the policy holder with the insurer. This could be in the range of 10% and 20%, depending on the plan you have opted for. Your premium outflow will be comparatively lesser if you elect for a greater co-pay percentage.

• Not evaluating the Health Insurance Exclusions: Before you buy any health insurance plan, it is imperative to read the health insurance exclusions. Be aware about the illnesses and medical conditions that are not covered by the Policy, to avoid any rude surprise and a massive bill.

• Seeing Short term: For purchasing a health insurance policy it is crucial that you consider long term. A policy which appears smart to you at the beginning will not essentially be advantageous as you age. Scout for a health plan useful even when Old.

Travelling abroad is awesome. Whether business or leisure, you get to see different places and explore widely. However, uncertainties come uninvited. You may have planned your official trip wisely but medical emergencies can wipe off your savings extensively.

You may have a health insurance policy offered by your employer, however, it is advisable to check the policy wordings whether the group insurance plan extends its services for an overseas travel.

Mostly, health insurance policy in India do not cover medical emergencies on an overseas travel. The cost of medical expenses abroad is way too high as compared to any treatment or hospitalization expenses in India.

In fact, covering overseas medical treatment is explicitly an exclusion when it comes to a health insurance policy in India. However, there are certain insurers in India that offer worldwide coverage to ensure better access to medical emergencies while on an overseas holiday.

You should buy a travel insurance policy that would take care of your medical emergencies, losses and also give you a peace of mind while you enjoy your stay abroad.

Nevertheless, your hard-earned savings can also be kept intact in case you face any medical emergencies on your overseas travel.

Yes. In simple terms, the process of transferring the prevailing health insurance plan from existing insurer to a new insurer is termed as portability. According to the circular issued by The Insurance Regulatory and Development Authority (IRDA), from 1st October, 2011, the insurance companies are directed to permit portability from one insurance company to another and from one plan to another, without the insured having to lose the renewal benefits for pre-existing illnesses, enjoyed in the preceding policy. The entire process for the portability has to be kick started at least 45 days prior to the actual renewal date. For the terms and conditions related to the subject, it is best to refer the policy documents.