How do I choose the best medical insurance cover? Is this question pondering over your head for quite some time now? Relax! The simple answer in one sentence is that ‘you buy your medical insurance depending on your personal needs.
‘Personal needs’ here includes all of the following: the amount of medical insurance cover you need, the people you need the cover for, consideration of the illnesses it will and it will not cover, the period of cover and sub-limits, among its features and benefits.
In India, there is no dearth of medical insurance companies and products. The medical insurance industry has four public sector companies and 24 private sector general insurers. Together they offer a wide variety of plans for the medical insurance seeker.
Given the number of brands, products and service features available, it is natural to find it overwhelming to pick and choose one. However, once you get the hang of the basics, then it really is easy. So, here are the basics.
Understanding Medical Insurance
Medical insurance policy is a hospitalization cover. This policy covers the insured individual for any unforeseen medical expenses by pay-outs to his/her medical care. Every mediclaim policy has predefined features and benefits but almost all policies have the same standard features. There are other features and benefits offered by insurance providers that will skew your preference of one over the other. When buying medical insurance the elements that require first level scrutiny and response from you are as under:
Types of medical insurance policies
Are you looking for a medical insurance for yourself as an individual or are you checking out a family cover which includes your spouse and children? Or do you need a policy for your senior citizen parents? The different types of medical insurance policies in India are:
- Individual Policy: This policy covers only the individual mentioned in the policy.
- Family Floater policy: It is an umbrella policy which covers the entire family under one sum insured.
Senior Citizen Plan: Senior Citizen Plan are designed keeping in mind the needs of the senior citizens and can be bought to pay for medical expenses of the elderly.
Critical Illness Cover: It is an add-on cover which insures the individual only against the critical illness listed in the policy. There are some health insurance policies which cover critical illness in the same plan. For instance L & T my: health Medisure Prime Insurance Plan offers critical illness benefits.
Group Medical Cover: GMC policy or group medical cover is provided from corporates/employers to the employees of the company. This cover takes care of hospitalisations of employee and their immediate family which includes the spouse and two kids. Parents and children more than 2 are usually excluded by the employer to cut costs. This policy also covers lesser medical treatments and may include higher co-payments by the insured. The sum insured is also limited. Looking into the long terms needs of this policy it is important to always have an independent cover and not depend on your employer.
What is the Sum Assured that you need?
There is no specific formula to calculate the sum assured. You can decide on the sum assured depending on three things – (1) Inflation rate and the medical expenses you foresee and want to be covered, (2) Premium or payments you can afford and (3) Tax rebate you are eyeing (Tax benefit under Section 80D include premiums paid up to Rs. 25,000 for self and family and an additional Rs. 30,000 paid for dependent parents. These are deductible from income tax).
What should you expect from the medical insurance policy?
This is where you work out the features and benefits and tick off the following: Fast and easy cashless facility. Your entire hospitalisation expenses will be borne by the insurer. All you need to do is submit the policy details to the hospital and they will do all the liaison work with the insurer.
Network hospital across the country covered by the policy All insurers have a list of hospitals they work with to give you cashless hospitalisation benefits. If your preferred hospital is not on the list, you will have to make the claim post hospitalisation and settlement of dues personally.
A good claim settlement record: This indicates that the company is fair at the time of settling claims.
Lesser caps and sub limits on expenses: This allows you to enjoy larger benefits from the policy.
Lesser waiting period for pre-existing disease cover: As a standard rule, pre-existing diseases are generally excluded from the ambit of the policy. There are certain policies which offer cover for pre-existing diseases after a wait period ranging from 2 years to 4 years.
Renewal bonuses and discounts: If claims have not been made in year, you can avail bonuses or get a hike in the sum assured. Some policies even give no claim bonuses which are 50% of the sum assured. If no claims are submitted in the subsequent year as well, some policies even double the sum assured!
Day Care treatment: The list of medical care received that need less than 24 hour hospitalisation such as Dialysis, Chemotherapy, Radiotherapy, Cataract, Lithotripsy (Kidney Stone Removal), Tonsillectomy treatment, etc. are also covered in the policy
Free medical check-up and ambulance facility: Some policies offer free medical check-up facilities on timely renewals. Air ambulance is the new add-on to some policies.
What is not covered in the medical insurance policy?
Once the above are settled, you are ready to pick the right medical cover for you and your family. However you need to be aware of what your medical insurance policy will not cover. All policies kick into effect only after a 30 days wait period. So if you are hospitalised in the meantime, you are on your own. However, this clause does not apply to emergencies such as accidents. Equipment like hearing aids, lenses, detail surgery, sinus treatments, diseases like AIDS, venereal disease and hernia, suicides, ailments due to drugs or alcohol, etc. are not covered by medical insurance policies.
For competitive advantage, some policies may offer certain extra features for the premium you pay and others do not. It would therefore be wise to read the product literature completely so that you do not end up with an average deal.