It’s one of those things you tend to procrastinate most on, because somehow, none of us believes it will happen to us: get sick and not be able to pay the bill. Don’t mean to scare you, but the right time to buy health insurance is now, especially if you have age and good health on your side. The good news is that 35 crore Indians got insured in 2015-16 as per the IRDA Annual Report. The bad news that we already knew: over 70% of the medical expenses in India are still borne by individuals, paying out-of-pocket. With more than 30 insurance companies and over 300 health insurance products, there’s no dearth of choice.
There are 3 types of health insurance
Group insurance that your company gives you the benefit of; individual, which protects a single person; floater that provides coverage for you and family members you name in the policy. Even if you have group coverage, it is smart to purchase an additional basic health policy, as employee medical policies typically have limited coverage and are valid only until you are employed. Also, if you are not employed for a while, you will need to be covered. For families, a floater is cost-effective, says Dr Abhijeet Chattoraj, Professor and Chairperson, Centre for Insurance and Risk Management, BIMTECH, Greater Noida.
There are different kinds of costs to account for
Don’t just let lower premiums drive your decision. “Choose a decent limit of coverage,” says Sushobhan Sarker, Director, National Insurance Academy, Pune. A coverage of ₹3-5 lakh is sufficient for a small city; you need ₹5-10 lakh coverage for a metropolis. Check what the policy dictates on room rents. Often, only a percentage of the sum insured will be paid: typically 1% of hospital room rent and 2% for the ICU.
Beware of sub-limits on hospitalisation. Most hospitals have a link between room rate and all the other medical expenses, including doctor’s fees and medical tests. This means that if you exceed the room-rent limit, the insurer proportionately reduces the reimbursement sub-limits for all other associated medical expenses. You will end up paying for the difference in cost not only of the room, but also of all the associated medical expenses. Ask about the sub-limits, and if possible, get a policy with no sub-limit.
There are built-in safety measures
If you have a pre-existing condition like diabetes, there may be a waiting period of 2-4 years in which no claims relating to your condition will be paid. Choose plans with the smallest waiting period, or those that cover your illness from day 1. There are 5 stand-alone health insurance companies in India, including Star Health, Apollo Munich, Max Bupa, Religare and TTK. These companies have various specialised disease-specific products, such as diabetes- or cancer-specific insurance policies. They also have maternity and newborn care products.
Take advantage of the ‘Free look period’ every insurance company is obligated to provide you as part of the IRDA Health Insurance Regulations (2016). This gives you 15 days to review the terms and conditions of the policy before finalizing it.
If you are not happy with the services of your current insurer, you can transfer your policy to another company. There is also a way to avoid paying twice for health insurance for the same period while travelling outside the country. “Provide your current insurer with proof of your overseas policy while travelling abroad and you may be able to extend your current policy for the length of your stay outside the country,” says Dr S M Deshpande, Health Insurance Consultant and former DGM, National Insurance Company.
