BUSINESS

Choosing the right policy

Options galore:The floater cover offers lower coverage and hence, costs less.GettyImages/istockHRAUN

Options galore:The floater cover offers lower coverage and hence, costs less.GettyImages/istockHRAUN  

Continuing from the last fortnight’s column on health cover, here are some factors that you should keep in mind while finalising the policy. You need to make good choices on covering your family, sharing the burden, going cashless and buying additional cover.

Covering your family:

In your hospitalisation policy, you can include your spouse, dependent children, parents and parents-in-law. Including senior citizens in your policy gets you additional tax benefits while some companies also give a family discount in premium when more than one person is covered under the same policy.

You can choose individual SIs (sum insured) for each member of your family or a collective SI, called a floater cover. It works like this:

Let’s say you take a floater SI of Rs. 5 lakh for your family of four members and one of you is hospitalised.

If the claim paid is Rs. 1.5 lakh then, for the rest of the year you have only Rs. 3.5 lakh cover for all of you put together.

If this Rs. 5 lakh is an individual cover then, while the person for whom the claim was made continues with Rs. 3.5 lakh cover for the remainder of the year, the other insured each have their full SI.

The floater cover offers lower coverage and hence costs less. For example, a Rs. 5 lakh individual cover for each of four members of a family costs upwards of Rs. 50,000 and about Rs. 35,000 for a floater cover.

Sharing the burden:

Some policies have a feature called excess or deductible by which the insured bears the first portion, say Rs. 10,000, of the expenses. This can either be per claim or per policy year. Deductibles can be compulsory or voluntary and the latter carries a discount in premium.

Another method of sharing the cost burden is co-pay. Here, the insured bears a percentage of each claim, say the first 10%.

This encourages prudent choices on the cost aspect of treatments like category of hospital room. Voluntary co-pay is also possible for a discount in premium.

The insurance company can directly settle claims to the hospital, making the process very convenient for the insured. This is provided the hospital is in the network of the insurance company. If you choose to take treatment at other hospitals, you have to pay the bills and file an insurance claim.

Additional cover

What we saw until now form part of the main policy and its coverage. What follow are optional extras that you have to pay for.

Additional cover for situations outside the normal policy’s benefits are available at extra cost. As always, terms and conditions apply, and they can differ by company and policy.

For example, the maternity expenses benefit can be purchased as an additional cover and has a waiting period of 24 to 36 months and is limited to a certain percentage of the average sum insured over the previous two or three years.

The hospitalisation policy is the basic health insurance you should buy. In addition to this there are some policies that can add security to your portfolio and we will soon take a look at them.

( The writer is a business journalist specialising in insurance & corporate history )


Healthy options

  • Including senior citizens in your policy gets you additional tax benefits

  • One can choose a policy for each member of the family or go for a floater cover

  • Additional cover is available at extra cost


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