Technological breakthroughs and advancements, new procedures and more effective medicines have made it possible to cure many diseases. However, these come at a very hefty price.
This is where health insurance plays a major role as it helps you overcome your health concerns without financially bleeding you out. Health insurance can no longer be viewed as a luxury, it is a must-have requirement today considering the soaring medical inflation.
In India, general inflation of 6-7% is expected, however in the field of healthcare it is as high as 15%.# Thus, healthcare inflation is speeding away at a very high pace. A study conducted by Bigdecisions.com, a personal finance advice platform, says about 95% of Indians are without adequate health insurance cover to meet some of the most common procedures and ailments.* As such, the time is ripe to clear the various queries that most people have regarding health insurance to enable more people to come into the fold of health insurance. Answered below are some of the frequently asked queries on health insurance:
1. What is the right age to buy health insurance?
The right time to buy health insurance is when you are young and hale and hearty. This may appear as a foolish statement; however, the following reasons should be able to convince you about the soundness and credibility of this statement.
Escape pre-existing disease waiting period: Most health insurance policies have 48 months waiting period for pre-existing ailments meaning that these diseases will not be covered during this duration. Buying a policy when you are young and free of any diseases would ensure that later on as you age and contract any ailment you would be able to get instant coverage for your ailment and thus optimally use your policy. If bought at an advanced age when you are suffering from some ailments, these will be considered as pre-existing diseases and you would not be covered for the same or complications arising out of it in the waiting period. Many health insurance companies also decline cover in case of a history of pre-existing ailments.
Lower premium: The premium for a policy bought at an early age is much lesser than the premium for a policy bought at the later stages of life.
Vast choice: The number of products available for people of advanced age is much lesser than products available for younger age groups. There are many comprehensive plans available for individuals in the early phases of life. Many plans come with maximum entry age and do not allow people beyond that age to buy.
Financial planning: Health insurance is one of the cornerstones of prudent financial planning as it helps you take care of your and your family’s medical expenses without hurting your savings. Health insurance also covers accidents and one can, after all, meet with an accident at any age. An accident in the early years of your career can be a huge setback financially and you may end up spending all your savings or fall in debt in order to recover from the accident. Similarly, ailments such as dengue, chikungunya, etc can strike at any age and may need hospitalization (depending on the severity and complexity one can end up spending Rs 40,000/- to Rs 1,00,000/- or more for dengue-related hospitalization).
2. What are the parameters one should check for while shopping for a health insurance plan?
- Waiting periods for pre-existing diseases
- Waiting period for certain surgeries/ailments/procedures
- Sub-limits, if any
- List of daycare treatment/procedures covered
- Per illness limit, if any
- Room rent sub-limit - Check whether it is capped. Room rent is a very important parameter to check as some other expenses are in paid in proportion to the room rent.
- Whether the policy is co-pay or fully reimbursable
- Exclusions under the policy
- Network of hospitals, whether the preferred hospital is part of the network
- Incurred claim ratio and claim settlement ratio of the insurance company
3. Isn’t hospitalization a must for making a claim?
This is no longer the case. Due to medical advancements, for certain surgeries such as cataract removal or procedures such as angiography, radiography, dialysis, chemotherapy, kidney stone removal, etc, the patient can go home after a few hours. These are referred to as day care procedures. Every insurer has a list of day care procedures they cover. Daycare procedures are those treatments which can be administered without requiring 24-hour hospitalization.
Further, out-patient treatments such as dental treatment, doctor’s consultation fees, alternative medicine treatments such as Ayurveda, Unani, etc are covered by health insurance plans (depending on the plan features).
4. All hospitalization expenses till the sum assured amount can be claimed, right?
This is not the case. There are sub-limits on specific treatments, doctor’s consultation fees, pre-planned surgeries such as cataract removal, knee replacements, etc. There are room rent limits and other charges such as surgery charges, doctor’s visits, medical tests (even ICU charges in some cases) are at times linked to the room rent and payable in the same proportion as room rent.
5. My health insurance coverage begins from day one, right?
Only accidents are covered from day one. No diseases are covered in the first 30 days of the policy. Other than that, in the following scenarios, the insurance cover begins at a later date.
- Pre-existing ailments – As stated earlier, a waiting period is applicable for all pre-existing diseases and cover starts only on completion of the waiting period which is usually 48 months.
- Exclusion for specific ailments – Certain ailments such as hernia, tonsillitis, piles, cataract, knee replacement, etc are covered after a waiting period of 12 – 24 months.
Thus, it is best to buy health insurance early in life when you are disease free so that you can avail the benefits when you need it the most.
6. More no. of network hospitals and day care procedures is best, right?
The network hospital list is not static and sees additions and deletions. There are certain parameters that the hospitals need to fulfill to remain in the list. Sometimes even hospitals deny cashless claims for certain insurance companies/TPAs in case of delayed payment or due to other issues.
Similarly, plans which offer a long list of day care procedures and minutely state what is covered may also have an exhaustive list of restrictions and conditions which in turn can result in high claim rejections. As such you may be better off with a plan that provides broad treatment categories rather than specific ones.
7. What happens if the renewal premium due date is missed?
Most insurance companies start sending renewal intimations (physical/email/SMS) prior to 45 days of the due date. It may be noted here that the act of sending intimations is a value-added service provided by insurance companies and they are not mandated by law or IRDAI to do so. Thus, a policyholder cannot blame the insurance company for non-receipt of intimations and subsequently not paying the premium.
In case the premium is not paid by the due date, a grace period of 15-30 days is provided to do so. A grace period is the period of time permitted after the due date to renew the policy by making renewal premium payment.
The consequences of not making renewal premium payment on time are:
- No coverage: In case a claim occurs after the due date and even if it happens to be within the grace period, it will not be entertained or paid for by your health insurance policy.
- Renewal of policy can be denied: The insurance company can refuse to renew your policy after the grace period even if you are ready to pay the premium. Also, you risk losing the lifelong renewability feature (as per this provision laid down by IRDAI, if the policyholder regularly renews his policy, he cannot be denied/prevented from continuing the policy for life irrespective of the claim history and ailments).
- No-claim bonus: You lose out on the accumulated no-claim bonus which is essentially a feature by which for every claim free year, a certain percentage of the sum assured is added to your original sum assured enhancing your overall coverage at no extra cost.
- Waiting periods re-apply: Health insurance policies usually have a waiting period of 36-48 months for pre-existing diseases. In case you do not renew your policy on time, you will be treated as a new customer and the waiting period will be re-set.
For eg: Rajesh has a pre-existing disease which will be covered after 48 months of continuous coverage. Rajesh forgets to pay the renewal premium for the fourth policy year on time. After a couple of months, he approaches the company and is ready to pay the pending premium. However, he is now treated as a new customer and the waiting period of 48 months will again apply though he had already completed 36 months of the waiting period earlier.
Similarly, certain diseases/conditions like cataract surgery, hernia, joint replacement, maternity coverage, etc usually have a mandatory waiting period of 24-48 months. The waiting period for these will also re-apply in case of delay in premium payment.
Thus, delays in renewal premium payment can prove very costly as you end up losing several benefits that are linked to continuous or uninterrupted insurance coverage. As you grow older and acquire new ailments, it will not be easy to get a health insurance policy. So, making timely renewal payments is a wise thing to do.
Health insurance premiums can be a huge amount, so one should plan in advance to have this amount on hand to pay on time.
8. How do I opt for cashless claim facility?
Cashless claim facility is available only in the empaneled or network hospitals of the insurance company. One can check on the website of the insurance company or TPA or call on their customer service number to know whether a particular hospital is a part of their network.
The claims process under the cashless facility varies according to the type of hospitalization i.e planned or unplanned. Planned hospitalization usually happens in case of surgeries such as cataract removal, hernia, tonsillitis, etc. Unplanned hospitalization is naturally a result of emergencies such as an accident, sudden illness, etc.
- Cashless claims process for planned hospitalization at a network hospital:
The insured has to inform the insurance company about the nature of hospitalization and treatment at least 4-5 days in advance. Usually, a pre-authorization or cashless claim form has to be submitted to the insurance company. It is best to check with the company’s customer service for the list of requirements as this may vary across companies. Once the company scrutinizes the form/documents and clears it, an intimation is sent by the company to the insured and the concerned hospital with details of the eligibility amount. On the day of the admission to the hospital, the insured has to show the hospital his/her health insurance card and the confirmation letter provided by the insurance company. The treatment can then be sought and the medical bills are directly reimbursed by the insurance company to the hospital.
Related Article:- Go Cashless With Cashless Mediclaim Insurance Policy
- Cashless claims process for unplanned/emergency hospitalization at a network hospital:
The policyholder can check with the customer service of the insurance company about the nearest or most suitable network hospital. Once in the hospital, the health insurance policy details or e-card should be shown to the hospital authorities who in turn will fill the requisite forms and get in touch with the insurance company. The insurance company will accordingly provide an authorization letter to the hospital indicating the policy cover details and eligibility amount. The medical bills are directly reimbursed by the insurance company to the hospital. In case of rejection of a claim, the insurance company sends an intimation to the insured with the reasons for rejection.
9. In spite of availing cashless claim facility, do I have to make any payments from my pocket?
Yes, there are certain charges which are not reimbursable (varies as per plan and company specifications). You need to pay for this from your own pocket and whatever is reimbursable is taken care of under cashless claims. Some of the charges which you need to pay from your side even though you have opted for cashless claims are as under:
- Registration/Admission charges
- Attendant/visitor pass charges
- Special nursing charges not authorized by the attending doctor
- Service charges not forming a part of the room rent
- Charges for extra bed for attendant etc
- Bed retaining charges
- Charges for TV, Laundry, Telephone/Fax charges, etc
- Food and Beverages for attendants and visitors, toiletries, etc
- Purchase of Medicines not related to the treatment
- Stationery, Xerox or certifying charges
This is only an indicative list and not an exhaustive one, also this will vary across companies.
10. What happens when policy lapses during hospitalization?
- In case the admission to the hospital happens before the policy expiry date and you have duly informed the insurance company before the expiry date and during the course of hospitalization the policy lapses, then the insurance company will honor the claims subject to the terms and conditions of the policy.
- If hospitalization happens during the grace period or after policy lapsation, as per prevailing rules the insurance company is not expected to admit such claims. However, it is best to inform the company immediately on hospitalization as the decision on claim payment may be discretionary and subject to the circumstances of the case.
11. What happens to a family floater policy if the person in whose name the policy dies during the tenure of the policy?
A family floater policy covers all members of the family under a single policy and the sum assured can be used for the benefit of any of the members. If one member claims a certain amount, then the insurance coverage for the rest of the family is reduced to that extent for that year. The policy is bought by the proposer who pays the premium. If the proposer dies, then the policy can be transferred in the name of another member of the family, subject to he/she being a major.
For eg: Harish had taken a family floater policy where he is the proposer and primary insured. His wife Sudha and two minor kids are the other members covered under this policy. Harish meets with an untimely death in an accident. His wife Sudha can take over the policy on account of his demise. Fresh medicals will not be required as the wife and children were already covered under the policy. Now that the members of the policy have reduced from four to three, Sudha can also ask the insurance company to reissue a fresh policy with a reduced premium. However, such requests are usually acceded to only in case no claims are made and may vary from company to company. Alternatively, Sudha can wait for policy renewal when the policy will be renewed at a reduced premium.
12. What can I do if I am dissatisfied with my health policy?
Health insurance policyholders are allowed to switch their insurance company and port their policy to another company if they are not happy with their existing insurance company. This facility was introduced by IRDAI in 2011, however many policyholders are still not aware of this and hence not using this facility. As per a survey conducted by ET Wealth, 27.12% of the respondents were not aware of this feature.^
Porting is different from canceling or not renewing a policy with one company and buying from another. When you port a policy, you are essentially transferring your existing policy from one company to another, the benefit here is that you do not lose continuity benefits of pre-existing diseases i.e. If you have already completed two out of the four years of pre-existing disease waiting period with your existing company, when you port your policy you would be required to serve only the remaining two years and not again undergo a four-year waiting period. However, when you buy a fresh policy from another insurer you start from scratch with the various waiting periods.
According to IRDAI, a portability request needs to be made at least 45 days prior to the renewal date of the existing policy to provide sufficient time to the new insurance company to scrutinize the request. It may be noted that portability request can also be rejected by the new insurance company if it does not meet their underwriting guidelines or other terms and conditions of the company.
13. Are any income tax benefits available on health insurance premium?
Under section 80D of the income tax act, an individual can claim a deduction of up to Rs 25,000/- for the insurance of self, spouse, and dependent children. An additional deduction for the insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age, or Rs 50,000/- (as per the Budget 2018) if the parents are aged above 60.
If both the taxpayer and the parent for whom the health insurance policy is taken are more than 60 years of age, then the maximum deduction that can be availed under this section is to the extent of Rs.100,000/-.
Hope the article above has helped in clearing various queries that you may have on health insurance and helps you in taking a judicious decision regarding your health insurance needs.
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