Important features of your Health Insurance Policy
Health Insurance has become a critical aspect of your overall Financial Plan, with medical expenses inflating at supernormal rates and lifestyle diseases continuing to spread at alarming rates. In fact, a single medical emergency can push your Financial Planning back by several years, which is why more and more Financial Advisors are recommending adequate medical coverages. If you’re making the wise move of upping your Mediclaim coverage, here’s a list of a few important things you need to learn about the Health Insurance Policy you’re about to sign up for.
You may be surprised to note that there are significant price differentials between policies of different companies, offering the exact same Sum Insured. This could be an outcome of differences in underwriting processes or even brokerage structures, but in case the features are the same, why should you pay more? The only case for paying more for a policy with the exact same features, is when the policy in question has an outstanding claims experience. Speak to somebody who has availed of it and find out of its worth it.
Waiting Period for Pre-existing conditions
A pre-existing condition is a health problem that existed before you applied for your health insurance policy such as liver disease, kidney disease, heart disease, high blood pressure, asthma or even something as minor as a previous accidental injury. Check with your health insurance provider for their list of pre-existing conditions, as they likely wouldn’t be covered for anything from 2 to 4 years. The shorter, the better, obviously.
Though you may have purchased a policy with a cover of Rs. 5 Lakh, your insurer may have incorporated a rather detrimental feature called ‘disease wise capping’ which might restrict the maximum payout for a specific condition to say, 1 Lakh. Make sure you know which ones these are, in order to avoid rude shocks at a critical time! The higher the cap, the better it is for you. If there’s no diseases wise cap, that’s even better.
Waiting Period for Specific Diseases
The waiting period for preexisting conditions is typically anything from 2 to 4 years. In addition, many policies will incorporate an additional ‘waiting period’ for specific diseases (for instance, cataract). Needless to say, its best if this waiting period clause doesn’t exist in the policy you’re about to purchase. In the event that it does exist, it’s best if the waiting period is extremely short.
Some health insurers will issue ‘sub limits’ on things like lodging, thereby capping the proportion of expenses payable towards a specific aspect of your medical treatment. Ideally, you should choose a Health Insurance plan that has no sub limits in place, so that you can enjoy a high degree of flexibility with regards to your medical treatment, without worrying about whether a certain portion of your bill will not be paid for!
Some Health Plans will mandate that the policyholder bears a percentage of the total expenses. For instance, you may be billed for Rs. 3 lakhs, and realize only later that your insurer will only be reimbursing Rs. 2.5 Lakhs! This feature is known as ‘co-pay’ and is a clear disadvantage. Make sure the policy you’re going for does not have a ‘co-payment’ clause embedded in it.
All Health Policies do not cover expenses related to maternity. Check back to see if yours does. Some policies may cover maternity, but with a pre-specified waiting period of at least a year if not more. Typically, plans that cover maternity expenses will be priced significantly higher than regular plans – so do the math and make sure this is a cot worth really bearing!
Medical Check-Up Facility and Wellness Benefits
Some Health policies have an inbuilt preventive health check facility. This can be very useful for diagnosing lifestyle diseases early on in their cycle. Still others provide for a fixed sum of money annually for wellness or fitness services such as a gym membership. That’s not a bad feature at all – provided you make use of it, of course! This actually creates a win-win scenario between a client and an insurer, as a healthier client will likely fall ill less often!
Claim settlement ratio
Last – and most important - It’s vital to know what percentage of claims for a particular policy gets declined and what percentage goes through. Needless to say, a high claim settlement ratio is preferred. You should look for a ratio of at least 95%, if not more. After all, you want to know for sure that the money you’re putting away as premiums will actually come to good use in the event of a crunch moment!