Health Insurance

The rising cost of medical treatment and increasing stress levels have made HEALTH INSURANCE a necessity in every common man’s life.

HEALTH INSURANCE is a blessing that not only protects an individual but also his entire family by ensuring good medical treatment as and when needed without stressing their finances.

 

 

WHAT IS A HEALTH INSURANCE POLICY?

HEALTH INSURANCE POLICY is a contract between the insurance company and the policyholder where the insurance company agrees to undertake the risk and guarantees payment of medical expenses in case the policyholder or any of his family members falls ill or meet with an accident leading to hospitalization.

For this matter, insurance companies also do tie-ups with leading hospitals to provide cashless treatment to their policyholders.

In case the hospital where the policyholder has taken the treatment is not in the insurance company’s tie-up list, the insured then will have to take care of the expenses himself and then claim reimbursement from the insurance company.

The government also promotes HEALTH INSURANCE by providing a tax deduction under section 80D.

 

 

TYPES OF HEALTH INSURANCE POLICY

The following are the different types of HEALTH INSURANCE PLANS.

1. Individual plan – This is the basic HEALTH INSURANCE plan that insures individuals against the risk.

 

2. Family floater plan – Family floater plan covers the entire family including self, wife, children and parents under the single policy.

 

3. Senior citizens plan – This is the special insurance policy designed to meet the needs of senior citizens who are above 60 years of age.

 

4. Critical illness plan – This plan covers a list of critical illnesses as specified in the policy. The best part about such policies is that the claim becomes payable on diagnosis of any of the illnesses mentioned in the policy document.

 

 

WHAT KIND OF EXPENSES DOES A HEALTH INSURANCE POLICY COVER?

The following is the list of some of the most common expenses that HEALTH INSURANCE policies cover.

1. Hospitalization Expenses – It refers to room charges, cost of surgery, intensive care unit charges, doctor's fee, anesthesia, blood, oxygen, operation theater charges, etc. This is only paid when you are admitted to a hospital for in-patient care, for a minimum period of 24 consecutive hours.

 

2. Pre-hospitalization expenses – These are other medical expenses such as investigative tests, routine medication, etc. incurred by the policyholder up to 30 days before hospitalization.

 

3. Post-hospitalization expenses – These include medical expenses like doctor consultation, medical tests post-hospitalization, medications, etc. incurred up to 60 days post-hospitalization.

 

4. Day-care expenses – HEALTH INSURANCE also covers over 540+ day care treatments which might not require a policyholder to stay hospitalized for 24 hours or more.

 

5. Room rent – Room rent in nothing but the per day bed or room charges that hospitals charge to their patients over and above the hospitalization expenses. Every HEALTH INSURANCE provides a fixed amount daily for the number of days a policyholder stays in the hospital.

 

6. Ambulance Cover – In an emergency, a policyholder can also claim their expenses for availing ambulance services reimbursed under the health insurance plan.

 

 

IMPORTANT POINTS TO NOTE ABOUT THE HEALTH INSURANCE POLICY

The following are some of the important features of the HEALTH INSURANCE POLICY that all subscribers are expected to know.

1. Age criteria – Most health insurers offer plans with the entry age of 3 months to a maximum of 65 years. Some policies offer lifetime renewal also.

 

2. Grace period for premium payments –  In case of delay in renewing the policy, every insurance company usually allows a grace period of 30 days in case of yearly premium payment mode and 15 days in case of other payment modes.

 

3. Waiting period – Waiting period means the policyholder will not be eligible to receive any of the benefits under the insurance contract till the expiration of the waiting period.

This is to avoid the policy from being misused. In general, every policy has a waiting period of 30 days from the policy issuance date.

In addition to this, some policies also cover certain pre-existing diseases and domiciliary treatments which do not require 24 hours hospitalization after a pre-specified waiting period.

 

4. Free-look period – Free look period simply means that the policyholder has all the liberty and rights to refer the original policy document and cancel the policy without any cancellation charges during that period.

Every policyholder is allowed a free look period of 14 days from the date of receipt of the original policy document to review the terms and conditions of the policy and to cancel the policy if it deviates from what was committed.

 

5. Incentives for maintaining a healthy lifestyle – Insurance companies reward those who opt to live a healthy lifestyle. Giving up smoking, walking regularly, etc. can help individuals stay healthy and get discounts on premiums. Individuals must look for such opportunities and options and maximize the benefit.

 

6. Portability – If the policyholder is dissatisfied with the services of his insurance provider or getting better benefits with some other insurance company or want to change his insurance company for any other reason, he is allowed to switch between HEALTH INSURANCE providers without losing certain benefits such as the waiting period for pre-existing illnesses, no-claim bonuses and other advantages earned in the previous policy.

This benefit, however, can be exercised only at the time of renewal of the policy.

 

7. No claim bonus – HEALTH INSURANCE not only benefits the policyholder when the claim arises but also during claim-free years by providing them “No claim bonus”. No claim bonus can either be in the form of discounts on premium or increase in the sum insured.

However, policyholders should always be careful while filing a claim. The no-claim bonus is payable if the policyholder does not file any claim during the year.

In case, the claim was filed and got rejected for any reason, the no claim bonus will be lost for that year.

 

8. Domiciliary treatment – Some policies cover domiciliary treatments that refer to a treatment of a particular disease, accidental injury or an illness that requires hospitalization however due to various issues, the policyholder could not be taken to the hospital and had to be treated at his/her residence.

The reasons could be many like unavailability of rooms in the hospital, the patient may not be in a condition to be transported to a hospital, etc. In such cases, all the facilities are bought and set up at home of the policyholder.

 

9. Exclusions – It refers to the set of diseases and accidental injuries or treatments that the insurance company does not cover and are excluded from the scope of insurance coverage.

Some of the most common exclusions in HEALTH INSURANCE may include cosmetic treatments, adventure sports leading to accidental injury or death, pre-existing diseases, etc. Individuals must go through the list of exclusions before buying the insurance policy.

 

10. Premium loading – “Premium loading” is the extra premium being charged to policyholders for a higher risk that the insurance company undertakes.

E.g. If a policyholder develops a medical condition after few years of taking the policy and the insurance company foresees a possibility of higher claims both in amount and in frequency then they may increase the base premium of the policyholder to set it off against the higher risk.

 

 

WHY YOU MUST HAVE A HEALTH INSURANCE POLICY?

Every individual must have a HEALTH INSURANCE POLICY for the following reasons.

1. Tax benefits – A policyholder is entitled to tax benefits up to Rs. 25,000/- for self and family and additional benefit up to Rs. 50,000/- for parents under section 80D.

 

2. It protects your savings and reduces financial burden – HEALTH INSURANCE takes care of the major expenses related to policyholder’s future illnesses and medical treatments without depleting their savings or negatively impacting their family’s future financial security.

 

3. Rising cases of health issues – With rising stress levels, the number of health issues has also increased. Working night shifts, extra hours, irregular eating and sleeping habits have deteriorated every individual’s quality of life and made them less immune to diseases.

The number of accidental cases has also increased. With this, the rising cost of medical facilities has made HEALTH INSURANCE mandatory for every individual and the family.

 

4. International cover – International travel insurance insures individuals when they are traveling to other parts of the world. Frequent overseas travelers must have a health cover that covers them internationally.

The cost of medical treatment abroad is very high and not having sufficient cover at the time of an event can cost them more than their cost of travel.

 

5. Protection during emergencies – Many individuals with insufficient savings are deprived of good medical attention due to the rising costs of medical treatment.

Having a good HEALTH INSURANCE not only protects them in times of need but also gives them and their family peace of mind at all times.

 

6. Cashless treatment – HEALTH INSURANCE also provides the benefit of cashless treatment where the policyholder does not have to worry about arranging funds for medical treatment.

The insurance company directly makes the payment to the hospital provided the hospital has a tie-up with them.

 

7. Wide coverage – HEALTH INSURANCE not only covers expenses related to hospitalization but also other charges related to conducting various tests during pre and post hospitalization, ambulance charges, room rent, medicines, etc.

 

8. No claim bonus – Health insurance not only benefits the policyholder when the claim arises but also during claim-free years by providing them “No claim bonus”.

No claim bonus can either be in the form of discounts on premium or by increasing the sum insured.

 

 

WHAT TO COMPARE WHILE BUYING A HEALTH INSURANCE POLICY?

Every individual, before buying a policy, must compare products across various insurance companies based on the following parameters.

1. Sum insured and premium – Sum insured is the maximum amount a policyholder can claim whereas a premium is the price he pays to buy the insurance.

Individuals must always look for the highest sum insured at the least possible premium. However, though lower premiums should be preferred, the reason for the lower premium should not be ignored.

 

2. Claim settlement ratio – Claim settlement ratio indicates the percentage of claims that were honored out of all the claims an insurance company has received.

The higher claim settlement ratio depicts that either their policyholders are making genuine claims which are less likely to get rejected or the company is too generous in honoring those claims.

Hence, the insurance company with a higher claim settlement ratio should be preferred.

 

3. Waiting period – In general, every policy has a waiting period of 30 days from the policy issuance date.

In addition to this, some policies also cover certain pre-existing diseases and domiciliary treatments after the pre-specified waiting period which do not require 24 hours hospitalization.

The list of such treatments and the waiting period should be compared.

Usually, pre-existing diseases and certain domiciliary treatments are covered after 2 years of taking the policy.

 

4. Solvency ratio – Solvency ratio indicates the financial health of the company. The company with a good solvency ratio is always stronger financially and would be in a much comfortable position to settle claims and not find reasons to reject it.

Hence, one should not ignore this factor while comparing the products. As per IRDA, every life insurance provider must maintain the minimum solvency ratio of 1.5.

 

5. Sub-limits – Sub-limits are the fixed amount assigned to particular diseases or treatments or room rent or as a percentage of the total sum insured under the policy.

E.g. Out of the total sum insured of Rs. 10,00,000/-, if an insurance company has assigned a maximum limit of Rs. 1,00,000/- to knee replacement surgery then any amount above that limit has to be paid by the policyholder.

 

6. Co-payment clause – Co-payment simply means that the policyholder has to share a portion of expenses incurred during his medical treatment with the insurance company.

E.g. In case of a policy having a sum insured of Rs. 10,00,000/- with a co-payment of 10%, if there is a claim of Rs, 3,00,000/-, then the insurance company is liable to pay only Rs. 2,70,000/- and remaining Rs. 30,000/- will have to be paid by the policyholder.

Hence, one should look for the policy with the minimum or no co-payment clause.

 

7. No claim bonus – The amount of incentive in the form of no claim bonus differs from company to company.

Hence, one should compare this feature and consider buying the policy offering the maximum no claim bonus for having a claim-free year.

 

8. The maximum life of the policy – A good HEALTH INSURANCE should allow coverage to all its policyholders during their golden years by allowing them to renew the policy for the lifetime. The policy offering coverage until maximum age should be preferred.

 

9. Cashless claim benefits – A good insurance policy should have tie-ups with the maximum hospitals possible for cashless benefit.

 

10. Product features – Optima Restore health insurance policy is a special feature where if a policyholder exhausts his entire sum insured during a policy year, the HEALTH INSURANCE company will restore the base sum insured back for usage for any new illnesses without any paperwork or any extra charge.

Also, some insurance companies offer a free health check-up facility every year.

Likewise, there are many such added features that one should look at while taking the policy.

 

 

DO NOT OVERLOOK THESE PARAMETERS WHILE PURCHASING A HEALTH INSURANCE POLICY

The following are some of the important points that every insurance subscriber must consider while buying a HEALTH INSURANCE POLICY.

1. Opt for adequate sum insured – Sum insured is the maximum amount one can claim under a HEALTH INSURANCE POLICY.

It is important to assess medical expenses that one is likely to incur in the event of hospitalization and take adequate cover for self and family.

One must take into account their lifestyle, medical history of their forefathers, nature of job, stress level, etc.

 

2. Check claim settlement ratio – Claim settlement ratio is the ratio of the number of claims received by the insurance company to the number of claims settled by them. Always choose the company with a higher claim settlement ratio.

 

3. Check maximum renewal age – HEALTH INSURANCE policies will be of more use only when you get older. This is why it is advisable to choose a HEALTH INSURANCE policy that allows renewal until a lifetime.

 

4. Recheck policy form and plan details – Every policyholder is entitled to receive 14 days free lookup period to go through the original policy documents and verify the details.

The 14 days starts from the day the policy document is received by the policyholder.

The scanned copy of the application form is also enclosed in the policy document and it is the sole responsibility of the policyholder to go through every detail mentioned in the form and ensure it is filled correctly.

Any misreporting of personal or health-related information can lead to a rejection of the claim.

Also, the insured must check the plan details and benefits to ensure that it includes what was promised at the time of signing up. Any error or deviation should be immediately informed to the insurance company.

 

5. Take a quick look at fine prints – It may not be practically possible to read all the terms and conditions or fine prints of the policy however, it is advisable to take some time and quickly read through the highlights of various clauses and check important details of the policy.

 

6. Insist on getting the medical test done – If given an option, always insist on getting the medical test done at the time of issuance of the policy.

This will reduce the possibility of disputes at the time of filing the claim since many times, the insurer rejects the claim on grounds of non-disclosure of certain medical conditions at the time of taking the policy.

 

7. Check co-payment clause – Some of the HEALTH INSURANCE policies have a co-payment clause which means that during a claim, the policyholder has to pay a certain percentage of the claim amount while the remaining is paid by the insurer. The policy with the minimum co-payment should be preferred.

E.g. You buy a health cover where the sum insured is Rs. 10,00,000/- with 10% co-pay.

Now, suppose you get hospitalized and you file a claim for Rs. 1,00,000/-, then Rs. 10,000/- will be paid by you and remaining Rs. 90,000/- will be paid by the insurer.

 

8. Check waiting period – Every policy comes with a waiting period. Some policies cover even certain pre-existing diseases and certain illnesses after a specific period.

Hence, it is always advisable to compare the waiting period of various policies while shortlisting them.

 

9. Check the hospital network for cashless facility – Cashless facility is one of the best features of a HEALTH INSURANCE policy. It simply means that the insured does not have to pay any amount to the hospital after taking the treatment and the insurance company directly settles the bill with the hospital.

However, it should be noted that a cashless facility is only available if the treatment is taken in one of the network hospitals specified by the insurance company.

Hence, your preferred hospital should be included in their list.

 

10. Take a policy during a young age – The benefit of buying a HEALTH INSURANCE policy early on is, the younger you are, the lower will be your medical insurance premium.

This is because when you are young, you are healthy with high immunity and less likely to develop health problems and require medical treatment.

Also, another benefit to a policyholder is that the insurance companies are always keen on issuing policies to healthy individuals.

If an individual develops some health issues at any of the later stages of life, then either the premium increases or he can be denied coverage. And nobody would want to be in a situation of having medical issues and not having medical insurance.

 

 

REASONS WHY YOUR INSURANCE CLAIMS CAN GET REJECTED

The following are some of the key reasons for rejection of insurance claims.

1. Withholding or falsifying critical information in the application form – Concealing critical information like your medical history, illnesses, existing insurance policies, etc. while filling the application form can prove expensive at the time of filing the claim and may lead to rejection of the same.

A policyholder needs to ensure that every bit of information provided in the application form is correct.

Hence, they should avoid asking any 3^rd party to fill up the application form and fill it up themselves instead.

 

2. Failing to renew the policy on time – Any insurance company will give their policyholders a maximum of 30 days of the grace period if they fail to renew the policy by the due date. If the policyholder still fails to act, then the policy will get lapsed and any claim arising after that will be dishonored.

 

3. Concealing medical history – The medical history of the policyholder is of utmost importance to every HEALTH INSURANCE company as that could form a basis for their claims in the future.

Hence, anyone withholding such details, intentionally or unintentionally will be construed as a breach of the insurance contract and can lead to rejection of all future claims.

 

4. The disease was excluded from the scope of coverage – The insurance contract mentions a list of certain exclusions. If the claim is filed for any of the events mentioned in the list of exclusions, then the same will not be honored by the insurance company.

 

5. Failing to follow traffic rules – If the accident occurs as a result of breaking certain traffic rules like jumping the signal or driving without having a valid driving license can form the basis of rejection of your insurance claim.

In one of the cases, the pedestrian while crossing the road was knocked down by the vehicle and his insurance claim was rejected for not using the zebra crossing.

 

6. Providing insufficient nominee details – Nominee is the beneficiary in the insurance contract and is the authority for collecting the insurance claim proceeds in the event of the policyholder’s death.

If their complete details like the name, date of birth, the relationship as per the government-issued document like the pan or adhaar card or passport are not updated, the claim will not be rejected though however, the process is most likely to get stuck.

 

7. Causing delay in filing the claim – All claims are required to be filed within 7 to 15 days from the day the event has occurred. Any delay will call for unnecessary complications and justifications from the policyholder and there are slight chances that the claim can even get rejected.

 

 

LIST OF THE MOST COMMON EXCLUSIONS UNDER THE HEALTH INSURANCE POLICY

The following is the list of some of the most common exclusions under the HEALTH INSURANCE POLICY.

1. Pre-existing diseases – If the policyholder is suffering from any of the pre-existing diseases then any claim arising due to the treatment of the same will not be covered under the policy.

Some policies however, cover certain pre-existing illnesses after the waiting period of 2 years but they are subject to various conditions and must be checked before signing up for the policy.

 

2. Pregancy – Expenses incurred towards child birth, pregnancy related tests and other related expenses are generally not covered under a standard health insurance however, there is a provision to separately cover these costs up to a certain limit.

 

3. Cosmetic treatment – Cosmetic surgeries performed to enrich the looks of the policyholder is not covered under the standard HEALTH INSURANCE POLICY. However, such surgeries performed as a result of the accidental injury and if necessary to be done can be covered.

 

4. Suicide or self-injuries – Any injury caused while attempting to commit suicide or performing stunts is not covered.

 

5. Committing a criminal act or being involved in anti-social activities – If any anti-social elements like gangsters, terrorists etc. gets injured while in action then they will be kept outside the scope of policy coverage.

 

6. Damages caused out of an act of irresponsible behaviour – If a policyholder meets with a car accident while driving without holding a valid driver’s license or wearing a seat belt then it is indicated that he is not trained or fit to perform that job. This point will be sufficient for an insurance company to reject the claim.

 

7. Act out of suffering from a mental disorder – Any mentally unfit individual is more vulnerable to self-injuries hence such individuals are kept outside the purview of personal accident plans.

 

8. Participating in adventurous or sports activities – Any injury caused while performing stunts or while participating in adventurous sports cannot be treated as an accident as individuals willfully indulge in such acts. Hence, these events are also excluded from the scope of the HEALTH INSURANCE POLICY.

 

9. Regular health check up – Policyholders undergoing routine health checkup are beyond the bounds of a HEALTH INSURANCE POLICY coverage.

 

10. Dental treatment – Any expenses incurred towards the dental treatment are not covered under a HEALTH INSURANCE PLAN.

For such expenses, separate insurance policies are available that covers dental treatment.