How to select best health insurance policy in India

When gaurav’s father was admitted to hospital for bypass surgery, the estimated cost of Rs 4 lakh was looking very much affordable under Rs 5 lakh family policy provided by his employer, until he was asked to pay Rs 1 lakh from his own, as insurer accepted claim of Rs 3 lakh only.

It was quite natural for him to get upset, after all people take health insurance only to manage the huge hospital expenses. What’s the point of taking mediclaim when you are not going to get full claim? He called up his insurer who replied that it was clearly mentioned in the terms of the policy which has specific Sub limits and co-payment clause. That was for the first time Gaurav went through the features and restrictions of his employer provided health policy.

Then he went through the discharge summary and complete hospital bill and pointed out some mistakes which hospital then rectified and reduced the bill amount by Rs 5000.Had the bill clearance was insurer’s responsibility, Gaurav would not have taken any effort to look at the bill in such detail. It happens. Right?

Such kind of problems generally arises when you take the Health insurance policy just for the heck of buying it, without understanding the terms and conditions. Even if you have group policy from employer still you need to have clear understanding of what is covered

and what not and up to what limit. It’s always better to be prepared in advance and knowing what you are buying and what it covers. It also helps in comparing the policy features and selecting the best health insurance policy which suits best to your needs.

The basic reason of a buying a health insurance policy is to take care of the heavy hospitalization cost. Rest all comes under add-on benefits. Now firstly you need to figure out from the policy terms and conditions that up to what level your treatment cost will be taken care by insurer, if you get hospitalize tomorrow.

Below are the features which will guide you to select best health insurance policy:

• Waiting Periods:

Every policy has specific waiting periods for specific illness. Like in general there is first 30 days waiting period from the commencement of policy for any and all illnesses, except accidents. Then there is waiting period of first 24 months after commencement of policy for specific illness related to ENT, Gynae, Ortho, Gastro etc.

But there are few policies like one as offered by Max Bupa, which has total waiting period of 90 days for all illnesses. Normally group policies also don’t have any such waiting periods.

You should go through the list of the illnesses and be aware of what is not covered and till when. Any policy with less waiting period is definitely worth looking at.

Due to this condition, it is generally advised to take health insurance policy as soon as possible so that you get full coverage in the early years of life. Even NRIs are advised to get this cover 2-3 years before they plan to move back to India, so the moment they land up here they should be fully covered.

• Room Rent Limits:

This is the most important feature, on which your overall claim settlement depends. Many health insurance policies put limit on the per day hospital room rent charges, Like 1% of sum assured or 2% of sum assured. This means, that if your Sum assured is Rs 5 lakh then the per day room rent charges acceptable for claim payment are limited to Rs 5000(1%) or Rs 10000 (2%) respectively.

But practically this limit restricts the total claim payment. If the room rents charged by hospital are above this restricted amount, then your claim will be accepted proportionately.

Visit any hospital and you will find that your treatment cost depends on the room you opt for. General ward charges, twin sharing room, single private room, all will offer you same kind of treatment at different costs. Now if you have mediclaim policy your reimbursement depends on the room rent limit put down by insurer. Let’s understand this with an example:

Your policy of Rs 3 lakhs has room rent limit of 1% i.e. Rs 3000/- per day. You have to get angioplasty done and stay in hospital for 2 days. Different hospital packages are like below:

General ward: Rs 150000 (including Room Rent charges Rs 1000/- per day)

Twin sharing room: Rs 225000 (including Room Rent Rs 3500/- per day)

Single Pvt room: Rs 300000 (including Room Rent Rs 5000/-per day)

Now on the face, it appears that by paying Rs 2000 per day extra you can take benefit of single private room, when the total cost is also coming well within the sum assured limit.

But it’s not like that. As the policy has a room rent limit clause, so the eligible claim amount in case of single private room would be Rs 1.80 lakh ( 300000/5000*3000). Even if you take twin sharing room your eligible claim amount would be Rs 192857/- (225000/3500*3000).

Had there been a hospital room with rental of Rs 3000/- then the actual treatment cost related to that room would be treated as eligible claim amount.

This Limit has one advantage too, as it restricts you from draining out your health insurance sum assured on unnecessary luxury charges. So understanding of this condition is very much important in selecting the best health insurance policy for you.

• Other Sub limits:

Besides room rent there can be other sub limits like on surgeon’s/consultant’s fees, ambulance, costs of blood and oxygen, diagnostic tests etc. There can also be sub limits on the specific illnesses like on cardiovascular disease, renal complications etc.

Star health insurance senior citizen red carpet policy is full of sub limits…maybe that’s why the other features of covering preexisting diseases looks attractive.

Less the sub limits, more manageable and understandable the health insurance policy is.

• Co-payment:

Co-payment means sharing of costs. This co-payment clause can be on any claim or claim related to specific illnesses. If your policy is asking for co-payment let’s say of 20% then you will have to pay 20% of the eligible claim amount from your pocket, along with the other ineligible amount. Max bupa policies have a co-payment clause after 65 years of age, even some nationalized policies have all these clauses.

Normally policies meant for senior citizens have such clause.

• Preexisting diseases:

If you have any preexisting disease while buying any policy you should know that by when that disease will be covered by the insurer. Normally insurers’ starts covering the preexisting diseases after continuous 4 policy years, but some companies offer the coverage much early.

Though the disclosure of the existing diseases is very important in the proposal form, but this is also true that it is completely insurer’s prerogative to accept or deny the coverage. Insurer may accept the proposal with restriction or permanently excluding the preexisting.

In my experience nationalized companies are more lenient insurers, may be due to some social obligation. They do provide coverage to almost every health problem unless it is a chronic one, of course under the waiting period of preexisting diseases.   Private insurers like Apollo Munich on the other hand, are very strict in its underwriting. I have seen Apollo excluding completely anything and everything disclosed under the preexisting columns. But this should not restrict you from disclosing the diseases if any.  Every company has its own way of looking at things and underwriting procedures. Your health insurance adviser helps you in understanding insurer’s experience in covering diseases.

Conclusion:

Generally you compare health insurance policies only on the basis of premium. Employees avoid taking separate cover other than employer provided insurance just due to premium considerations. But to get the best deal, the premium should always be the last thing to watch for, understanding the term and conditions is very important to know the extent of your coverage.

The features mentioned above may have its effect on the premium of the policy too. Like more sub limits or high co-payment may result in less premium as these are restricting the benefits. So to select best health insurance policy, understand and compare the features first and then decide looking at the premium cost. This will help you in finding out the worth of a particular premium payment.

Even claim settlement ratio which is considered one of the important factors while selecting best health insurance policy, should be looked at in the end after filtering the policy with above mentioned features.