In the first article on Health Insurance, we discussed the rationale for buying insurance. Now let us understand the types of Health Insurance / Medical Insurance policies offered in India and how to choose what’s best for you? Types of Health Insurance Plans

• Hospitalization Plans / Indemnity Plans:

These plans reimburse the insured or pay up the hospital directly (Cashless Policies @ Network Hospitals) for cost of hospitalization and medical costs of the insured subject to the sum insured or sub-limits for different treatments specified in the policy.

• Individual Health Plan – Entire sum insured is applicable for single individual

Who should buy? When to buy?

• Anyone who doesn’t have adequate health insurance cover.
• Right after first job till happily single.
• For individuals more prone to diseases (family history), accidents (bikers), they can buy or continue individual policy even after marriage and buy a family floater to cover family.

 

• Family Floater Policy - Sum insured is applicable for a family as a whole

Who should buy? When to buy?

• Earning member of any family that is not adequately covered.
• Right after first job if parents and siblings are not adequately covered.
• Right after marriage. Benefit* by converting existing Individual Health policy to Family floater.

Please Note: SUB-LIMITS may exist for various Non-Major procedures up to certain SI (Sum Insured) level. This means insurance company will pay only up to respective sub-limit amount in case of the specified medical procedures. These sub-limits are usually not applicable for Major medical illness & procedures like Cancer, major organ transplant, cardiac surgeries, stroke, paralysis, brain surgeries etc. (Read policy document for details) Eg. In case of ICICI Lombard complete health insurance, for Annual sum insured of Rs.3Lac, Rs.4Lacs and Rs.5Lacs – following Sublimit applies

Surgeries / Medical Procedure	Sub-Limit
Cataract per eye	20,000
Other Eye Surgeries	35,000
ENT	35,000
Surgeries for - Tumors/Cysts/Nodule/Polyp	60,000
Stone in Urinary System	40,000
Hernia Related	60,000
Appendisectomy	40,000
Knee Ligament Reconstruction Surgery	90,000
Hysterectomy	60,000
Fissures/Piles/Fistulas	35,000
Spine & Vertebrae related	90,000
Cellulites/Abscess	35,000
All Medical Expenses for any treatment not involving surgery/medical procedure	25,000

  For Annual sum insured of Rs.2Lac sub-limits are much lower. However for Annual Sum Insured of Rs.7Lac and Rs.10Lac no sub-limit exists. (Source – www.icicilombard.com)

• Hospitalisation Plus / Top Up Plans:

These plans are affordable options to supplement your Primary Health Insurance Plan with a Rs.5Lac, Rs.8Lac or Rs.10Lacs Top-up cover with applicable deductions^ of Rs.2lac, Rs.3lac or Rs.4lac respectively. ^Deduction means you need to pay the applicable deduction amount (i.e. 2lac, 3lac, 4lac) out of your other existing policy/company group policy and use your Top-Up insurance policy to pay the rest of the hospital bill. Higher the Deduction Amount → Lower the Policy Premium. Who should buy? When to buy?

• Individuals/Families with insufficient existing cover If Existing Policy/Co. Policy provides cover up to Rs.2lacs or 5Lacs, then one can buy:
  • 5Lac Top-Up policy for family of three with Rs.2Lacs deductible at annual premium of around Rs.11,000 (~ Rs.920/- per month) OR
  • 10Lac Top-Up policy for family of three with Rs.4Lacs deductible at annual premium of around Rs.5500 (~ Rs.460/- p.m.)
• Check your family’s total health insurance cover. Right time to buy is the time you realize you’re inadequately covered – Could be today.

• Critical Illness Plans

These plans are defined-benefit based policies which pay a lump-sum (fixed) payment on diagnosis of covered critical illness & medical procedures like heart attack, stroke, cancer, kidney failure etc. Life Insurance companies also offer critical illness plans as a bundled option with Online/Offline Term Life Insurance Plans. General Insurance companies also offer these plans as Add-On option. Who should buy? When to buy?

• Individuals with family history of critical illnesses covered in such plans.
• Individuals with highly stressful lives.
• Anyone who wants to cover themselves against life shattering & wealth eroding critical illnesses.

There are some other health insurance plan categories like Specific Conditions Coverage Plans (Eg. Cancer Care Plans) - These plans are special case of critical illness plans designed specifically to offer health insurance against cancer or diabetes.   In a nutshell:-

• It is imperative to have adequate health insurance protection covering all family members irrespective of your company’s group insurance policy cover. This may not apply for individuals/families covered under CGHS or Railways or Military hospital if they are satisfied with the offered medical care.
• You should contemplate buying an Individual Health Plan / Family floater as soon as you join the workforce depending on parent’s & sibling’s medical coverage situation.
• If your company covers you & your family for Rs.2lacs, 3lacs or 5lacs and you cannot afford paying high premium than you can buy a Top-Up Health plan. However if your organisation’s group plan doesn’t cover all your family members, buying a family floater makes more sense. You should increase the Sum-Insured amount and/or add a Top-Up plan when your salary increases.
• If you lead a very stressful life and/or have a family history of any critical illness, buying a critical illness cover makes lot of sense.
• Before buying any health insurance plan, you should thoroughly read the policy document and understand important Conditions (e.g. sub-limits) and Exclusions (both temporary and permanent).

  In the third and final article on Health Insurance we would shed some light on general health insurance policy exclusions, along with discussing Add-on rider options that one can take advantage of. By Kushal Bhateja Keep learning & sharing!

We often blurt out an old but a true adage, Health is Wealth as friendly advice. Without realising its importance ourselves, the phrase becomes our signature response to one and all. But self-realisation occurs only when life strikes you hard. When on an unfortunate day, either you or a loved one ends up on a hospital bed. The family’s pain becomes worse if they are unable to arrange the money demanded by the hospital. Family members end up taking heavy debt or mortgage property for monetary support. Some resort to redeeming their investments and fixed deposits midway, which could have secured their future expenses for child education, weddings or would have served as retirement funds. Given our fast paced lifestyles, serious ailments (cardiac arrest, liver failure or lung and kidneys diseases) can affect even the healthiest of us all, irrespective of age. Whether in your ’20s or ’60s, you are at equal risk to fall prey to severe diseases. Thanks to our stressful lives! How we wish that we never have to face such a reality that bites. Since future is beyond our control, we ought to be prepared for the unforeseen and ensure that our future plans don’t go haywire or our families don’t go through the ordeal. So, are you prepared to bear the cost of unexpected medical packages that run into lakhs? A medical or health insurance can keep you covered for the rest of your life. You can understand and learn about Medical/Health Insurance through our simple Q & A’s.

1. Q) Why should you get an insurance cover at the earliest? How much does medical/health insurance costs?
2. A) It’s best to get medically insured in the age group between 25-35 years. As the premium costs are low and generally no health check-ups are required by insurance companies at the time of policy initiation. Please refer to the table below* for yearly approximate costs.

  *Premium inclusive of taxes as on 30^th June 2016 for age group 25-35years. Source: Leading general insurer’s website. If you would want to pay 2 years premium, you get 10% discount on the premium amount. Eg: Instead of Rs.7243/- per year, you can pay Rs.13037/- for 2 years for Rs10lakhs sum insured for an adult.

1. Q) Paying premium each year or every 2 years. What works better?
2. A) If you plan to get married, have a baby, or want to increase your sum insured soon, a yearly premium payment is the best option. As any addition to a policy can be only made at the time of renewal.

Otherwise, opt for 10% discount by paying premium for 2years.

1. Q) Do I need medical insurance; I and my family are protected under company’s group health insurance?
2. A) In case you are insured under a company’s group health insurance, it is still vital to have your personal health insurance. A medical emergency may arise at a time when you have resigned from your job (or get fired) or you are on a sabbatical/between jobs. Nobody knows the future.

Scenario 2- If you retire between the age of 55-65years and decide to have a Medical Insurance cover since the Co. group insurance is not active anymore. It might be too late as:

• Insurance company will ask for a thorough medical check-up and exclude the cover for pre-existing illnesses from the Insurance contract. For example - if you have a heart problem, all heart related issues may be excluded.
• Insurance premiums will be too high.

So buy adequate health insurance cover and keep your family & your life savings safe. This is our first article in the trilogy series on Health or Medical insurance. Please visit us again for the next article on types of health insurance products and the best health insurance policies for you. The third and final article will follow soon to discuss exclusions (temporary and permanent exclusions), add-on riders. Their pros & cons and more such relevant information. By Kushal Bhateja