How to Get Health Insurance if You’re Worried About Coronavirus or Have Lost Your Job

How to choose the right health insurance policy

Even before one starts investing towards one’s goals, getting an adequate health insurance cover for self and family helps.

Health insurance plans are broadly categorised as ‘indemnity plans’ and ‘defined-benefit plans’.

Most financial planners say that having a health insurance plan is the starting point of all financial plans.

Even before one starts investing towards one’s goals, getting an adequate health insurance cover for self and family helps.

Here, we look at the various important features and factors of a health insurance policy that may help you zero-in on the right policy.

Why you should get health cover
According to few studies done in the past, the medical inflation in India is around 17 per cent annually, much above the general inflation level. The need for adequate health insurance is increasingly becoming important and so is choosing the right health insurance plan.

Now, at the moment you might be in the pink of health, however, health insurance is not only about illnesses and diseases. It’s a universal truth that accidents may occur anytime and at any age. A health cover could come handy in such an event.

Further, at times, certain ailments remain unknown to us until their symptoms are visible later on in life. Although, not a mandate, a policy bought at an early age and renewed for quite some years without any claim, may help in better claim experience as and when it arises

See what kind of health cover is required
Health insurance plans are broadly categorised as ‘indemnity plans’ and ‘defined-benefit plans’. While, indemnity plans reimburse the hospital expense, defined-benefit plans pay a lump sum amount irrespective of the actual hospital expense.The ‘indemnity’ plans, which could be an individual health insurance (popularly known as mediclaim or family floater policy), should form the core of one’s health insurance portfolio. Top it up with a critical illness plan which is a defined-benefit plan and thereafter one may add Hospital Daily Cash plan to meet incidental costs during hospitalisation.

See which indemnity cover suits you
Once someone gets convinced that a health insurance plan is a must-have even before starting to invest for life goals, the conundrum to either go for an ‘individual health plan’ or a ‘Family Floater’ (FF) arises. “One should consider an individual plan over a family floater cover if one wants an extensive coverage. This also ensures that adverse experience in one policy does not affect others in the family. Balance sum insured for other members may not be adequate at time in case of a family floater policy,” says Subrata Mondal, Executive Vice President (Underwriting), IFFCO Tokio General Insurance.

The ‘individual health plan’ has to be bought in the name of each individual spouse, children, parents etc. This means, the premium will be as per each individual’s age and respective sum insured. Insurer’s, however, provide a 10 percent discount on the total premium if more than one member of the family is insured simultaneously. In case of a claim by one member, the sum insured of other members remains intact.

In a ‘Family floater’ health insurance plan, more than one member can be covered under the same plan. For instance, both parents and their children can be covered together and only one single premium is to be paid. Under an FF health plan, the entire sum insured can be availed by any or all members and is not restricted to one individual, as is the case in an individual health plan. An FF plan takes advantage of the fact that the possibility of all members of a family falling ill at the same time or within the same year is low.

Estimate how much of cover is required
Although there is no fixed rule as to how much health insurance you should have; the coverage should ideally depend on one’s residential city, history of family illnesses etc. “For people living in Class A cities, the cover amount should at least be Rs 10 lakh given the high cost of living in metro cities. Not only standard of living, medical treatment is also quite expensive in metro cities compared with smaller towns. For people living in Class B and C cities, the sum insured should be at least Rs 4- 5 lakh,” says Mondal.

Check sub-limit in the plan
Nowadays, most health insurance plans have sub-limits in them. Sub-limit refers to capping the re-imbursement limit under each or some of such cost-heads. For example, the room-rent may be capped at 1 per cent of the sum insured. So, irrespective of the total sum insured of the policy, one may have to pay out-of-pocket hospital bills unless one sticks to the limit. Some health plans do not have any such sub-limits while few others offer an option to add sub-limits at the time of buying the plan.See from when pre-existing ailments are covered
All health insurance plans cover pre-existing ailments but after a period of 48 months. Few cover them even after 36 months or lesser. However, at the time of buying, it is equally important to disclose the pre-existing ailment, for a smooth claims settlement process. Further, coverage of certain defined and specific ailments have a ‘waiting period’ of 12 or 24 months, post which they are covered for claim.

Check for co-payment feature
It’s not necessary that there will be a co-payment feature in all plans but in a senior citizen health insurance plan it could be a mandatory feature. In higher age groups as the premium rates are higher, a co-payment may provide some relief in terms of affordability, as it helps to keep the premium low. Some plans, however, ask for as much as 20 per cent co-payment if the treatment is done at a non-network provider or in a city different from where the plan was bought.

What you should do
While choosing a health cover, one should ideally start by comparing plans from 2-3 preferred insurers. Have a close look at the inclusions and exclusions in the most basic plan being offered by them. Do not base your decision solely on the premium, instead prefer simple plans with fewer conditions and restrictions. And remember, every member of the family, irrespective of the age, needs health insurance cover to tide over unforeseen medical exigencies anytime in the future.

How to make a claim on multiple health insurance policies

The total hospital bill need not be shared between the insurers as the claims settlement is not on the basis of ‘contribution clause’.

A policyholder having multiple policies has the right to prefer claims from other policies for the amounts disallowed under the earlier chosen policy,

Not many people hold health insurance policies but some of those who buy it have bought it from more than one insurer. Some policyholders could simultaneously be covered under a group cover.

Holding a policy from more than one insurer would make sense if the coverage, benefits are somewhat different from one another.

“Multiple indemnity policies having identical coverage does not benefit the policyholder, ideally coverage in multiple policies should be mutually exclusive. When buying multiple benefit policies it is utmost important that the second insurer is made aware of the existence of the first policy as that forms a crucial part of underwriting,” says Parag Gupta, Chief Underwriting Officer, Bharti AXA General Insurance.

The health insurance policies such as Mediclaim are indemnity covers i.e. only the hospital bills get reimbursed up to the sum insured of a policy. The other variant of health insurance policies are the defined-benefit policies i.e. the entire sum insured gets paid on the occurrence of the defined event (ailment) irrespective of the hospital bills.

Holding multiple policies: indemnity covers
If someone holds more than one health insurance policy, as a policyholder, the claim can be settled from any of the insurers. It is not mandatory that the policyholder has to approach all the insurers whose policy he or she holds. The claim can be settled from any insurer which the policyholder prefers to go with.

The total hospital bill need not be shared between the insurers as the claims settlement is not on the basis of ‘contribution clause’ which was done away with, a few years back. Under that, the claim had to be settled by all the insurers in the ratio of sum insured of the policies held by the policyholder.

Partly paid by insurer
In case an insurer doesn’t make the entire payment and disallows a certain amount, a policyholder can still approach the other insurer. Last year, IRDAI had clarified that “the policyholder having multiple policies shall also have the right to prefer claims from other policies for the amounts disallowed under the earlier chosen policy, even if the sum insured is not exhausted.”

Exhaustion of sum insured
If the hospital bill exceeds the sum insured in a policy, one may apply for claiming the balance from the other insurer. “If the amount to be claimed exceeds the sum insured under a single policy after considering the deductibles or co-pay, the policyholder shall have the right to choose insurers from whom he/she wants to claim the balance amount,” says M Ravichandran, President, Tata AIG General Insurance.

Which policy to choose
As a policyholder, if you are holding more than one policy, one can ask any one insurer to honour the claim. But, how should one decide as because a claim will have an impact on the no-claim bonus (NCB) and the waiting periods in an existing policy? “Cumulative Bonus is reduced in the same proportion that it increases every year but there is no impact on the waiting period,” says Gupta.

For someone who is also insured under a group health insurance plan, the choice is much easier. “If a customer has one retail policy and a group policy, it is better to claim first under the group policy as there are no accrued benefits like NCB, no claim health checkup, etc in it. Also, group policies would generally have wider coverage than a retail policy, especially related to waiting periods,” says Ravichandran.

How to claim
For claims, insurers insist on original hospital bills and discharge summary. If a policyholder has to make claims from more than one insurer, there could be concerns regarding documentation. Gupta informs, “For claiming from the second insurer customer can submit true copies (self-attested) of documents along with the original settlement letter from the first insurer.”

Holding multiple policies: fixed-benefit covers
Critical illness plans are typical fixed-benefit insurance policies. They come as a rider (with a life insurance policy) or a standalone policy. As per the IRDAI rules, all the claims on multiple fixed-benefit insurance policies have to be honoured by each insurer. “Section 24 of the Health Insurance Regulations 2016 states that in the case of multiple policies which provide fixed benefits, on the occurrence of the insured event in accordance with the terms and conditions of the policies, each insurer shall make the claim payments independent of payments received under other similar policies,” says Ravichandran.

In the case of critical illness plans, the claim is relatively simpler. ” Critical Illness policies are the defined-benefit policies and the claim is payable immediately at the time of occurrence of the illness covered under the policy without any need of submission of hospital bills, informs Atrey Bhardwaj, Head, General Insurance BankBazaar.

Conclusion
As a policyholder, holding more than one policy, disclosure and transparency are important. Make sure you disclose not only material health conditions, pre-existing ailments but also let the insurer know about the existing policies if any.