A mediclaim insurance policy ensures that your medical expenses are reimbursed by the insurance company. If you visit a hospital which is part of the network of insurance company/TPA (third party administrator), you can avail of cashless feature wherein the insurer/TPA will directly pay the hospital without you having to get hospital bills reimbursed.
The problem is that Indians start looking for mediclaim when they are in their mid-40s. This is partly because of the worry that even a lifetime of payments does not guarantee that your insurer will give you uninterrupted cover and cashless facility as a senior citizen. As much as 70% of our policyholders have only a Rs1-lakh sum assured.
Health insurance carries complex policy conditions. To know which are the better options you need to know what has been customers’ experience including, claims settlement history and service levels experienced. This is hard for individuals to do. Experts suggest that one should opt for insurance companies that make the least amount of changes in their terms and conditions, hospital lists, and premium charts; it is virtually impossible to find such insurer.
There are quite a few important parameters you must focus on while comparing health insurance policies. They are: the limits on certain treatments, permanent exclusions, waiting period for specific diseases/illnesses, waiting period for pre-existing diseases, co-pay, room rent limits, claims loading, maximum age, network hospitals, day-care treatments, other sub-limits, medical check-up age, pre- and post-hospitalisation costs, etc.
Read the Fine Print: It is important to read and understand policy details to know what is covered and what is excluded. Many policies do not cover pre-existing ailments and conditions arising from them; in some policies, pre-existing diseases are covered after four years. Most policies have a cap on the age of entry for availing a policy. Then there are permanent exclusions like AIDS, cosmetic surgery and dental surgery and temporary exclusions like cataract and sinusitis, which are not covered in the first year but covered later.
Before you choose a particular plan, beware of inexpensive plans as it may be to just entice customers to improve market share. It is important to remember that their prices are subject to change on renewal without consultation with the customer—as happened with Reliance General which was first reported in Moneylife. The true test of the reliability of new players will be two or three years later—when the claims commence.
While choosing a plan, ensure that there is a fair principle behind loading. Loading is the amount charged by the health insurance company on your renewal premium when you make claims on your policy. There are different ways in which loading is calculated by companies: loading for every year of claim; loading dependent on the amount claimed; loading dependent on the claims ratio; loading on certain pre-existing diseases; loading on the age of the person. Select a policy with a clear method of calculating the loading. Other things being equal, companies that do not have loading as part of their policy are the best. Other than that, select a policy from a company where the loading remains constant, irrespective of the amount, and which is withdrawn after some claim-free period—like Oriental’s Happy Family Floater. It is risky to buy a policy where loading is calculated on the basis of the claims ratio as it is going to weigh heavy on your pocket after a claim, for even a minor hospitalisation will result in a very high claims ratio.
Group vs Individual: Since group mediclaim policies, typically, cover pre-existing illnesses as well, those who are employed may feel like avoiding buying separate individual cover, since paying an insurance premium would be an additional expense. This may not be a wise thing to do. The employer group mediclaim ceases, once the individual switches jobs or retires. The individual switching jobs may bank on the group cover offered by the new employer, but retirees have no such luxury. Worse, it would be difficult to obtain an individual cover at an advanced age. While group insurance does cover pre-existing illnesses, the individual policy would come in handy once the waiting period ends, or post-retirement, thus ensuring continuous coverage for the insured. If a separate policy seems unaffordable, you could opt for a super top-up plan.