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The kind of participation
Government of India has in Healthcare is clear from their budgets for
Healthcare compared to developed/developing countries, especially the European
ones. With the rocketing trend of Healthcare expenditure, there are only 2 ways
you can save yourself from any Health related expenditure killing your savings
in India .
1) Ensure your family lives a healthy lifestyle and pray, that you get no
disease 2) Get a Health Insurance.
Health Insurance, worldwide is the best system having the capability to empower
the common man to use best of quality healthcare at most affordable
prices. While, the healthcare industry in western countries being more
organized abroad has resulted in more comprehensive products out there, the
core Health Insurance products in India
OK, let's get to the point. We are here to unravel the best path to finding
the most suitable product in the market. With more than 25 General Insurance
Companies marketing and selling more than 50 Health Insurance products, with
exponentially higher terms to compare this looks like a tedious task.
Let's give it shot. Here we go:
#1. Cut out the frills. Go Basic:
Most frilled products in India
are not cost effective. A product which takes almost double the median premium,
and offers unnecessary frills, which you dont actually need, is a strict no no.
We have all traditionally lived with routine medical expenses like Consultation
expenses, Dentists bills, Medicine bills, and such costs are therefore
manageable by most of us, unlike a huge hospitalization bill which could eat
way more than a couple of months’ salary or savings.
Bottom line: You should first look
at covering ALL members of your family for the larger “unmanageable” costs,
which could burn a hole in your overall financial planning before signing for
any fancy product.
#2. Don’t Compare Premiums:
While comparing health insurance
policies in india, never start by comparing premiums. Health
Insurance is more than a Mumbai-Delhi Air Ticket, which you can compare and buy
from comparison/aggregator websites. Health Insurance is a long term complex
contract coupled with complex services. This requires insights into the
overall insurance contract (called policy wordings) over and above price
comparison. Either you need to yourself get into comparing the features in
detail, or take help of an unbiased health insurance advisor.
Bottom line:
Understanding the benefits and terms is more important than the cost you are
paying.
#3. Look for Maximum Renewal Age:
Maximum Renewal age is the age on which the coverage on your health
insurance would be discontinued.
This could be for all members or for a specific proposer/member, depending
on product to product. Remember, your core goal, when you buy Health Insurance
is to save yourself from mounting healthcare costs right through your life. A
product, which ceases renewal, while you are still alive and need it more than
any time before, is a BAD product. Sift through all products and find out the
maximum renewal age. Better, look for Lifetime products. Rule out all products,
say, which do not cover your family members for a reasonable lifetime. As
medical science progresses and becomes more accessible to the common man, Life
expectancy in India
will move higher from the current average of around 70. A product with a
lower renewal ceasing age than 70 years is a complete no no.
Bottom line: An insurance product
which does not work, when you most need it, is not insurance.
#4. Look for Treatment wise limits & Copay:
Look for treatment wise limits in the products. Treatment wise limits
basically cap the amount you can claim for a particular surgery under the
policy. Say, there could be limits for Cardiac treatments of Rs. 1.50 Lakhs or
for Cataract for Rs. 20000 per eye. Such limits would cap your claim, even n
when you have a large sum insured under the policy. You need to weigh this in,
before you sign up. Some products I remember are United India’s Family
Medicare, Star Health’s Red Carpet have such limits. Bajaj Allianz General and
ICICI Lombard have a limit only for Cataract.
Another condition, is the COPAY. Copay is basically is the
share of admissable claim that the customer would have to pay from her own
pocket. For instance, if the claim is of Rs. 50000, and the admissable claim is
Rs. 48000. If the copay is 10%, the copay amount would be Rs. 4800. The Total
amount you would have to pay is Rs. 6800/- (Rs. 2000 deduction in the policy +
Rs. 4800 of Copay)
Copay is currently in
- Oriental Happy Family Floater
at 10% of the Sum Insured upto Rs. 5 Lakhs Sum Insured.
- Bajaj Allianz has a copay of 10% for treatment at Non-Network Hospitals in
their Health Guard products, and 20% in Silver Health.
- Star Senior Citizen Red Carpet has a copay of 30%. For Pre-existing the
copay is 50%.
Bottom line: Know what you will not
get paid.
#5. Understand Day wise Cash limit Health Products:
There are some products marketed and sold as Health Insurance (Aegon
Religare Life, Tata AIG General are the popular ones) which provide a daily
cash benefit for the no. of days one is hospitalization. Most surgeries require
an average of 6-10 days, so at the Rs. 5000 per day limit multiplied by 10 Days
would pay Rs. 50000 per hospitalization, irrespective of the actual charges
incurred. An Angiop lasty in this will unknowingly burn a big hole in your
pocket. Please avoid this product for your core healthcare expenditure
risks or as an alternative to a Standard Health Insurance product.
This product is more like an add on cover.
Important Note: Do not confuse the above with products that have
specific limits on Room Rent. Room Rent Limits, to an extent, make sense both
for the customer, as well as the Insurance Company, as they categorize people
paying a higher premium in the higher eligibility bracket. This has been
further discussed in detail below in this article.
Bottom line: All plans which are
called Health Insurance, may not be what you are looking for.
#6. Zero in on a Coverage amount/Sum Insured:
Sum Insured is the total annual liability under the policy. Since this is a
long term product, you should look at the maximum available cover you can
afford. Remember, a sum insured of Rs. 2 to 3 Lakhs will have no value, by the
time you start using it. As per a very recent report on Healthcare in India by Tower Watson, the medical inflation in India is
rocketing anywhere between 17 to 20% annual.
Option of Upgrading Sum Insured: The option of upgrading
the cover at a later stage when you are older is dicey and complicated.
There could be a requirement for a medical test. Moreover, if you or any of the
family members contract a new disease in the interim, the ailment would
excluded for the upgraded amount. Upgrade would be almost like taking a new
policy at that age, which I would not recommend.
Bottom line: Look for the highest cover
affordable. An I-will-upgrade-it-later option may not work.
#7. Premiums change, know how?
Premium in Health Insurance increases as per increase in your age, but,
there’s something about the no. 45. Insurance Companies dislike this no. Have a
look at the rate charts, and you will be surprised to see good jump in premiums
after one crosses the age of 45 yrs. In some cases, the increase in premium is
as high as 50%. You need to factor this, before you sign up 
Ensure premium remains affordable in your retirement days, and does not kill
your hard earned retirement savings.
Note: you need to factor in that these premium charts can change even
tomorrow, like they have changed earlier, but looking at the current charts for
older brackets would get you a flavor of the company’s pricing philosophy for
older age bands.
Note, the average premium in
the chart is the average of premium paid by a person between the age of 30 and
65. The values being compared are only indicative. Future rise in premium due
to loading, change in premium charts have not been taken to consideration.
Bottom line: Know how the premiums change
in the long run.
#8. Credibility, Check.
Look at the history of the company. If it is a new company, you could look
at the history of the promoters and their businesses. Generally, a company or
set of promoters known for their ethics and excellent governance, venturing out
into Insurance would be a decent bet. Get information from your health
Insurance advisor, on the overall claims experience, on
responsiveness, about changes and number of changes in the product, since it
was launched. Too many or too large changes, indicates there could be
more tomorrow.
Bottom line: History in the best teacher.
#9. Products for older age/Senior Citizen family members.
Most Insurers, including the ones ‘specialized’ in Health Insurance resist
covering members above 45 years. Remember, you need to somewhere take
responsibility of not covering your parents, earlier in their life, and not
completely blame Insurance Companies for not covering them, now.
There is no perfect product available for Senior Citizens. All products for
senior citizens are restrictive. You need to settle for a product, best
affordable to you, even if it has co-pay, exclusions and other restrictions.
Again, if your parents have existing ailments, then this becomes more
complicated.
Bottom line: There is no Perfect Product.
Definitely not for a Senior Citizen.
#10. Finally, ensure you have a Good Advisor:
I have always said this, ensure you spend good time in deciding, who is your
intermediary. Once you have taken pain to finalize a good advisor, you are more
than half way done.
A Good advisor is one who would provide:
- Unbiased advice, without any special affiliation to any health Insurance Company.
- Provides Routine services like Pickups, Renewals etc.
- Assists and Guides you at the time of Claims.
Health Insurance industry is witnessing huge changes both in products, price
as well as processes, being an insider, it is sensible to have an expert on
your side, who updates you on changes, their impact on your coverage and
suggest change in course, in case necessary.
Bottom line: Insurance Company have their
own vested interests. Have someone on your side.
Note: There are other terms
& benefits comparable like Pre and Post Hospitalization, Benefits like No
Claim Bonus/Discount, Loading on Premium due to Claims History, 1-2 or 4 year
waiting Period for Specified Ailments, Pre-Existing Waiting Period. These have
not been considered as they do not make a very big impact on the decision to
purchase a long term Health Insurance product in India