Tag: Health Insurance

Care health insurance Review – 12 features explained

Posted on by Jagoinvestor

Today I am going to review features of “Care“, one of the good health insurance policies in the market. It was launched few years back and it’s really one of the most comprehensive health insurance products available in the market as on date. So what I will do is, share with you, its features one by one, so that you can know what all it covers, along with few disadvantages in the policy

I digged deeper in its policy wordings and I will explain them in detail, so that anyone who is looking forward buy a health insurance policy can take the decision in a better way by reading this Care review. Here you go..

1. High Sum assured up to 60 lacs is allowed

The sum assured offered by the policy ranges from 3 lacs to 60 lacs. Gone are the days when 2-3 lacs of sum assured was sufficient. Now it’s very common to see people buying a cover of 10-20 lacs. Many people even want to go for a cover of 30-40 lacs also and there are very less options right now if someone wants to buy a high enough health cover. Care gives you an option to buy up to 60 lacs of health cover, and the best part is the high cover comes along with added benefits which we will look very soon

2. Single Private Room (no rent limit)

If you choose the sum insured of more than 5 lacs, then you are eligible for a single private room. The wordings in the policy is of “Single private room” and not some percentage of sum assured.

Most of the policies cap the room rent limit, however this policy caps the room type. Here, if the user takes a room higher than the type eligible he still is required to pay the difference of the room rent as well as all other expenses which increase due to choosing of a higher room type

I love this point especially because room rent limit is such a critical factor while calculation of your claim amount, you can read how room rent limit affects your claim process if you choose the room with higher rent

3. Cashless treatment in network Hospitals

Care has a network of around 4,100 hospitals around the country. If your hospitalization is planned after few days, in that case, you don’t have to shell out any money from your pocket. You can choose to take cashless treatment and the bills will be settled by the health insurance company directly to the hospital.

This is not a special feature in Care. It’s present in almost all the health insurance policies these days. But I thoughts it’s a good mention in this article as we are looking at all the features. Also, note that cashless treatment is an additional benefit which helps a customer. You can always choose to not have a cashless treatment and pay the bills yourself and settle the claim later by submitting the bills. In case of emergencies, you anyways can’t choose cashless treatment.

4. FREE Health Check each year

You also get free health checkup’s facility every year for all the adult policy holder’s lifetime!. There are no terms and conditions for this. Just that the facility is there only for sum assured of more than 5 lacs. Also, the number of health checkups depends on the sum assured amount. You get more detailed checks done when your sum assured is high.

I have realized that a lot of people do not spend their own money for regular health checkup’s, so in a way it’s a great feature in the policy, due to which one will form the habit of regular checkup’s and will be informed about their health issues.

Each year you just need to contact the company and express your desire for the health checkup and they will schedule it for you in one of the centers they have tie-up with and which is also near your house. You can choose the timings and place as per your convenience. You can collect your health reports after 24 hours of the checkups. It’s a really great thing offered by any company.

Below is the health checkup list for various kind of sum assured slabs as per their brochure.

Care review - free health checkup

5. Restore of sum insured up to 100% amount

The policy has a feature called restore. In this feature, if there is a large claim in the policy due to which the sum insured is exhausted or reduced substantially, in case of a subsequent unrelated claim, if the sum insured falls short to pay the claim, the policy reinstates/restores to cover to 100%. Let me explain that in detail.

Let me give an example

Suppose you have a 10 lacs sum assured. Now due to some heart-related issue, you were hospitalized and the expenses were Rs 4 lacs. So your remaining sum assured is 6 lacs. You can utilize the 6 lacs sum assured for any purpose.

But if some another hospitalization comes up for an unrelated claim, and the expenses are more than your remaining sum assured, then your sum assured will be restored to the full amount of 10 lacs. Even your other family members can avail for the full sum assured even for the same illness. Note that in case of family floater plan, it’s highly beneficial because even the other family members can take benefit of full sum assured for the same illness.

6. No claim bonus up to 50% of sum assured

No claim bonus is a very simple concept, where you get rewarded if you don’t have any claim in a year. In Care, your sum assured gets increased by 10% of the base sum assured if you do not claim in a year and keeps increasing upto 50%. Which means that if your sum assured is Rs 10 lacs, then if you do not have any claim in a year, then next year it will increase by 10% (10% of 10 lacs) , and your sum assured will become 11 lacs . Again if you do not have any claim in the next year, it will increase to 12 lacs and so on..

So your cover of 10 lacs can go up to 15 lacs maximum if you do not claim for 5 yrs consecutive. A lot of policies (like Oriental Happy Family Floater), they reduce the premium by some percentage as no claim bonus and many people are happy about that, because that means less money going out of their pocket. But truly speaking what you need is the increase in sum assured, not a reduced premium, because every year due to inflation and rising medical costs, you need higher sum assured.

I don’t see a big benefit in saving few thousand or hundreds in premium in the name of no claim bonus.

Super No-Claim Bonus

This policy also gives an additional benefit called Super No-claim Bonus which will cost you extra premium if you wish to take it. In this super no claim bonus facility, your no claim bonus will be 50% extra each year up to the maximum of 100% of sum assured.

What that means is that if you do not have any claims, then within 1 yr, your sum assured will increase to 1.5 times and in 2 yrs, it will double. So if you have a policy of 5 lacs sum assured, then

  • Sum Assured in first year – 5 lacs
  • Sum Assured in 2nd year (assuming no claim made in previous year) – 7.5 lacs
  • Sum Assured in 3nd year (assuming no claim made in previous 2 years) – 10 lacs

And this super no claim bonus is over and above the no claim bonus which you anyways get in the policy. So truly speaking your sum assured can increase anywhere from 60% to 150% in some years if you take super no claim bonus option while purchasing the policy. At the time of applying for the policy itself you need to mention that.

Care review - super no claim bonus

7. Around 170 Daycare Treatments covered

The policy covers around 170 day care treatments (In-patient treatments) , which are mentioned in the policy document. A lot of times you don’t need to get hospitalized for many days or even 24 hours. Some treatments can be done in just few hours. You can get admitted in morning and get things done by the evening or just few hours.

Even these kind of in-patient treatments are covered in the policy. A common myth is that you need 24 hours of hospitalization to claim your health insurance benefits, but it’s not true. Many years back when health insurance was a new thing in India, it was probably true. But not anymore.

Below is a snapshot of the policy terms and conditions pdf and you can see some of the day care treatment names mentioned. There are total of 170 treatment names listed in the document.

Care day care treatments names

Please do not confuse these day care treatments with OPD. OPD treatments are not covered in any health insurance policies

8. Second Opinion and Organ Donor Cover

If there are any expenses which are incurred on the organ donor, then even those expenses (along with hospitalization expenses) will be covered in the policy. The limit for this expense ranges from Rs 50,000 to Rs 3 lacs depending on the sum assured. A lot of times, in critical cases, if there is any organ which needs to be replaced and you get any donor, then you will not have to incur the expenses from your own pocket due to this feature. While this is an extreme care, still we should appreciate that the policy takes care of this point.

Also the policy has a feature called “Second Opinion”. In this, if any of the policy-holder is diagnosed with a critical illness, then the company will arrange a free discussion with a qualified medical practitioner for you. This is great feature, because a lot of times, you want to consult another doctor before taking a big decision like surgery, operation or any hospitalization. The policy lists down the critical illnesses for which you can take second opinion. Note that the second opinion facility is only for sum assured above Rs 5 lacs.

Below are the critical illness mentioned in the policy

  1. Benign Brain Tumor
  2. Cancer
  3. End Stage Lung Failure
  4. Heart Attack
  5. Open Chest Coronary Artery Bypass Graft
  6. Heart Valve Replacement
  7. Coma
  8. End Stage Renal Failure
  9. Stroke
  10. Major Organ Transplant
  11. Paralysis
  12. Motor Neuron Disease
  13. Multiple Sclerosis
  14. Major Burns
  15. End Stage Liver Disease

Each member of the policy can avail the second opinion facility for each illness every year if required.

9 – Avail Medical Treatment anywhere in world

If you have opted for sum assured of 50+ lacs, in that case, you can avail the medical facilities through the world, where-ever you wish to , but it’s limited to only 5 major illnesses. Also, the benefit is available only on reimbursement basis only. Means you first have to spend the money from your pocket and then claim it back later. So I think this will mainly be helpful for the high net worth individuals and not to the middle class. Anyways a good feature, because some people might look forward to this.

10 – Pre and post hospitalization expenses

The policy also pays for any medical expenses related to the claim before and after getting admitted to the hospital. It covers 30 days of pre-hospitalization expenses and 60 days of post-hospitalization expenses. A lot of times a big amount is spent before and after the hospitalization in medicines, checkup’s and other things. It’s very important that a policy takes care of these facts. However, note that this is a basic feature, and almost all the policies in market gives this benefit.

11 – Domiciliary Expenses Covered

The policy covers the medical expenses incurred on the home treatment. A lot of times a patient is not in the condition to the hospital, in which case the treatment can be done at home. The policy will pay upto 10% of the sum assured in this case. The condition to avail this offer is that

  • The patient is no in condition to be moved to hospital
  • OR, there is non-availability of the room in hospital

Note that there are many illness for which the domiciliary expenses cannot be claimed, please check that list in the brochure of the policy.

12 – Lifetime renewal and no restriction on entry age

Once you buy the Care policy, you can then renew it lifetime. This is one of the most important points one should remember while buying any health insurance policy, because you buy the policy looking at a very long-term and not just for next few years. The policy should be able to help you when you are in your late years, because that’s when you really need it badly.

Also, there is no limit on the maximum age by when you can renew it. On top of it, even the entry is not restricted due to age factor, a person can buy the policy at any age, provided they fulfill the health checkups and the restrictions by the company.

Waiting period of 4 yrs for pre-existing illness

Under this policy, any pre-existing illness will be covered only after 4 yrs of taking the policy. This is a common exclusion in almost all the policies. However if you are a senior citizen, then the coverage for that particular illness might be excluded permanently, because once you cross the age of 60, the chances of you getting hospitalized due to that particular illness is high and it does not make any business sense to cover it.

This is precisely the reason why one should take their parents cover as soon as possible, especially before they cross the age of 60 yrs. Apart from the pre-existing illness, a lot of illness have their own waiting periods from 1-4 yrs, which is a standard thing in any kind of health insurance policies. Also nothing other than accidental hospitalization is covered for the first 30 days of taking the policy. I suggest you read this article which talks about exclusions in mediclaim policies in detail.

Other Points

Below are some other important points one should be aware about

  • If your sum assured is more than 5 lacs, then there is no sub-limit on the ICU charges, Doctors fees and Medical fees.
  • The policy provides ambulance expenses ranging from 1,000 to 3,000 depending on the sum assured
  • There is no age limit of buying a new policy. Anyone can buy the policy at any age, just the minimum age requirement is 91 days for family floater and 5 yrs for an individual policy.
  • Maximum 6 people can be covered in a single family floater plan
  • The policy like every other policies in market does not offer any dental care treatments
  • This plan does not cover maternity expenses, but that’s ok. Don’t over focus on this point, as it’s something you can take after yourself
  • You get 7.5% discount if you renew/buy the policy for 2 years and 10% discount of payment of 3 yrs in one-shot.

Disadvantage of Care Policy

Let me mention some the problem and disadvantages of the policy.

1. Average policy, if sum assured is less than 5 lacs

A lot of features are applicable in the policy only when the sum assured is more than 5 lacs, if you want to take a lower cover like 3 lacs or 4 lacs, in that case, Care is an average policy and not the best.

2. Room type capping

You already know that the policy caps the Room type instead of room rent. This was a good advantage also, but at the same time, this can be a disadvantage also. In this case, suppose the room type which your policy allows is unavailable, then you will have to go for some other type of room and in that case you might have to suffer the reduced claim amount. You are tied-up with a particular room type only.

Suppose there is some other policy, which caps the room rent limit at 1% of sum assured and imagine that your sum assured is 10 lacs, then you are eligible for any room with rent of up to 10,000 per day. In that case, you can choose either a single room without AC, with AC or a premium room. It’s totally your wish as far as the room rent is below 10,000. But in case of Care, if suppose you are eligible for a single private room whose rent is 6,000, and the next category of room costs Rs 9,000, then you can’t go for the Rs 9,000 room . You can surely take it, but then your claim amount will get affected. So make sure you think on this point properly before you buy the policy.

It’s totally your wish as far as the room rent is below 10,000. But in case of Care, if suppose you are eligible for a single private room whose rent is 6,000, and the next category of room costs Rs 9,000, then you can’t go for the Rs 9,000 room . You can surely take it, but then your claim amount will get affected. So make sure you think on this point properly before you buy the policy.

I suggest that you also compare Care policy with some other policies like Max bupa plans or Apollo Munich Optima Restore and then take a final decision.

3. Co-payment of 20%, if policy taken after 60 yrs of age

If at the time of entering the policy, the age of the policyholder is more than 60 yrs, then a 20% co-payment will apply. Which means that the policy holder will have to bear the 20% bill amount and only 80% will be paid by the company. But if you enter the policy before 60 yrs, its not the case.

Hence the policy becomes unattractive to senior citizens who are looking for health insurance. In comparision a policy from L&T insurance is better where 10% co-payment applies after the age of 80 yrs. The policy from Max Bupa called Heartbeat, does not even have the concept of co-payment. So the policy from Care scores low on this point.

Premium Chart for Care

Below I have listed down the premium amount 5 lacs sum assured, for various age range with two cases of a single person insurance, and another one is a family floater policy with 2 adults and 1 kid. You can check how the premiums will rise over the years when the policyholder will move to various age slabs. Note that now there is no claim based loading in the premium. Now as per new guidelines of IRDA, a policy premium increases when the policyholder moves in a different age range.

Care health insurance premium chart

An important point to note in the premium chart about is how the premium is very less in the initial years, when you are below 60 yrs and how it increases when you become a senior citizen :), which is quite natural and explanatory. Also you should not be shocked to see these high premium values in today’s time, because these are all future values, and even though today these premium values might look big to you, but when you turn 60 or 70 yrs, at that time these premium values will look very normal to you.

Snapshot of the Care benefits

Care policy features snapshot

Do you want to buy the Care policy?

If you want to buy the policy or want to enquire about it, then just fill up the form below and you will get a dedicated phone call to help you choose the policy and explain you.

I hope you have got a fair idea about the policy. Note that this Care health insurance review is mainly for educating you on various features of the policy. Please check other policies details and make sure you choose the policy which suits your requirements.

Let us know what are the points you liked best about Care and which point you didn’t like ?

EDIT : This is not a paid review. We have started d0ing review’s of various policies and we will do review other products as well. This is just a point by point explanation of each important point in the policy. Also, we have added the disadvantages of the policies, not just positive’s. Care is definitely not the best in market in all respect, but a very good policy considering most of the profiles. Please see the article more as an attempt to help a person understand what all policy provide’s its customer.

Buying Health Insurance in India? Follow this 13 point checklist

Posted on by Jagoinvestor

A lot of changes has happened in health insurance industry over last 5 yrs. The overall health insurance industry to some level is standardized and new regulations are in place. A lot of investors have bought their mediclaim policies many years back when rules were raw and when few things were in favor of insurers, not investors.

buy health insurance in india

Given the changes, I thought, it’s the time to edit the whole article written long back and update all the points. So here you go.

Health Insurance products now have far fewer hidden bombs to surprise you now, For instance

  • All Health Insurance policies are now mandatorily issued for life-time.
  • Insurance companies cannot levy claim based loading once the policy is issued.
  • Insurers need to give a clear 3 months advance notification to existing customers before increasing premiums or terms in a policy.

What’s more, thanks to the competition brought in by specialized health insurance companies, there have been many interesting features added to the otherwise standard mediclaim products.

So now I am putting up 13 points every investor should read before they buy health insurance. These 13 points can act as the guide for someone who wishes to either buy a new health cover or wants to upgrade their health insurance cover. These points are not tips as such, but various dimensions revolving around the health insurance buying decision-making.

Point #1 – Don’t be too late in buying a health insurance policy

I have seen too many customers, especially the well-educated ones, literally trying to find a health insurance product which has all the “dream” features bundled into a single product. They want high cover, less premium, best claim settlement, no loading, OPD cover, extreme fast claim settlement, maternity and high-end benefits.

But sadly, such “dream” products do not exist in real-world. One has to understand that these health insurance products are highly complex and their premium pricing and features are linked to various parameters. You can’t get a product which has everything you wish.

At times, it happens that 8 out of 10 things required by the customer is present in the policy, but 2 out of 10 is not there, and what do customers do? They try to find some other policy which has all 10/10 things covered. This just leads to procrastination. There are millions of investors who are delaying taking health insurance from many years and this is the single biggest mistake one can make.

The risk of “No cover” in the future

The biggest problem with this approach is that, you might be denied a cover later in life, because you might have crossed that age limit, or you might have catched some illness which will not be covered now.

If there is one advice, just one advice, I would give anyone on Health Insurance. It would be this – “Never Delay. Set a deadline, buy that policy and get covered.”

Buying a good enough policy early is 10X better choice than buying “best health insurance policy” after 5 yrs. So the first thing you need to do is, be 100% clear that you are buying a health insurance product NOW. Focus on core big features which really matter, and don’t get too attached to tiny points which either do not match your requirement or are different than what you want.

Point #2 – Assess who do you want to cover and their health status

It is important to finalize the list of people you want to cover. Also, take an account their current health status. Make sure you cover most of your family members for whom you are responsible for. At times, people buy health insurance for self, spouse and kids and ignore parents.

  • If all are young and healthy, no hospitalization history, no chronic ailment detected, you are going to be spoilt for choice!
  • If you have members who are above 50 and/or have a medical history/condition then you should be prepared for some pain (more on this later) which will most probably include having certain time bound exclusions in your policy. Or you might have to pay higher premiums.

Point #3 – Assess your lifestyle

The greatest health insurance is taking care of your health. Keep a check on your own lifestyle, as well as your family’s. If you/your family is fit, following a healthy routine or regularly exercising, have healthy food habits, doesn’t smoke, has no history of excessive drinking, you’re in a good place with regards to risks and coverage required. If not, then you have a much higher risk to hedge. This, apart from inflation, needs to be taken into consideration, when deciding the sum insured.

If not, then you have a much higher risk to hedge. This, apart from inflation, needs to be taken into consideration, when deciding the sum insured. But be clear that just having good health or good lifestyle is not an excuse to ignore health insurance policy. Leading a good lifestyle just protects you from illnesses, you still don’t have much control on accidents, or some diseases which can still happen even though you have a good lifestyle.

Point #4 – Individual Covers or Family Floater?

You also need to be clear if you want to buy individual cover for each person, or a family floater policy?

Family Floaters seem to be a no-brainer, as they are very efficient. The idea is that not all family members will be hospitalized in the same year. You get a large cover shared amongst all family members for one of you to claim. The price is lower/efficient than buying individual covers.

But hold on! .

If one of your family members is older than 50, or has health issues, or lifestyle issues as discussed earlier, it would be sensible to look for an individual cover for such a member in addition to the family floater. You shouldn’t have a “high risk” member as part of your family floater, as if he/she has frequent claims, year-after-year, other members could be left without any cover, when they would need it.

individual vs family floater health insurance

If you don’t have the choice, and are getting a great deal with a family floater policies then go for a very high cover (in the range of 25-30 Lakhs). More on this in the next point for discussion.

Point #5 – Zero down on Sum Insured from Long Term perspective

The biggest mistake one makes when buying Health Insurance, is when one factors today’s costs and decides the insurance coverage, whereas in reality, you are likely to make claims around 25 years from now

Hospitalization costs today would be ranging from Rs. 50000 to Rs. 3 Lakhs. Assuming you are 30 today, at an modest average healthcare inflation of 7.5% for the next 20 years, single hospitalization bills will range (hold your breath!) at around Rs. 13 Lakhs when you are 50 years old.

What’s more, if you live even a mildly unhealthy lifestyle(as discussed earlier), you may have to bump the cover by another 25%, as you are at much higher risk, unless you take things in control and improve your lifestyle immediately. Think in terms of the long run, you may not need this policy right away, but in the future, you will most definitely benefit from having a higher cover.

OK, don’t sweat; we have smart ways on how to get a Rs. 16 Lakhs within your budget. Read on.

Point #6 – Compare Hospital Room Eligibility Capping

Now this is the big one. This single condition could depreciate the value of your health insurance with inflation. Something most agents/insurers won’t like you to know.

Many Health Insurance policies have room rent capping, which means you are eligible to claim expenses only up to a room costing below this capping. In case you opt for a room above this cap, you will have to bear the additional proportionate expenses on your own. Let me give you an example

Lets say, as per your policy you are room rent limit is Rs 4,000 per day . Now if you get hospitalized and you choose a room (for if you are forced to choose) which has room rent of Rs 10,000 . You might think that you will just get 4,000 per day for room rent from insurance company and other charges you will get as per the limit. But thats not true.

In reality, your room rent limit is 40% of the room rent chosen, hence all other expenses will be paid by 40% margin only. Means if your actual bill for ICU has been Rs 20,000 , and even if it’s in the limit, you will still be paid just 40% of 20,000 = Rs 8,000 .

If your doctors bill comes to Rs 50,000 and even if it’s in the limit , still you will be paid only 40% of that, which is Rs 20,000 . So overall you will be at a big loss only because of the room rent capping limit.

room rent capping

I hope you are now clear on the implications of the room chosen at the time of hospitalization.

Also factor in the inflation

One day rent for a Private room averages to around Rs. 4000 per day, today. At an inflation of 7.5% for next 20 years, the room rent would be in the range of Rs. 20000 per day.

Now, if you have a policy with room rent capping of Rs. 5000, and you opt for a private room with rent of Rs. 20000 per day. Insurance company is liable to pay you only 25% of all the costs claimed by you, in spite of your claim being within the sum insured limit.

Given a choice, your preference of health insurance should be in the following order:

  • Policies with Private Room eligibility.
  • Policies with No Room Rent capping.
  • Policies with Room Rent capping.

You must be surprised as to why have I suggested Private room eligibility policies above policies without room rent capping. The reason is simple, in my opinion; policies with no room rent capping have larger chances of being abused. Insurers could bear higher losses due to no control over the extravagance of a few customers. In the long run, it would be consumers who will pay for such extravagance of a few, through higher premiums or revision in the terms of the product, so that the Insurer can contain the overall losses.

As mentioned earlier, the above priority is to be kept in mind, in case you have a choice. In case you don’t (due to health conditions, age etc.) it is important to not give up and hedge your risks to the extent possible, by opting for a sum insured with the highest room rent limit. This way you will be able to contain some part of this ‘auto-depreciating’ cover!

Point #7 –  Check for any sublimit/co-pay

There are clauses like sub-limits and co-pay in most of the insurance policies. They put a sub limit on a particular expenses (like 2% of sum assured). Make sure you are very clear about them and are fine with it.

There are few Insurance products that have limits for specified surgeries also. So even if your sum assured is Rs 5 lacs, they might restrict a particular surgery expenses to 50% of your sum assured.

co-pay clause policy

Check with the products you have shortlisted. Also check for words like “limits”, “co-pay” or “deductible” in the policy. These are set deductions in claims. Ensure you have understood, and compared what these mean, before your decision to purchase is made.

Point #8 – Hospital Network is Important Parameter

While you compare the key features discussed above, you should also compare the hospital network of the shortlisted Insurance companies. You must compare these for areas you/your family is likely to be hospitalized. Though such lists are dynamic and can change anytime, it still gives you a good idea of the network that the Insurer has in place, in case you need to use it for a cashless treatment.

Check it out below to see the number of hospital and their names near your house (based on the pin code you provide them)

hospital network health insurance

While a good network of hospitals is something you should definitely look at, but it should not be your primary parameter to judge a health insurance company.

Point #9 – Finally, go through Policy Wordings

Ask your Insurance Broker/Agent to provide you with the policy wordings of the product you have liked. Ensure you go through the Customer Information Sheet yourself. This is a one-pager that summarizes all the key conditions you must be aware off. Every health insurance product needs to file this with the Government (IRDA). Ask questions till you are satisfied.

I would strongly suggest look at the policy document sheet yourself online. Just go to google and search for “<health insurance policy name here> + “brochure pdf” and you will surely get the PDF document online. go through it and read it. below you can see, how I searched for Appolo Munich Optima Plus brochure online

health insurance brochure

Point #10 – Go for Super-Topup

In order to get the 15-17 Lakhs health insurance cover that would inflation proof you for the next 20-25 years, it is very sensible to buy a Super Topup policy. Recommend, that you go with a Rs. 5 Lakhs base cover with a Super Topup cover of Rs. 15 Lakhs. This can save close to 25-30% of premium vis-a-vis buying a Rs. 20 Lakh base plan.

2 important things here

  • Ensure there is no room rent limit in your Super Topup policy.
  • Ensure you buy a Super Topup Health Insurance along with your Base health Insurance policy tenure and they have similarly timed renewal dates.

health insurance super top up

You can read how super top up works in this article .

Point #11 – What to ignore while buying a policy ?

Now that you know what you must compare and consider, you must also know what to avoid?

Features like Ambulance, Daily Hospital Cash, Domiciliary, and any other benefits that don’t get used often, have a low consequence in the overall scheme of things. Hence, in my opinion, these should be overlooked, so that you focus on the bigger covers.

So focus on the network of hospital, fees for doctor consultation, Room rent Limit, ICU charges, Check if they are paying for medicines or not and these kind of expenses which make the the major part of your overall bill.

Things like Ambulance charges are not more than Rs 2,000 , if you have to pay it from your own pocket, even that its totally fine. Why to choose a policy based on that parameter ? Its always a bonus advantage and nothing else. So learn what to ignore and what to look at.

Point #12 – Ensure you appoint a good advisor

By now, you may have realized Health Insurance is a complex product and a good amount of research has to happen (but do not over do it). It is therefore recommended that you appoint a health insurance expert to help you shortlist products, explain the terms, answer your queries etc.

You even need a post-sales services like claim assistance and helping you out in co-ordinating with the health insurance company if you are stuck. If you find yourself a policy through an Insurance Broker, if required, he/she may also be able to help you through dispute resolutions with Insurers, in the long run, if any.

Let me show you an example of a claim rejection case with Max Bupa (company was right in rejecting the claim) . One of the readers among you had bought a policy through Max Bupa (through some individual agent, not broker) and he bought two different policies for himself and wife . He wanted a maternity cover and the agent told him that its covered in the policy. It was even written in the policy document, but it was clearly written that both husband and wife have to be in a single policy (floater policy) . But agent and client both didnt pay much attention to it.

And after 4 yrs, company rejected the case based on their terms and conditions (the claim itself was not valid) . Below you can see the scanned letter which company had sent to the client. Here company was correct in rejection of claim because client wanted something which was never covered in the policy. However if had paid more attention or had a great advisor on his side, he might have been informed in a better way.

claim rejection example

Remember that unlike Life Insurance or many other policies, Health Insurance could have repeated claims through yours or your family’s lifetime. It is therefore important to have someone who can hand-hold you through the tedious paperwork and the otherwise time consuming processes of Insurance companies.

In the cases where you want to cover the family members who are above 50 and/or with pre-existing disease, it makes a lot of sense, to go through an insurance broker who deals in multiple insurance companies. Out of sheer experience, the broker will be able to help you zero down to few Insurance companies who are liberal. This will help you avoid the pain of doing medical tests with Insurance companies where chances of getting a policy are very low.

Point #13 – Review your existing policy and look at options to Port

If you have an existing policy which does meet the above mentioned 12 points, and you are still young and healthy, I would recommend you to look at porting your mediclaim policy to a better company around 2 months before your next renewal.

Unfortunately, if you have already made claims in your existing policy, or have any chronic ailment to declare for any family member, the chances of portability are very dim. I would then recommend you look at upping your cover with the same insurance company, and look for other options (like Super Topup) by which you can hedge the negatives in your existing coverage.

Buy your health insurance company NOW !

I recommend that you at least start looking at various options and take your decision quickly. That’s all folks. If you have any questions, comments, feel free scroll down to post your comments. Happy to help.

Are you suffering from “I don’t have time to read Policy Document” Syndrome ?

Posted on by Nandish Desai

As an investor, I am sure you have done something with your money. You have put your money in some or the other financial product – assuming it is going to help you in creating wealth or it is going to help you in some way or the other.

The way some movies have flashback, you will have to go back in the past to get full value from today’ article.  We just want to make you responsible in the area of money, because taking responsibility is the first step towards bringing any kind of change or transformation.

policy document

Lets go back in the past (Flashback)

Lets say five years back some agent or adviser or relationship manager approached you with the new financial product in market, the product features and benefits were explained, you trusted your adviser’s advice and bought the financial product.

Now, before you purchased the product – Did you read the product brochure (completely) at the time of buying or even after that ?

Most investors do not invest their time in reading product brochure or policy documents and this is a major mistake most investors are not even present to.

4 reasons, why Investors do not read Policy Documents

Reason #1 – They find it boring to read Policy Documents

A lot of investors think, that reading personal finance document is extremely boring thing (its just their assumption). Some investors start yawning the moment any policy document is placed in front of them. If you ask them for a movie, they are filled with enthusiasm – but if you ask them to read policy document or mutual fund scheme document they start avoiding the same.

In this process, you may miss out on some important information which you are suppose to know about some particular financial product and it will save you from disappointment later in future.

We come across so many investors who don’t know whether the money they have been investing from last 5 years is an endowment plan or a money back, the mutual fund they have been investing is an equity fund or debt fund. You carry boredom in your thoughts and it has nothing to do with any personal finance document.

Come on – Its a one time job, which takes not more than 1 hour, that’s all !

Reason #2 – “It’s not my cup of tea” Syndrome

A lot of investors think – “Personal finance is not my cup of tea” and they feel they have licence to NOT read policy documents. You may be into medical profession, Software or any other profession.

You can’t escape from managing your financial life and reading your policy document is one core activity you need to complete.

Reason #3 – They over-trust their Adviser and prefer playing Blind Game

Some people trust their adviser much more than they trust their spouse or parents. They trust their adviser blindly. Their adviser will make cross marks on documents and then give investor the bulk offer to give their signatures, as if they are giving autograph to the crowd. And then this kind of fraud happens with investors.

These investors are playing blind game, they are taking risk with their financial future. Even when the policy document or any other financial product is purchased, they do not bother to read where they have invested their money.

All they do is call their agent and take a monthly or quarterly report which gives them a fake feeling that they are serious about their financial life. You are getting reports, but for all wrong financial products which does not serve you as an investor. You can trust your adviser – but do not skip the homework that you are suppose to do from your side.

Reason #4 – They entertain the story called “Lack of time”

When we ask a lot of investors that why they did not read policy documents or product brochures the most standard reason that pops up is “Lack of time”. From morning till night, they slog for money, which they put into a financial product and then they do not have time to read about the financial products itself, where they have invested their money.

Now how strange it that !

These people are found very active on social media platforms. By the way – I am not against use of social media, but the point I am trying to make is that, you should give time to your financial life and break the “lack of time” story.

Conclusion – Never skip reading Policy Document

This insight or tip might look very simple, but it is applicable to majority of investors. As an investor you will make money only in those products – where you have the understanding. Your primary job as an investor is to understand basic mechanism of any financial product in which you are going to put your hard earned money.

My invitation to all investors is read product brochure and make list of questions that arise in your mind and get 100% clarity on them.

So, dust all your laziness and read the product brochure, before buying any financial product and if you have already made any purchase make sure you read the policy document in detail.

So, this weekend do the following

  • Place 2 hours on your calendar, in which you will read policy documents (put the reminder in your mobile at this moment itself.
  • While you read policy documents if you are not clear, make a note of them and discuss with your advisor or customer care
  • Share with us what was your experience in the comments section

NOTE:  We want to meet more and more investors during our 6 city tour. The minimum investment to participate in our workshop starts at Rs.3500/-. Come be a part of Design your financial life 2.0 ( You will have the most amazing time as an investor)

4 benefits of a group health insurance cover from employer !

Posted on by Jagoinvestor

It is common nowadays for salaried employees working in big companies to have a group health insurance cover from their employer. Some firms provide health cover to the employee, his spouse, and his children while the more generous ones also extend this cover to the employee’s parents.

group Health Insurance Advantages

In this article, I want to help you understand in some detail, what exactly constitutes group health cover. I will also cover the benefits of group health insurance policies that are not available in the individual health insurance plans one buys directly from health insurance companies.

What is group health insurance ?

The concept of group health insurance is very simple. When you buy health cover policies covering big groups of 50 people or even 500 people, it is termed as group health cover. Normally big organizations would take these policies for their staff.

The good thing about these group health insurance policies is that it can be tailored to the requirement of the proposer (one who is taking the policy) and can be offered as a benefit to their employees. Insurance companies benefit from this arrangement, as they get massive premiums from a single source (imagine how much premium Infosys would pay yearly). The big ticket-size also allows insurance companies to offer more benefits at a relatively lower premium value (How Insurance works – The full business model).

I recommend that everyone have his or her own health insurance apart from employer health cover, but that’s a different topic of discussion. The focus of this article is to highlight some of the good points about group cover and how you can benefit if you fall under such a scheme.

4 advantages of group health cover from employer

1. No Medical Checkup’s

The best part of group health insurance cover from an employer is that there is no requirement of undergoing a medical checkup – both for self and family members. Everyone is covered automatically in the group cover from Day 1 and you can completely avoid the hassle of a medical checkup.

2. Maternity cover from Day 1

This is going to bring smiles on lots of faces! From Day 1, maternity expenses are covered under group medical cover in almost all companies. So if you join a company and if you are part of the health cover benefit scheme, you will get maternity benefits immediately; unlike the individual health cover which has timing limitations.

3. No Waiting period Concept

Another great feature of group health insurance is that there is no concept of waiting period for any illness. Even pre-existing illness are covered under group cover. So if your parents are suffering from some illness such as diabetes or heart ailments, it gets covered from Day 1. This is never the case with individual health cover that you buy on your own. Again, this exception is only made possible through the dynamics of group health cover that I explained earlier.

4. More Cost Effective because its a group cover

Like I mentioned in the beginning or this article, because of economies of scale, the premium per insured person is very low for group health insurance policies. Hence, if your employer is providing you a group health cover, it makes sense to apply for it, even if you have to pay the premiums yourself.

How to fit in Group Health Cover in your overall Health Insurance Portfolio ?

So now the question is how should a group health insurance cover find a place in your overall health insurance portfolio? While we have seen advantages of group health insurance, in the same way there are lots of disadvantage of the group health insurance. The first importance should be given to having your own individual health insurance policy so that the complete control is in your hands, not your employer. While group health insurance from employer is great, but look at it as secondary option, not primary for the reasons I have mentioned in this article.

is employer health cover sufficient

So, make sure you do not depend 100% on employers health insurance because it can stop anytime, it will not be available for long term after your retirement.


Do you want to share any insight on this topic or your views?

4 kind of exclusions in your health insurance policy which are NOT covered

Posted on by Jagoinvestor

When health insurance claims are rejected, it disappoints the customer more than anything else. Its a disappointing moment for the policy holder, when his trust is lost in company and he starts feeling that he was a fool to buy the health insurance policy at the first place and waste his premium, because companies are just fraud, who wants to loot the customers, by giving silly reasons for not settling the claim.

They feel companies are coming up with unreasonable reasons to reject their claims. This situation is a big blow to customer financially, because now they have to bear all the expenses from their own pocket. This is exactly what happens with many customers who have no idea of what their health insurance policy covers and does not cover.

What does a Health Insurance Policy does not Cover ?

In almost all the cases where claims are rejected and customers are disappointed, its seen that it happens because companies reject claims based on the policy document rules and what is covered or not covered into the policy, however the customer disappointment is always there, because there was a lack of understanding of what is covered and what is not covered. There various clauses like waiting period concept or exlusion of pre-existing illness, which customers do not try to understand fully and see health insurance policy as something which will just pay their bills in any medical case. However thats not true.

In this article I want to make you aware about the 4 major clauses in almost all the health insurance policies which will help you understand how exclusions work in case of health insurance policies and when you will not be paid. This will help you and companies both to make sure you are on the same page.

What is not covered in health insurance policies

Exclusion #1 – Permanent Exclusions

Permanent exclusions are listed category of treatments, which are never covered in health insurance policy for whole life. They are excluded permanently from the ambit of the health insurance scope. These permanent exclusions are clearly mentioned in the policy document of the health insurance product under section “Permanent Exclusions”.

Even before buying the policy, you can look at the PDF document of the policy which must be there on the health insurance company website. Almost all the companies have the same list of illnesses listed under this section, however you should anyways look at it.

Here is a sample list of some of the permanent exclusion taken from Religare Care Health Insurance policy(not the full list)

  • Any condition directly or indirectly caused or associated with any sexually transmitted disease
  • AIDS
  • Any Treatment arising from or traceable to pregnancy, miscarriage, maternity, abortion or complications of any of these.
  • Any Dental treatment or surgery unless necessitated due to an injury
  • Charges incurred in connection with cost of spectacles or contact lenses, routine eye and ear examinations
  • Any treatment related to sleep disorder etc
  • Treatment of mental illness, stress , psychiatric or psychological disorders
  • Any Treatment/surgery for change of sex or gender reassignments including any complication arising out of these treatments
  • All preventive care, vaccination, including inoculation and immunizations
  • Non Allopathic treatments
  • Any Out Patient Treatment
  • Treatment received outside India (unless its part of the policy)
  • Act of self destruction or self inflicted injury , attempted suicide
  • Any Hospitalization primarily for investigation or diagnosis purpose
  • Cosmetic and aesthetic treatments
  • plus, there are many others – which you should read in policy document

Here is an exact snapshot from Bharti Axa Health Insurance page

what is not covered in health insurance policies bharti axa

Exclusion #2 – Waiting Period Concept for selected illness

Each Health insurance policy has the concept of “Waiting Period” for a selected list of illnesses, which means that for first few years(which can be anywhere between 2-3 years) will not be covered under health insurance and only after that period they will be covered. So if waiting period is 2 years in some policy, and you take the policy in year 2014, the illness covered under waiting list will be covered only after 2 yrs are over.

This is one thing which customers do not pay attention to while taking the policy and if they get hospitalized due to some illness which is not covered under waiting period, their claim is rejected and then they feel cheated and complain about the company. Here is a real life case on our forum

Here is the list of some of the illness and diseases which are part of waiting period in most of the policies

  • Arthritis , Osteoarthritis , Osteoporosis , Spinal Disorders, Joint replacement surgery
  • ENT Disorders & surgeries, Deviation, Sinusitis and related disorders
  • Cataract
  • Dilation and Curettage
  • Piles, Gastric Ulcers
  • All types of Hernia , Hydrocele
  • Internal tumors, Skin Tumors , cysts
  • Kidney Stone , Gall Blader Stone

Some policies might have the specific waiting period for senior citizens, like in case of Family First policy by Max Bupa, there are few illness which are under 2 years waiting period for senior citizens, but not for young customers.

Specific Waiting period for senior citizens

Exclusion #3 – Pre-Exisitng Illness

Another exclusion is “Pre-existing illness” in all the policy documents of all the health insurance policies. Pre-existing illness are those illnesses which are already detected for the patient. Most of the companies do not cover these pre-existing illness for starting 2-4 yrs (exact time varies from one company to another). So if someone is suffering from some respiratory illness already, then any treatments or hospitalizations which occurs due to respiratory problems will not be covered for first few yrs (the exact tenure depends on company). This is to prevent situations where a person is detected for some disease and he takes the health insurance so that he is covered for the hospitalization, this is simply not allowed and does not make any business logic. So thats the reason its said that one should take health insurance as soon as possible so that those initial few years are passed and then you are covered for wide range of illness.

Pre-existing illness in case of Senior Citizens

In case of senior citizens, pre-existing illness are excluded for rest of the life in most of the policies, because anyways there is higher probability of senior citizens getting hospitalized due to their existing illness. So if someone has undergone bypass surgery and they are senior citizen, any heart related treatments will not be covered for all life. It will be permanently excluded from the policy. Thats one big reason why I keep on saying that you should take your parents health insurance before they turn 60 yrs. There are some companies like Oriental Insurance, which does not even require medical tests for persons upto age of 60 yrs, just the declarations given in the health insurance form is enough.

Exclusion #4 – First 30-90 days waiting period

Almost all the health insurance companies do not give cover for any medical treatment for the first 30-90 days of taking the policy, except the medical expenses which result from injury (like accident). For example Religare Care have a initial 30 days waiting period, however Max Bupa Family First policy has a 90 day waiting period

Conclusion

Health Insurance is a preventive financial product, not a reactive financial product. You take health insurance to make sure that you are covered from future problems, not to deal with current medical issues. So when you are healthy, you should go for medical policy, so that you are covered for any long term medical issues. Most of the people start the procedure of buying health insurance when some illness is detected, and that’s when health insurance policy will not help you much. Instead of having wrong expectations by assuming things, better analyse and research the health insurance policy properly and deeply by reading the policy document.

Let me know if you have any experiences on this or want to share something ?

Bought Health Insurance ? Here are 4 things you should do after that !

Posted on by Jagoinvestor

Have you bought health insurance? If you answer is NO, then you are lagging way behind the crowd and the best thing for you to do, is to get health insurance cover immediately. But if you have already insured yourself, then you have reached an important milestone and are probably feeling relaxed about your financial burdens. After all, if you are hospitalized, someone else will have to foot the bill, and not you.

Congratulations!!, But now, the question is, are you a 100% ready? The process of buying health insurance is very easy – you research the best policies, buy them online or offline and then the policy documents arrive at your home, and you feel – “I have finally taken health insurance, now I am done!”.

things to do after taking health insurance

The Real test is at the time of Health Insurance Claim

However, the real test arises when you have to finally claim health insurance benefits (here are detailed rules and procedure explained). It’s not a great time for you. Someone from your family (or you) has been hospitalized because of an accident or some major illness and every one is tense. You are in a hurry and do not have the time to “think” – this haste is almost always a BAD thing.

While at the back of your mind, you know you have health insurance; there are lot of things to accomplish in a short time frame to make that insurance useful. You have to search for the right hospital and contact the insurance company/TPA. The worst possible outcome is if you are the person hospitalized, and your family has no knowledge of these matters!

So why not plan beforehand and be fully prepared for bad situations. You may think it to be a waste of time at present, but in the time of a crisis, you will be thankful you took these steps. So today, let’s see a few things you can do after taking health insurance to fully prepare yourself for a crisis situation.

4 things to do after taking Health Insurance

1. Visit nearby hospitals

Imagine a situation where something bad has happened. You will probably be in a rush – you will call someone close and ask for good hospitals, maybe spend a few minutes thinking which ones are better and then head towards it. There is no TIME and your priority is on getting admitted somewhere first!. Even if it’s a planned hospitalization, your time for research is limited and there might be many surprises, which crop up at the last moment.

The best time to research hospitals to visit (in event of an emergency) is right NOW. You have all the time in the world at the moment. You can read all the reviews on internet, visit the hospital, make inquires related to charges and facilities, compare hospitals with each other, and finally jot down hospital names which are more preferred to others. You might realize that for OPD, Hospital A is better than B, C and D. You might come to know that Hospital C takes care of senior patients much better than others. You might realize that Hospital D is cost effective on its final bill amount, even though others give the feeling of being cheaper.

This will take you few hours or days, but if you have already done this, at the time of an emergency you will be a 100% mentally focused on the situation without having to worry about the logistics of treatment. Click Here to read some health insurance myths which you thought were true

2. Keep Health Cards in your Wallet and scanned version in Mobile

If you ask me how much time it takes to do this step, it takes exactly 1 hour. You open your mail where you have got the e-version of health cards, load it on a pen drive, go to the market to get a color Xerox, laminate the copy, cut it to match the size of a debit card and put it back in wallet – AND You are done.

If you already have the e-version of health cards in your email, put them in your mobile in images form (so that you don’t have to search your emails at the time of emergency). If you have the actual health cards in physical card format, it is very handy to have it ready with you. You can also keep a scanned copy of health insurance cards on your Google drive or Dropbox account, so that you can access them from anywhere if needed.

3. Keep emergency contacts on phone

In times of emergency, every minute counts. Why rely on Justdial or Google at the last minute – all you need to do is to save numbers of nearby hospitals (including alternate numbers) to your contacts list. The numbers can easily be found through Justdial or from the hospital’s website. Saving the numbers in your email (as drafts) is a good idea too.

Add these numbers to the list of contacts in your family’s phones as well. And while you are at it, keep a printed copy of this data in a common area that all family members have access to.

4. Keep a “emergency folder” for health insurance

I am willing to bet, that in the event of an emergency, your family members will not be able to access your health insurance policy, health cards, emergency contact numbers of the health insurance company, phone number for hospitals nearby or your other identity documents – especially not in a 5 minute time frame.

Why not make it easy for them to do this by preparing an “emergency folder” for health insurance. Keep a folder which has your health insurance policy document copy, your health card copy, a paper which has emergency contact numbers such as the doctor’s phone number, hospital phone numbers, TPA contact numbers, Health Insurance company customer care numbers, and a “guidance sheet” which sets out, step by step, all that needs to be done in case of an emergency or even planned hospitalization. I am so happy to share with you all, that we just completed our online investors bootcamp> last week batch and they all had awesome time arranging their documents, they felt so relaxed when they reported it on our bootcamp facebook group.

Note: Even if you have health insurance from your employer and not your own policy, these steps still apply to you. Follow them.

4 reasons why you should avoid Health Insurance policies from Banks with cheap premiums !

Posted on by Jagoinvestor

Do you come across health insurance policies from Bank with surprisingly low premiums and with amazing features and benefits, which makes you feel you should not miss this offer? Today I will give you good enough ideas about those health insurance policies and will help you understand the limitations of those health insurance policies from the bank and why you should avoid them in most of the cases. Let’s start.

Health Insurance from Banks

Background about Health Insurance policies offered by Banks?

All the health insurance policies offered by banks is mainly a group of health insurance provided to all their banking customers in association with some external general insurance company. What happens, in this case, is that a health insurance company approaches a bank and tells them that they can offer a specialized health cover to all their bank customers with lots of benefits with a small premium. The best part of these policies is that there are no medicals involved, there are fixed premiums for all age group customers, very low premium, etc. On the first look, you will not even believe that something of that kind can exist.

But there is always another side of the situation and now these policies despite looking amazing to have lots of problems and limitations which you should know and then take the decision. Let’s check them one by one

1. Depends on negotiations every year

Health insurance policies provided by banks are actually an outsourced thing. So if you buy it from bank A, then actually its a policy from Insurance company B, the bank is merely an intermediary. As this policy is a group cover, the policy premiums and all the featured are going to be negotiated on a regular interval like each year or twice a year. Now the problem is that if the health insurance company feels that the premiums should be revised (for whatever reason), then banks can’t do anything and the only customer will suffer here because he did his long term health insurance planning with this policy.

The premiums of the policy can rise like anything in the future because the pricing of the product is very flawed in most cases because banks do not have much experience in the health insurance domain.

In absence of the right expertize with most Banks, the pricing could be majorly flawed. Though there are no published figures available, our sources at some Insurance companies say that it is an incessantly “bleeding portfolio”. We believe, any contract, in any field, which is not win-win,does not work in the long term.

2. Chances of association breaking in future

What will a customer do if the association breaks between the bank and insurance company in the future? Health care costs are increasing and its always a good thing to get your self insurance as soon as possible, now if after 5 yrs of running a policy suppose the association breaks, a customer will be left into a situation where he has to again find a suitable policy and who knows if he has developed some illness in between these 4-5 yrs, who will cover that. Here is a real-life experience from Ketan shah on the forum, see how he suffered when something similar happened with him

Dena bank 5 Years back came out with Scheme in tie up with Oriental Insurance for providing mediclaim at highly attractive premium i.e. Rs. 7000 for 5 Lac cover.

We hold various accounts with dena bank and as per their tie up we got ourselves covered (5 Policies) after paying 2 years premium, when the 3 rd year renewal came we were informed that the tie up with Oriental is no more there and the same policy will be transferred to United India Insurance for same Premium..

Now we have paid 2 years premium with United India and the 3rd year Premium we are informed that Dena Bank has increased the Premium 2 -3 fold for policies…

Now trusting Dena bank and paying 5 years of Premium which comes to almost 2 Lacs we are stranded and forced to pay high Premium for my parents and now we are in a fix If we don’t pay and we cant even change the company since parents are 65 +

we were assured that the scheme shall continue since it is bank tie up and therefore we got our previous pvt policy cancelled which had a very High Premium for my Parents (20000 for 5 Lac)
Please advice if we can approach IRDA for the same…

3. Limits on renewable age

Health insurance is a long term financial product and should always be bought with very long term benefits in mind. Having a lifetime renewal option is not just a wish, but kind of must-have feature in your health insurance policy and that’s where these policies from banks fail. They all have a limitation on the renewal age in most of the cases.

Even if the premiums are lower, what will you do sometime in the future when you really need that policy and it shuts the door for you.

4. Pathetic “service” issues

The service provided at the time of claim settlement is really a big parameter. Now if you have bought it from the bank (here bank is the agent), there is no “person” or “company” to help or assist you at the time of claim settlement? Whom do you mail? Who do you talk to? Who will you catch? Who will you blame? The bank due to its size and nature will not entertain you in a proper manner.

Also being a group policy, it some times gets very complex to understand their limitation and many things will be a complete nightmare for you as a customer. So it’s really a big disadvantage here. I want you to go through the following conversation on service issues which was done by Mahavir Chopra of medimanage and Ritesh sometime back. It will give you some idea about this aspect.

Bad Service in health insurance by banks

Overall I would say any health insurance from banks which are pure group cover should be just an extra health cover in your life. It should NOT be the primary long term solution for your health insurance needs. Its very important to have a large health cover from a very strong company with great benefits and strong service levels.

What do you feel ?

Term plan or Health Insurance ? Which is more Important if you have limited money ?

Posted on by Jagoinvestor

Few weeks back, I posted an interesting question on our Facebook Page asking – “Given limited money – which is more important product to buy from security point of view – Term Insurance or Health Insurance ?” .

life insurance or health insurance

Lets say there is a guy – who wants both a term plan and a health insurance for his family and he only has Rs 10,000 per annum left with him, now he can either buy a 1 crore term plan for his family or buy a 5 lacs cover for his family. But he will be able to get only one of them from this Rs 10,000 left with him, then which out of term plan and health insurance is makes sense for family and is more useful? Lets see some points, raised by our facebook fans, which will help us to think about it.

1. Death is less probable compared to hospitalization

One of the argument is that, there are far greater chances of getting hospitalized because of some reason then dying. So if you look at this problem from probability point of view, you can be almost sure that in next 5-10 yrs, you or one of your family member will be hospitalized for some or the other reason – big or small. But meeting death is very less likely in comparison. So a lot of people argued that Health insurance is much more important than term plan, if you have limited money.

2. Premiums are increasing fast in Health Insurance and its can be claim every year

Another argument in favor of health insurance over a term plan was that, its a product where you can claim every year and protects your financial life from regular attacks of money sucking illnesses and accidents and anyways premiums are increasing very fast for health insurance (or would increase in future) because of the health care inflation. However for term plan the premiums are coming down over the years (now we might be close to saturation) .

3. Hospitalization Costs can be arranged in worst case

Now some people said that term plan is more important than health insurance and the biggest reason for it was that health insurance expenses are somehow manageable in worst case. You can take a loan, swipe a credit card, ask your friends and relatives or in worst case, sell some of your home stuff.

Life will again be on track somehow. But if you ignore term plan, its a very big risk for your family future, because the amount required by your family cant be arranged by asking it from someone (just imagine you die and now your family would need their monthly expenses for lifetime , your children expenses for current and future, their whole life is at stake now). It would generally run into several lacs or few crores.

life or health insurance

High Probability – Low Impact

So its very clear that term plan has a very high impact on your financial life, but less probability of its occurrence , however health insurance has low impact on your financial life (compared to term plan) , but is high on probability and its has potential to occur multiple times in your lifetime.

Balancing both Health and Life Insurance Costs

Another workable option is to divide the money into premiums for both term plan and health insurance, but in this case you will compromise with the cover amount of both the things however small it is. This way you will have both the things in your financial life, even if its small . Do you think its a workable solution ?

What is your opinion about this question ?

Top up & Super Top up Health Insurance Covers – How they work ?

Posted on by Jagoinvestor

What do you do when you want to take a very high health insurance cover like 20 lacs? Is the only option a regular health insurance plan? In this case, you can use top up health insurance plans, which are one of the best ways to enhance your health cover after a certain threshold? In this article lets understand how top up and super top up health plans work and how they benefit you. So we will understand both “top up health insurance” and “Super top up health insurance” in this article, but let’s understand first what the meaning of “Top up” is, in general.

What is the meaning of “Top Up” Cover ?

A top up cover actually covers you after a “threshold limit” is already exhausted or used. To give you an example lets say you have a top up health cover of Rs 10 lacs sum assured with the threshold limit of Rs 5 lacs, in which case the policy will only cover your expenses beyond Rs 5 lacs only. If your claim amount is Rs 8 lacs, then it will only pay you Rs 3 lacs (8 – 5), and NOT Rs 8 lacs total. That’s the main difference between a regular health cover policy and a top up cover.

So now if you already have a health insurance cover of Rs 5 lacs sum assured, then you can take a top up cover up to Rs 10 lacs with threshold limit of Rs 5 lacs, that way you will be covered up to 10 lacs. The first policy will cover you up to Rs 5 lacs, and the top up cover will cover you for the 5-10 lacs range. You can understand that more clearly with following image.

Suppose you have following 2 policies.

  • Policy A –  Regular Health Insurance Plan with Rs 5 lacs sum assured.
  • Policy B –  Top up cover of Rs 10 lacs with threshold limit of Rs 5 lacs.

top up health insurance plan

Now let’s take this same example and try to understand how Policy A (Regular Health Insurance) and Policy B (Top up health insurance) will pay you in 3 different scenarios, just to make sure you fully understand how top up health insurance policies work.

Scenario 1 – Claim of Rs 3 lacs

In this case, the first policy will cover you for full Rs 3 lacs, as your policy itself is for up to Rs 5 lacs.

Scenario 2 – Claim of Rs 8 lacs

In this example, the first plan A, will cover you up to Rs 5 lacs, but if your hospitalization expenses go to say Rs 8 lacs, then the first policy will only pay Rs 5 lacs, but the second policy (B) will cover you for the rest of  the Rs 3 lacs, which is above the threshold of Rs 5 lacs.

Scenario 3 – Claim of Rs 12 lacs

In this case, first policy A will pay you Rs 5 lacs, and the second policy B, will pay you next 5 lacs only, because you have taken a top up cover of up to Rs 10 lacs only. So the Rs 2 lacs extra, you will have to pay from your own pocket.

What is Super Top up Cover ?

Just like a top-up cover, there is something called as Super Top-Up cover, with a very small difference. A top-up cover will pay you only if your claim amount (bill for a single hospitalization) is above the threshold. Like, in our example above, the top up cover will help you only when your bill is above Rs 5 lacs each time, only then it will come into picture, like in the case of the Rs 8 lacs bill, then the top up cover will pay you an additional Rs 3 lacs. But if you have two bills of Rs 4 lacs each, then the normal Top up cover will not help because no single bill amount is above the threshold limit of Rs 5 lacs.

That’s where Super top up plans come into picture, which takes into consideration the TOTAL of the bills in a year and not just the single instance. So in case of two bills of Rs 4 lacs each, your total bill is Rs 8 lacs (above threshold limit of Rs 5 lacs), then Super top up cover will pay you, where a Top up cover will not.

Let me clear that with a more detailed example by using the chart below

difference between top-up and super top-up health insurance cover

Companies Offering Top up and Super top up plans in India

Companies offering Top up

  • Apollo Munich OptimaPlus
  • Bajaj Allianz Extra Care
  • Bharti Axa High Deductible Health Insurance
  • ICICI Lombard Healthcare Plus
  • Star Health Super Surplus
  • United India Top up Health Insurance

Companies offering Super Top up 

  • United India
  • HDFC Ergo Health Suraksha (offering to bank and credit customers, currently)

Let me give you a comparison chart of the current Top up health insurance plans in India at the moment. Not many Super top up plans, so they are not in the chart while comparing.

top up health insurance policies comparision

Super Top up Cover for Employees having group cover from Employer

A lot of salaried employees already have a group cover from their employer and they feel that they should not waste their money in a separate health insurance policy (which is not quite a right way of thinking, and you can read this article to know why I say that.) A top up cover is a very useful way for those employees to extend their cover beyond a point.

Lets say you already have a 5 lacs cover from your employer, but you feel that it’s insufficient and you wanted to have a cover up to Rs 10 lacs. Now, one way of doing it is to take a separate cover of Rs 10 lacs, but you can take a top up cover of up to Rs 10 lacs with threshold of Rs 5 lacs (as you are already covered from your employer up to 5 lacs). This way you will be covered up to 10 lacs. But understand that in that case you will have to claim your expenses multiple times.

Additional Health Insurance cover or Top up cover – Comparison

Just give me pointers, I will write about it, or just send me an example where we are comparing a 10 lac cover with A 5 Lac cover + top of 5 lacs

When does a top cover policy makes sense – Hear from experts

So is topup or super top up cover the best option to upgrade your health insurance coverage ? No !. Here is what Mahavir Chopra, a health insurance expert suggests –

Most Insurance advisers recommend a top-up plan to upgrade your coverage. In terms of convenience of purchase and claims, we would recommend upgrade of the same health insurance policy, as the best option. This is of-course, provided you are happy with the policy terms and services.

The second best option would be to compare available options of Super Top-up with option of Additional Mediclaim Policy. If the premium is more or less the same, we would recommend additional policy more than a Super Top-up.

After all the above options, look for the option of a simple top-up to increase your cover. Be sure you are aware of the fact, that this option is more useful in the very long term (6-10 years), since it will trigger only when your one claim goes above the threshold/deductible mentioned in the policy.

Features of Top up Health Insurance Plans

Let me tell some more points and features about the top up plans so that you are more clear about it and if its useful for you or not

1. Cheaper than regular health insurance plans – You have already seen that they are cheaper than the regular health insurance plans because they cover you only beyond a threshold, the probability of which happening is very less.

2. You can buy it from anywhere – You can buy a top-up cover from any company, there is no compulsion that you need to have another cover from same company. In-fact there is no requirement that you should have another health cover at all. You can just take a top up cover even if you do not have any other health insurance product.

3. Available with the option of individual and Family Floater Cover – A top up cover is available as individual cover and also as a family floater. So you can extend the cover for your entire family. Just that some policies might consider parents into family floater and others might not.

4. Concept of Pre-existing illnesses and Exclusions – Just like a normal health cover policy, even a top up cover can impose the restrictions on the pre-existing illnesses and exclude the diseases which they feel they do not want to cover. Also some top up covers might not cover pre and post hospitalization expenses. Some policies like Bajaj Allianz Extra Care provides continuity for already existing main policies. For instance, if you have a policy for 10 years with say New India Assurance, and you are buying a Top up from Bajaj Allianz, you will get continuity for the 10 years on the top-up and hence the waiting periods will not apply to you.

5. Tax benefits under Section 80D – You can get the tax benefit under sec 80D for the top up cover policies

6. Cashless facility would be difficult – I am not sure on this one, please guide! You need to follow the same cashless procedure, when your hospital bill exceeds the sum insured of main policy. If you are aware in advance about the high hospital bill, ensure you intimate at the time of admission itself.

Are you looking for extending your health insurance cover using a top up or a super topup cover ?

Getting Claim from Multiple health insurance policies – Rules and Process Explained !

Posted on by Jagoinvestor

One of our readers Yogesh asked on our Jagoinvestor forum, about the claim process in case of multiple health insurance policies. I then realized that this is one the biggest doubt in the mind of investors and it needs to be cleared. Another doubt which is there in many minds is what is the claim process and the documents required if one wants to claim from multiple health insurance companies.

Multiple Health Insurance Claims

In this article, I will explain you the rules regarding heath insurance claims from multiple companies and some important points, along with the claim procedure too!. Recently IRDA came up with IRDA (Health Insurance) Regulations 2013 and overall it has made the claim process more easy and customer friendly, which we will see in some time.

A lot of people can end up with multiple health insurance policies with them. It may happen that they have a health cover from employer, and side by side they have taken a separate health insurance plan (which is a good thing) . Also there might be a case that a person had a old health insurance plan taken years back and now he has taken extra cover through a different plan . Another case can be when a person has taken more than two health insurance plan so that parents are also covered and immediate family like spouse and kids are in another policy. So these are few reasons why a person can hold multiple health insurance plans.

Declaring your existing Health Insurance while buying a New Policy

Before we move forward, its extremely important to understand that when you take a new health insurance policy, you always have to declare your old health insurance policies which are currently in force. This would include all those policies for which you are paying the premiums yourself from your pocket. If you are not paying the premium from your pocket and if your employer is paying it, then you don’t need to declare it in the new policy. Note, there are certain Insurance Companies which do not demand such information. In such cases, you are not required to inform about this.

This is extremely important because if you do not disclose this fact, you are violating the terms and conditions of the health insurance contract and in case of investigation this could be termed as mis-representation. Now we will discuss the rules regarding claiming from multiple health insurance policies .

Claiming from multiple health insurance policies

A lot of things have changed few months back. So we will discuss both “before” and “after” rules, so that there is no confusion left.

Before the Regulations (Previous Rules) 

Before the regulations came into effect , there was something called as “Contribution Clause”, which said that a customer has to inform all the health insurance companies he is insured with and all the insurance companies will contribute the cover amount in the ratio of their sum assured (read how much health insurance is good enough). Obviously the assumption here is that the insurance companies are aware that you also have a cover with someone else , which you must have declared with them at the time of taking the policy .

For example , if earlier you had two health insurance plans with 3 lacs sum assured from company A and 1 lacs sum assured from Company B , and if you had a claim of Rs 2 lacs. Then you had to ideally inform both the insurance companies about the claim and they will settle your claims in the same ratio of the sum assured. So 1.5 lacs (75%) was to be paid by company A and 50,000 (25%) had to be paid by company B because of the “Contribution Clause” . Its a different matter than customer never told one insurance company about the cover with another companies and the company which got the claim request happily settled the full amount, even if it was not supposed to . This kind of rules earlier made sure that it was not in customer interest and lot of hassles was there if he had more than two policies. But after the regulations it has changed !

After the Regulations (Current Rules) 

Now after the regulations are into effect, the claim rules are very easy . Now the contribution clause will not be applicable if your claim amount is less than the sum assured of the insurer where you are claiming. However , if your claim amount is above the sum assured of the policy, then the insurance company will impose the contribution clause. You are free to choose which insurer to catch for your claim. So let us revisit the same example we took some time back.

  • 3 lacs sum assured by company A
  • 1 lacs sum assured by company B
  • Claim amount = Rs 2 lacs

Now with the new regulations , you are free to catch company A or company B to settle your claim, but now

If you go to Company A for settlement – Then your claim amount (2 lacs) is less than the sum insured (3 lacs) , so company A has to fully settle the full claim of 2 lacs and they cant tell you that the contribution clause will apply.

If you go to Company B for settlement – But, if you choose to go to company B for settlement , then your claim amount (2 lacs) is more than the sum insured with them (1 lacs) , so company B , has the right to apply the contribution clause and then they will only pay 50,000 to you (25% of their share , remember  they have only 1 lacs sum assured out of your total 4 lacs) and will ask you to claim the rest from company A .

Now imagine the different scenario where your claim amount is 4 lacs

In-case here in this same example, if your claim amount is 4 lacs, then your the contribution clause will apply because your claim amount is more than the sum insured of 3 lacs and 1 lacs both, so it does not matter which company you approach first, the contribution clause will come into effect .

Better to have a Large cover with single insurer

Which now explains why its advantageous to have a big enough cover from a single insurance company (like say 10 lacs sum assured from one company) , rather than having small covers from multiple insurance companies like (4 lacs , 4 lacs and 2 lacs from 3 companies) . You will face a lot of documentation issues if your claim amount is large because then the contribution clause will apply. ( Read 17 Most asked questions in Health Insurance)

I hope these examples has made it clear to you about the the rules for multiple health insurance policies claims . In-case you have more than 2 policies , still the same rules will apply.

What is the Claim Process in case of multiple health insurance policies?

Here there can be two cases – Reimbursement Claim or Cashless Claims , but for this article, we are looking at reimbursement claims procedure. Even in case of cashless claims , if its from more than one insurer, reimbursement is involved anyways, because – The final approval for any Cashless claim comes at the time of discharge. Hence, only one claim can be made through cashless. All the other would have to be made through the reimbursement mode. Now lets see what is the procedure involved in claim process.

In case of single claim

  • Intimate the health insurance company at the time of hospitalization
  • At the time of actual reimbursement, fill up the claim form
  • Attach all the bills, receipts, discharge documents, prescriptions, diagnostic tests, including films required by them in ORIGINAL
  • Keep tab on the claim status. The TPA or Insurance Co. could ask for additional documents for settlement of the claim. You need to provide such documents.
  • You will get the claim in  around 30-40 days depending on Insurance Co. to Insurance Co.

Incase of multiple claims

  • Intimate all the health insurance company at the time of hospitalization
  • Now you first have to choose the company from which you will claim first.
  • Fill up the claim form
  • Attach all the bills and documents required by them in ORIGINAL
  • Take additional attested copies from Hospital for the no. of insurance companies you are likely to claim from.
  • Insurance company will issue you a statement saying that they have all the original proofs and documents and they have settled the claims
  • once the claim is settled by first company then you move to the next company, you need to get a claim settlement summary (which mentions about the claim made, deductions made, and claims settled etc.)  then you move to the next company
  • Fill up their claim form
  • Attach the claim settlement summary
  • Attach Attested copies.
  • Create a covering letter explaining that you have earlier claimed from Company X, and the details of documents enclosed.
  • If you still want to claim it from more companies , take the claim settlement document from 2nd company also.
  • Repeat the process with all companies from which you want to get the claim. You will get the claim in some days or weeks

How will the claim be paid

  • The first Insurance Company will apply deductions and limits as per the terms and conditions of the policy against the claim made and make the payment.
  • The second Insurance Company will also apply deductions and limits as per the terms and conditions of the policy against the claim made as if the claim is originally made to this Insurance Company, and arrive at the payable claim amount. Once this amount is arrived, it will deduct the amount already received from first insurance company.

Does Sequence of Claim matter in-case of multiple companies ?

My friend told me that the amount of claim you get back at times can be different depending on the sequence of claim. Mean if you settle your claim from company A first and then Company B , it might happen that you may get less money back compared to when you first approach company B and then company A .

But there is a catch here, this situation assumes that the insurance company does not apply the contribution clause, which actually happens in reality. Mahavir Chopra shares with me that in real life , the claim cases they handle, they have observed that companies do not bother to apply contribution clause even if it applies. So the companies in real life in maximum cases, the health insurance companies settle the claim or reject it as per the situation and condition.

Now coming to the main point which I wanted to tell you. Lets say that someone has two health insurance policies with him.

Policy 1 – 2 lacs sum assured (but with some limits and sub limits applied)
Policy 2 – 1 lacs sum assured with NO LIMITS or restrictions

And lets say that his hospital bill was 2,50,000 in total as explain in the chart below. So now he has two choices , Either claim from Policy 1 and then Policy 2 , or reverse that order and first claim from Policy 2 and then Policy 1 . In both the cases he will get back different amount. Lets see those.

Maximize your claim in health insurance from multiple health insurers

Learning – In case you have 2 policies , and there was a case where you have to claim from both of them, always claim first from the company which has LIMITS and restrictions, and later from the company which does not impose any limits, this will maximize your claim amount in total.

Important Note – In case where contribution clause is applied, even in that case the conclusion remains the same, the case 2 claim amount in that case is 1,14,000 (unlike 1,71,000 without contribution clause) . You can check out the workings yourself.

Some Good practices and points to remember

  • If you have a group cover from your employer, it would be a good idea to apply for the claim from them first, because the claim process is faster with group cover , the preexisting illnesses are also covered there in initial years and lastly, the number claims there is not going to impact your premiums .
  • Its always a good idea to have a single company cover of a higher amount, rather than having small covers from many policies, If you have small covers from different companies, it would be a good idea to consolidate your cover in a single policy or maximum 2 policies, not more
  • The same thing claim rules will apply in-case of Top up and Super Top up health insurance policies, because there you claim from more than 2 health insurance companies.

Conclusion

At the end, I would say that its always good to have a big enough cover for yourself so that you don’t have to deal with multiple health insurance companies. You can have the separate cover along with your employer cover if you want. So, How many health policies do you have currently ? I hope you are now clear about the claim procedure from multiples health insurance policies ?