Tag: Health Insurance

8 ways to Upgrade your existing health insurance cover – know more about healthcare inflation

Posted on by Jagoinvestor

Is your health insurance cover enough at the moment? May be No! And you might want to increase it now. But if you feel that your health insurance coverage is sufficient right now, even then, it will need an upgrade after another 5-10 yrs.

Healthcare inflation is on rise in India and there is no way you can live with the tiny health insurance cover for rest of your life.

So let’s check 8 ways you can upgrade your health insurance cover.

Upgrade Health Insurance Cover

If you have bought your own personal health insurance before 2010, in all probability, you have sum insured coverage of less than Rs.4-5 Lakhs.

While it’s great to hear that you at least have your own independent health insurance, and are not dependent on your employer health cover, it’s high time you realize that with the skyrocketing healthcare inflation, the sum insured you have is too low to even cover one hospital bill, leave alone cover you for your hospitalization expenses in your retirement years.

The amount of health insurance coverage you need has already been addressed in one of my earlier posts. What we are going to discuss here are the options available when one is looking for upgrading his/her coverage

8 ways to upgrade your Health Insurance Policy

There are various ways you can increase your health insurance cover. Below are some of them mentioned.

#1. Upgrade later, when needed

Though this may look like the most cost effective, ‘smart’ thing to do, mind you, this is the diciest options of all. Health Insurance companies will accept your upgrade request till you are young and healthy. No one wants you to enter their portfolio or books, once you are old, grumpy or dying.

Jokes apart, even if one of your family members suffer a chronic ailment like Diabetes, Thyroid etc. or worse make a claim in the health insurance policy, your chances of upgrade in the policy are almost zero.

If you are not aware, let me clarify – whenever you apply for an upgrade, you will have to make a fresh application to the Insurance Company for the upgrades giving declaration of any new diseases contracted etc. The insurance company will then evaluate the upgrade request similar to a new application and decide.

All said and done, even if the upgrade is approved, all waiting periods are applied to the upgrade part of the policy, from the year of upgrade, and not retrospectively.

#2. No procrastination. Upgrade your cover now

This is by far, the most ideal option if you have a lifetime health insurance plan and your family is reasonably healthy. Just apply for an upgrade to the highest coverage available first, before you try anything else, including a Top-up plan.

Yes, you will have to request for the upgrade at the time of renewal by filling an application, which will be subject to approval of the Insurance Company. If you one of you family members have had a claim for a chronic disease, you must explore upgrade for all the other members. If you are all covered under a floater, you can apply for a separate plan (explained in point 4).

If you are covered under individual plans, ask for upgrade for the remaining members in the same plan.

#3. Port your health insurance cover + upgrade

If the sum insured you have is the highest available with the current Insurer, you can explore the option of porting your policy to another product within the same insurance company, or another insurance company, which has higher coverage plans.

Note, for portability, in most cases, you need to apply to the new insurance company, 45 days in advance. While applying for portability you need to request for your preferred sum insured in the proposal form. Of course, you will get portability only for the existing sum insured and not for the upgraded sum insured. The waiting periods will start again for the upgraded part of the coverage.

#4. Buy second Health Insurance policy

If the sum insured you have availed is the maximum sum insured offered by the Insurance Company, and portability is not possible as explained above, another option is taking a second health insurance policy from another Insurance Company.

If you ever claim above the sum insured of Policy 1 you can always claim from Policy 2 for the rest of the claim. Ensure you inform about the existing policy in your proposal form for the new policy.

#5. Top-up Cover

Though Top-up plans are recently a popular option to increase your health insurance coverage, you need to understand how they work, before you sign-up for such plans. The policy provides a high coverage with a threshold amount upto which you cannot make any claims.

For instance, you buy a 10 Lakh cover with a 3 Lakh threshold (also called deductible) – you will be able to claim in this policy only when you have made claims of above Rs.3 Lakhs.

top-up health insurance cover

There are primarily two types of top-up health insurance plans :

1. Top-up health insurance:

Per claim deductible: Here the top-up coverage will trigger only when one hospitalization claim crosses the threshold sum insured.

For instance, if in the plan in the above example, there are 2 claims in a year of Rs.2 Lakhs and Rs.3 Lakhs each, the top-up coverage will not trigger since none of the 2 claims crossed the “per claim threshold” of Rs.3 Lakhs. On the other if there is one claim of Rs.4 Lakhs, then the top-up policy will pay the remainder Rs.1 Lakh, as per the terms and conditions.

2. Super Top-up health insurance:

As the name suggests, this is a better version of a top-up plan. Here the coverage will trigger even if the sum total of all claims made in a year cross the threshold sum insured. In the above example, where there are 2 claims made, both the claims will be paid, upto the sum insured of Rs.10 Lakhs.

Unfortunately, there is only United India which provides this plan (albeit, with a lot of reluctance) HDFC Ergo and Max Bupa are in the process of releasing such a plan, soon. Watch this space.

#6. Critical Illness Plans

In most cases, a high coverage of health insurance is required due to contraction of a critical illness like Cancer, Paralysis, Heart Attack, Kidney Failure, Bypass Surgery etc.

A Critical Illness Plan provides a lump sum benefit irrespective of the actual expenses incurred provided the insured person is diagnosed for a listed ailment and survives for 30 days. Taking coverage of around Rs.5-10 Lakhs for critical illness is a good option. The only flipside of this plan is risk of suffering an ailment not listed in the policy.

Ensure you take a policy which covers an extensive list of illnesses, at least till the age of 70. There are plans which provide coverage for a list of 20 ailments.

#7. Defined Benefit Plans

Defined Benefit Plans provide fixed compensations against list of surgeries, irrespective of the actual costs incurred. For instance one plan pays a fixed benefit of Rs.1.00 Lakh for Angioplasty, Rs.2 Lakhs for a Bypass Surgery. These plans pay such claims based on minimal photocopied hospitalization papers.

Additionally these plans provide a host of other fixed benefits including fixed amounts per day of hospitalization etc. These plans are different from Critical Illnesses which are based on diagnosis, while these plans are based on actual hospitalization and surgeries.

#8. No Claim Bonus Plans

Given a choice, if you are going for a fresh cover, go for plans which provide No Claim Bonus (Increase of sum insured every year) rather than No Claim Discount (decrease of premium). This helps an assured increase of your coverage every year till you don’t make a claim.

Most good plans provide a bonus of at least 50% of the base cover. Of course, this is not a long term as one claim completely wipes out this bonus at the time of renewal of the policy.

Note – In my 2nd book – “How to be your own Financial Planner in 10 steps” , you can read about Health Insurance in the 3rd chapter

Watch this video to know 9 rules to keep in mind while buying a health insurance:

Top-up Vs. Super Top-up Vs. Upgrade Existing Policy Vs. Buying additional Policy

Most Insurance advisers recommend a top-up plan to increase your health insurance cover. In terms of convenience of purchase and claims, we would recommend upgrade of the same health insurance policy, as the best option. This is ofcourse, 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.

Other Important points when you plan for upgrading health insurance

1. Upgrade deadline

If you observe around you, lifestyle ailments are spreading like an epidemic across India, thanks to the sedentary lifestyle we live.

You will observe that most of the ailments start cropping up in the late 30’s or early 40’s. If you/your family are in your early 30’s and already have health issues (overweight, underweight, breathlessness, borderline high cholesterol etc.) it is recommended that you go for the highest coverage on mediclaim immediately, rather than get a restricted cover in case you suffer from a chronic ailment in the interim of your plan to increase coverage.

In any case, ensure you upgrade to desired coverage by the time you reach the age of 40 years.

2. Option of stepping up your upgrade plan

If you are in your early 30s, and you cannot afford a one-shot upgrade is too heavy on your current financial budget, create an upgrade plan. Spread the desired upgrade amount across your age upto 40 and upgrade the amount in a manner that you reach the upgraded amount by 40 years. For instance, increase your sum insured every year by say Rs.1 Lakh.

3. Upgrading Features of your plan

Moving to a plan with better features. If you are happy with the sum insured, but not with the features (limitations like room rent limits or co-pays etc. or maybe the network of hospitals) and you are looking at an upgrade, you need to first look at the same insurance company, and check whether they have an advanced plan you are looking for.

In case you like a plan from another Insurance company, you would have to opt for portability with this new Insurance Company 45 days before renewal of your existing policy. Do remember, in the real world (outside the IRDA guidelines) there are limitations on who can get portability, especially if your family is older than 45 years, has a claim history, or a chronic disease.

Go for any options you like above, the bottom line remains – TAKE ACTION. TAKE ACTION NOW. You have too many priorities in your life at home and work, to really be able to remember and act on this even tomorrow.

This article is from Mahavir Chopra of Medimanage. This article first appeared on medimanage blog

Health Insurance Inflation in India – Have you planned for next 30 yrs ?

Posted on by Jagoinvestor

Lets talk about Health Insurance Inflation today ! . When you decide upon buying a health insurance policy, one of the pertinent questions that crops in your mind is the coverage amount – how much health insurance to buy? One of our readers Saket made an interesting comment on health care inflation, and how a decent cover today might look so small in distant future and raised the issue of “renewal” of policies by companies.

The Health Insuranec companies, eargerly selling policies to younger age group (mostly), are actually giving them a false sense of security about their twilight years. No doubt, the current policy will be good for next 5 years, but not later than that because of the health insurance inflation. So this sense of security has a shelf life of max 5 years. After that my fate will lie in the hands of insurer-whether it finds my policy upgrade worthy or not. Considering a most conservative healthcare inflation rate of 15% , a humble 3L coverage requirement as on date for a 38 yr old would translate into a whopping Rs 130 Lakhs ‘Final Amount’ at the age of 65 , the calculation is fairly simple – 3,00,000*(1+.15)**27 =130 lacs

Health Care Inflation In India
Coming to the question, we can now clearly see that decision of taking health insurance in current moment depends on two points. which are

a) Health insurance is a super looooonnng term investment, which you would need most in your old age, beyond say 60 years of age.

b) It’s common knowledge that Hospital costs are increasingly rising, gradually becoming unaffordable, to the common man.

How much is enough to financially support your family’s healthcare needs, ensuring you have a peaceful retirement life. Let us take this up, step-by-step.

Costs of common surgeries & Hospital Costs In India

The cost of some major surgeries in hospitals across India has gone up in recent years. Going by these numbers, assuming only one surgery is required during a year, per member; a sum insured of Rs. 3-4 Lakhs should be good enough for the year 2012. Major supply deficit with respect to healthcare infrastructure – hospital beds, doctors and nurses, increase in cost of medical equipment’s, land has resulted in an increasing trend of health insurance inflation. Here are the 2012 costs for surgeries, compared with costs in 2007.

 

Sr. No Treatment 2012 Cost 2007 Cost Increase
1 Cataract 24,000 16,000 50%
2 Angiography 22,000 14,000 57%
3 Coronary Artery By pass Graft (CAGB) 2,35,000 1,65,000 42%
4 Appendectomy 42,000 28,000 50%
5 Heamorrhoidectomy (Piles) 35,000 21,000 60%
6 Cholecystectomy (Gall Bladder removal) 52,000 32,000 63%
7 TURP (Prostate Surgery) 62,000 37,000 68%
8 Angioplasty (PTCA) with 2 stents 2,45,000 1,55,000 58%

 

The costs of common surgeries have increased by 50-60% in 5 years! This means healthcare costs have increased by 9-10% year-on-year, since the last 5 years. We spoke to Sudhir Sarnobat, CEO at Medimanage. Here’s what he had to say

“The average annual health insurance inflation would be at 5%, if you look at 30 years duration. The hospitals do not increase their tariffs every year. Generally, they increase it by around 15-20% every 2-3 years. This would effectively come to 5% CAGR.” “India is currently having Supply Deficit when it comes to Hospital Beds. But we are seeing a good amount of capacity increase in beds in last 7-10 years which should continue to grow. On the other hand, our population is stabilizing. In 15 years, the equations should change & ease pressure on prices.

India is a developing economy and from credible reports, will continue to be on growth path for next 10 years. After that once the wealth distribution is even, we would see stabilization of inflation (world over that’s been the phenomenon, look at US Medical Inflation for last 5-7 years, it is 4%)” Sudhir added.

Some reports on Hospital infrastructure talk of a major crisis in the making in the Healthcare Industry, due to overflowing demand, coupled with very slow growth in the poor hospital bed to patient and doctor to patient ratio in India, primarily due to deprived participation from the Govt. A Tower Watson Report pegs healthcare inflation in India at 13% for the year 2012.

In my opinion, while costs are bound to rise due to the slow growth in the ratios, on a 30 year horizon they have to plateau somewhere. Looking at this, I suggest, let’s take the inflation year-on-year for the next 10 years at 12%, and then average 5% for the remaining 20 years.

Health Insurance Inflation and Future Costs

Factoring healthcare inflation on Rs. 4 Lakhs of costs expected today, in 10 years, @ 12% inflation, the sum insured requirement would increase to Rs. 12 Lakhs, per member. In 20 years @ 5% inflation, to Rs. 20 Lakhs, and in 30 years to 33 Lakhs. For calculation of floater coverage, take 50% ad hoc for every adult member and 10% for every child, and here’s the kind of cover you will need, for some of the family combinations.

Health Insurance Inflation for Family Floater Policies

So a family of 2 – Self and Spouse will need a cover of Rs. 50 Lakhs year-on-year every year, from the age of 60. This is a huge sum, and looks unaffordable to most of us. So, what does one do? A middle class guy would either have to “afford”, “plan” or “pray” be able to afford such astronomical expenses. Let’s see how we can plan to pay such healthcare expenses.

Solution to the problem

Look at the Present Value of Rs. 50 Lakhs at 10% inflation on 30 years, it calculates to just Rs. 3 Lakhs. So though the problem looks big, it definitely can be resolved by the power of financial planning. Here are the steps we recommend you to create a fool proof plan for your healthcare expenses.

a) Commit yourself to healthy living: Yes, it’s very awkward for a Health Insurance services company, asking you to commit to health, but then we believe that Healthy living is the best form of Health Insurance. Healthy living would of course mean Regular Exercise, Healthy nutrition and No ill-habits. Such lifestyle will simply help avoid huge hospitals bills. Read an excellent article on Health SIP by Nandish.

(b) Given point (a) is a way of life for you, you now need to create a Long term and Short term financial plan, for the unavoidable healthcare expenses, like hereditary ailments (Diabetes, Thyroid), age related (like knee replacement), or infectious diseases (like Malaria), or even diseases like Cancer (which still have many unknown causes. Perfectly healthy people have got cancer, in spite of no ill habits).

Note, if you cannot commit to point (a), your needs for long term and short term funds increases multi-fold, to cover healthcare expenses.

How do you create such fund?

Here’s what I recommend should be your step-by-step health insurance investment plan.

  • Buy Health Insurance, preferably one which covers you for lifetime, and provides a no claim bonus, for the sum insured of Rs. 5 Lakhs individual or Rs. 7-8 Lakhs Floater. If you are buying plans, with Restore options, then the sum insured could be lower at around Rs. 5 Lakhs.
  • Take a good top-up plan, which takes your cover to a floater of Rs. 10-15 Lakhs for the entire family.
  • Invest in a Rs. 5-10 Lakhs critical Illness plan, which covers maximum no. of ailments, especially for the earning members of the family. This will help you get lump sum payment for critical ailments, and compensate for any loss of earnings. You can also explore the option of a more comprehensive benefit plan with your health insurance advisor, with products like Tata AIG Wellsurance, Aegon Religare iHealth, which provide lump sum benefits for large no. of surgeries, in addition to the Critical Illness benefit.
  • Plan a Healthcare Contingency fund, for Rs. 15 Lakhs for individual, and Rs. 25 Lakhs for a family of 4, maturing at age 60. A contribution of Rs. 15000 per annum at 10% return will accumulate Rs. 25 Lakhs in 30 years.

So what’s the total investment for your healthcare financial plan?

Here is the approximate outgo you would incur.

 

Type of Plan Sum Insured Tenure Costs
Health Insurance Rs 5 lacs 30 yrs Premium Rs 6,000
Top up Plan 5 Deductible/15 SI 30 yrs Premium Rs 5,000
Critical Illness Plan Rs. 5 Lakhs/20 Illness 30 yrs Premium Rs 3,000
Healthcare Contingency Rs 25 lacs 30 yrs Investment Rs. 15000

The plan above is indicative and would have to be customized depending on some of the following factors

  • No. of members you want to cover
  • Their age
  • Their health condition
  • Family history of critical ailments like
  • The city where claims are expected
  • The type of hospitals, rooms you prefer.
  • Your lifestyle.

What do you think about health insurance inflation and your thoughts on renewal decision by the companies. Do you think creating your own health care corpus is a better idea rather than depending on health insurance policies?

Is your Company Group Health Insurance Cover Enough ?

Posted on by Jagoinvestor

Are you covered under your company’s group health insurance policy? If you are a salaried person, then in all probabilities you must be having your employers health insurance plan which must be covering you, your spouse, children, and parents or some of them. But a lot of people do not want to take a separate health insurance plan from health insurance companies and just want to continue their employer’s group health insurance cover as it looks most affordable Health Insurance to them. However one should also consider an individual health insurance plan for various reasons. Let’s see a few points which you should think about your employer’s group Health Insurance.

Group Health Insurance

1. Your Employer may take back the Health benefit

Health Insurance costs are provided as a perk in many companies. Health Insurance costs are borne by companies themselves and it might happen that in future your employer might take back the benefit of health cover and tell you that it’s not available now onwards. Either you just don’t get it or you need to pay the premiums yourself, just that they can assist employees to get it faster. The other thing which can happen is that they can also reduce the cover itself to lower their burden.

2. Your company may exclude your parents from the health cover

Its something which has already started in many companies. Earlier parents were part of the employer’s health cover, but these days a lot of companies are excluding parents from the health policy provided to the employees. If this happens then anyways you need to cover your parents with an individual health insurance plan.

3. You might not get health cover with your next employer

This is pretty obvious. Not all companies provide health cover in the same way. What is the guarantee that you will get the same kind of cover and benefits in your next companies? I hope you are not going to argue that you will never leave your current job, many people have this point when they argue that they have the cover with their current employer, but then you never know about the future.

4. Will it help you in retirement?

By now you should have been clear that you need health insurance more for your bad days, when you cross 50 and reach your retirement because health insurance is a long term policy and you should always take it considering it for next 20-30 yrs. Things like lifetime renewal and no co-pay in later years are sought after features these days. So even if your employer provides a good health cover right now, what about retirement? When you go to health insurance companies later to buy the plans, be sure that you will not get it or you will pay in gold!

5. Do you have enough Company Health Insurance Cover?

Not many, In the recent survey we did on health insurance cover, the fact that 60% of people (on this blog) have their health insurance cover less than 50% of their annual take-home, now a lot of them must be having it from their employer. Don’t see that you have a health cover, look at the quantum of the health cover? Ask if it is enough for you? Is it something that can support you in case something goes wrong!

Good point about Employer group Health Insurance cover

I don’t say, your employer’s’s health insurance cover is bad. All I am saying it apart from your company health insurance , you might also want to look at a separate policy , that’s all . Some of the best things which an employer health insurance provides is that its easily available without any limitations and restrictions. If you are an employee and the group health insurance is there, you will get it even if you have any pre-existing illness . No one denies it because of a higher age or any past history.

Make sure you have independent Health insurance cover 

The point is that an employer group health insurance cover is a cover which is linked with your employer and hence dependent on him, Its so tied with your company. You should aim at having at-least one independent health insurance plan in your life which you can cover and control, This should be in addition to your employers group health insurance plan.

Do you agree with these points ? Do you think one should take a separate health plan apart from their employers group health cover ?

How much Health Insurance Cover is good enough?

Posted on by Jagoinvestor

How much health insurance a person should buy? Is 5 lakhs cover enough or it should be 10 lakhs? Should it depend on job profile, city and income level? These are the most common questions which pop up when a person starts thinking about health insurance. Anil had raised this question on comments section few days back. He says –

I am recently married and look forward to start a family. Like for life insurance where you have a referral benchmark which say’s ideal insurance should be ideally be 10 times your salary, what would be an ideal coverage for us (Floater).

Now it’s not easy to answer this question, but we can brainstorm about it and get some ideas. There can be some ways you can think about how much coverage one should take while taking Health Insurance, let’s look at them one by one:

Health Insurance cover in India

1. Depends on Affordability

A big factor which decides how much health insurance a person requires depends on the premium amount. Not everyone can pay the premium for Rs 20 lacs cover, as it will be very huge. However, a person can pay some amount which fits within his expenses- affordability. Like lets say 2% of yearly income. If a person is earning Rs 6 lacs a year, he might be able to pay an amount that is up-to 2% of that yearly – Rs 12,000, which will give him decent cover from today’s standard. So a person with 3 lacs salary can pay for health insurance up-to Rs 6,000. A person with 20 lacs income can pay up-to Rs 40,000 per year. So you do not decide on the cover, but you decide on the premium which you can afford. Obviously, there is a limit above an income level. A person earning Rs 1 crore might not even need health insurance at all! He has so much of wealth already to take care of it!

2. As percentage of Income

One way to look at Health Insurance cover can be percentage of your income, like let’s say 100% of your income can be the ideal figure for your health insurance cover. Like a person earning 12 lacs a year should be covered for 12 lacs cover, a person earning 4 lacs per year income should be covered for Rs 4 lacs health cover. However, there has to be upper limit to this like say 20 lacs! This is because a person earning 40 lacs don’t need health cover of Rs 40 lacs. This percentage will depend on how you think about it, I think 100% of income is good enough, you may feel 50% is fine. As per a survey done by jagoinvestor. as high as 60% of the health insurance customers have their health cover less than or equal to 50% of their yearly income, which is quite low. Here are survey results

Health Income Survey by Jagoinvestor

3. Constant + Function(Past expenses)

If you have spent Rs 2 lacs in past 5 yrs on medical expenses and hospitals, one might want to consider it as the basis for calculating their health cover requirement. Like a person earning 6 lacs a year, who has spend Rs 2 lacs in past 5 yrs on health might be more inclined to take a higher cover than someone who has not spent anything in last 5 yrs. While the first person might feel a cover of Rs 5 lacs is important, the second person might feel Rs 3 lacs is good enough- because he has not experienced the pain of expenses on Health Insurance. So how about this

Health Insurance cover = 50% of Income + 100% of last 5 yrs expenses on Health (hospitals)

So in this case, the first guy will take a cover of 50% of income (6 lacs) + 100% of 2 lacs = 4 lacs in total. However the second person will take it for Rs 3 lacs only (50% of income).

4. Average bills these days

I think the most logical way of looking at health insurance cover can be, simply the expenses in the worst case for medical treatments these days for different kind of hospitalization. If you list down 10 things for which people are hospitalized and which are covered in health insurance and lets say the average bill of that comes to around 4-5 lacs, you can say that it can be the right figure for you.

5. Your Method

This method is your method. Each and every person has his/her own way of looking at a problem and I would like to hear how you think on this subject. So, I request you to please open up your thoughts and share on comments section what do you think should be the right health insurance cover and how it should be calculated ?

What are your thoughts on this? In your view how much health insurance cover is good enough ?

Did you start your Health SIP ?

Posted on by Jagoinvestor

I begin each day of my life with a ritual of receiving one sms around 5:30 am from my fitness coach Sanjay. The sms reads “I am coming at 6:00 am so get ready” I take a look at the sms and reply “yes”. Initially, I thought that my ritual is to exercise every day, but my real ritual is saying Yes to my coach because, the moment I say YES to him my laziness goes away, my reasons/excuses disappear and I look up to the ceiling of my room and say to myself “Get ready Nandish it’s time to invest in your fitness.” This ritual has had transformative effect on me. I know it is absolutely no fun to wake up in the dark and push ourselves to go for a tiresome run or to hit the gym. But if you really want to cherish your wealth in later years of your life start forming healthy habit of exercising. One of the best website you can explore to get yourself educated on various exercises and diet is http://exrx.net/.

Health SIP

We have a rule if you do not exercise you can’t become our coaching client no mater how much money you have. It is because health is your true wealth. Let me share what we ask to our coaching clients

One of the Questions that we have asked all the people who have worked with us is

Is your well-being on your priority E.g. Do you Exercise/Go for a walk or play any sports? (If the answer is no this will be the first thing we will ask you to start, this will allow you to enjoy the wealth that you are going to generate in life)

Here are some Real Life answers from real people that I have received; I am sharing this so that you can learn from other people’s sharing

  • Yes, I am health conscious and selfish when it comes to health
  • I don’t exercise regularly
  • I used to. I will be resuming soon
  • Yes, for the past 7-8 months I have been going to gym regularly and have a very balanced diet.
  • To somewhat no. I try to maintain a healthy life-style, but fail occasionally.
  • Yes. I am too occupied to start with any of the activities. I am currently working on this.
  • Yes. My wife is an athlete and she pushes/motivates me to stay healthy. I walk every evening and try to maintain weight. I very strictly believe that Health is wealth. There is no use of money at all if I cannot stay healthy. E.g. – Yuvraj Singh – what will be the use of so much money if cannot be cured.
  • Yes. I go to Yoga in my office, daily. I have started this since last 8 months and doing it regularly<90% attendance>.
  • Sporadic exercise. Swim and play badminton regularly.
  • This is exactly what I don’t do at all. All I need to do is start ASAP.
  • Yes. I used to walk daily till 2 months back. Due to back pain and monsoons now it’s held up for two months.
  • I keep doing exercises on and off. More than 3 months back I have taken up Karate. I do that twice in a week, and I am quite sure that I am not going to quit that
  • I hardly do the above, but I will try to make it as a habit very soon.
  • No. My physical activities have reduced
  • Yes, I believe it is. I have started to go on a diet plan and been on it for a couple of weeks now. I have also started to go to fitness centre (tread mill and weights) for a week now. I hope and believe I can continue this.
  • I thoroughly enjoy sports. I play tennis and walk quite a bit. I also do yoga fairly regularly.JMy biggest priority is stay healthy and fit – a fitness freak, if you will. (I wish I had the same drive for money, ever since started earning!

Here is what one of our clients wrote me – “I have reduced my weight by 12 kgs in 6+ months and my BMI is close to ideal though still a bit above. Feel so much more energetic. How is your health investment doing?”

Some Need Shock Therapy

In one of the readers meet held at pune one of our client shared his life changing experience with the group .Once he had to participate in check-up camp organized in his company. He got his tests done and the doctor gave him a very serious look and told him to move to a separate room and relax there for some time. Doctor came after some time and said everything is going to be fine, with this his tension was at its peak. Our client got restless and asked the doctor “what’s the matter?” and doctor said “Diabetes” Our client’s world got shattered in that moment, his heart sank and his throat got dry.

Doctor saw all this and then said, “You are not having diabetes my friend but you are close to having diabetes and so it was necessary for us to give you some shock Therapy.” Our client bought new shoes the same day and was all geared up to take charge of his health. The next day, even with heavy rains, he was jogging in the park…. Do not wait for important things to get urgent, act today, take the learning’s from this experience.

Here is something that I received from my father a few days back

The Dalai Lama, when asked what surprised him most about humanity, answered, “Man. Because he sacrifices his health to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then he dies having never really lived!”

Start your Fitness SIP

Sharing from my personal life, I avoided doing physical exercise for years. My reasons were bigger than my commitment. I broke my reasons 2 yrs back, I hired a Fitness Coach who comes to my home and makes me do a lot of work-out. The fee that I am paying him for his services, I consider it as my HEALTH-SIP. I am familiar with all the exercises and capable to do them on my own but those 5 extra counts that he makes me do is only possible with him. I take this opportunity to thank my coach Sanjay, his commitment is amazing.

Some people…

  • Take better care of their pet than what they do themselves
  • Take better care of their gadgets than what they do themselves
  • Take better care of their car than what they do themselves

Focus more on your health than buying health insurance

When I coach people I see that people are more committed to buy the right health cover and more laid back on focusing on their health! Your body is the only thing which is going to stay with you for the rest of your life. See that you take care of yourself because it is said that your body is the only place you are going to live in for the rest of your life. Connect with your true wealth first, we have heard this since childhood health is wealth but most of us forget this when we grow –up. Getting health cover is important but do not deviate focus from your health, make a commitment you will live your life in such a way so that you do not have to use your health insurance ever. (Unless it is an accident or some other major health issue)

Health Insurance for parents

We interact with many people who want to buy health cover for their senior citizen parents. It really becomes very difficult in getting health cover after certain age and even if you get cover it comes with high premium. More than health cover start giving time to your parents, put 2-3 lacs aside (you can put even more if you have) for them and you can have your own health cover designed for your parents. All they want is your time, your attention and unconditional love. Encourage your parents in doing light exercises or light yoga . One very powerful meditation is conducted by organization called vipassana Meditation, they have world wide centers http://www.dhamma.org/ . My parents have done the same and I think it is the greatest gift we can give to our parents. Enroll your parents for naturotherapy, see that they have proper intake of fruits and dry fruits. See that your parents are not feeling lonely and they are around their friends. Take steps that make them happy this is far far better than saying I am a responsible son I have bought health cover for my parents.

Conclusion

As people are turning towards term plans a lot of people also turning towards joining gyms, going for a brisk walk, hiring a fitness coach, taking advantage of fitness facilities provided by companies. This is your true wealth. I always tell people that at the age of 55 or 60 you might have a lot of money but what if your body is not aligned to cherish that money? Stay healthy, stay committed and stay FIT. Do share what message you got from this post, if you are one of those who are not exercising simply start from this moment. After you complete reading this article do 5 push-ups, climb a stair, just do something in this moment, take small steps, engage in activities that you enjoy doing and change your relationship with health and fitness.

This article is written by Nandish Desai 

This week action ?

  • Do you exercise? Yes or No
  • Hire a coach or join a gym in this week?
  • What one action you can take to bring more life in your parent’s health?

Personal Accident Insurance Policies in India – With Comparision

Posted on by Jagoinvestor

Did you ever know someone who met with an accident and he was the main bread-winner of the family? Mostly yes. A personal Accident Insurance plan is policies that cover a person from accidental death, accidental disability and several other features. There can be very bad consequences of meeting an accident like death or pause in income, ranging from a few weeks, months to even years.

A term plan can only help in death and a health plan can help in case you are hospitalized, some of these policies also offer accidental riders, but these riders are not as comprehensive as standalone Personal Accident Insurance policies have. In these articles, let’s see the benefits and features of Personal Accident Insurance policies.

Ajay was one of the best employees of his company based in Bangalore . He bought a term plan as soon as he realised the important of securing his life. He also bought a health coverage to secure his wealth (not health). He had recently bought a home through loan and he was also investing for his 2 kids future . Ajay was the only one earning in his family which also had his mother as dependent on him.

It was the last working day of the week just before Diwali holidays and he had to rush home early that day. He was as attentive while driving as he was always, but he forgot that accident happens not because you are careless , but because other can be damn careless … While Ajay was taking a u-turn another car slammed into his car which was coming with a lot of speed.

It was a serious accident and what Ajay never imagined happened ! . Both of his hands were non functional after the accident . Being a senior programmer in his company, he knew that his future is lost now . This one incident changed him life. While his income stopped, his expenses at the house, EMI etc had to still continue.

His term plan could not pay him because he was not dead. His health insurance plan covered the expenses for hospitalization, but only covered for a basic amount incase there was a temporary disablement. But Ajay case was not covered in any of his existing insurance policies. At this point in time, if Ajay had a Personal Accident Insurance Policy, it might have helped him a lot.

If you are a reader of this blog. Most probably you must be living in a big city, most probably you are salaried class and obviously you must be travelling from home to office and office to home, you will do it every day, for months and years .. that would be thousands of days. The chances of death or getting hospitalized for some illness is far lower than the chances of meeting an accident these days. So in today’s world more than a Life Insurance and Health Insurance, the first thing which you need is an accidental insurance policy and why not. Its costs so less that one can afford it very easily. You can buy a 10 lacs accidental cover anywhere from Rs 800 to Rs 1,500 per year depending on the company and benefits. But one thing is sure that it’s very cheap.

what a Personal Accident Insurance policy gives you?

Think for a moment, what all can happen if one meets an accident, what can happen, what are different kinds of end results of it? An Personal Accident Insurance policy covers almost all of them. Below is a table that gives you an idea of what kind of situations are covered by accidental policies.

 

1. Death In case of a death due to accident, the policy would pay 100% Sum Assured to the nominee. Some companies also pay a “Children?s Education Bonus” of 5000 or 10000 for a maximum of 2 children.
2. Permanent Total Disablement This means that in case there is a permanent total disability, in which a person is disabled for life, the SUM assured is paid to the person. Some companies also pay around 125% or 110 %, depending on the company. Example – Loss of

  1. both hands or both feet
  2. one hand and one foot
  3. one (hand or foot) and an eye
  4. loss of sight of both eyes OR speech OR Hearing of both ears
3. Permanent Partial Disablement In this case, a small percentage of SUM assured is paid on a weekly or monthly basis. For example – 1% of the sum insured is paid every week up to 100 weeks. Example below

  1. Loss of Index Finger or thumb
  2. Loss of hearing in 1 ear
  3. Loss of 1 eyesight
  4. Loss of 1 hand
4. Temporary Total Disablement This means that for some weeks or months a person is totally disabled and will not be able to work and earn money. In this case, most of the companies pay a part of the sum assured, some pay 100% and some pay 50 %, there is also a cap in this case, like a maximum 5 lacs or 10 lacs. Example below

  1. Bed rest of next 3 months
  2. Fracture in hands or legs

Other Features

  • Some companies cover claims arising out of Terrorism or acts of Terrorism
  • No health check-up required for policy issuance
  • Worldwide coverage of the policy
  • It gives coverage starting from 5 lacs to 50 lacs
  • Free lookup period of 15 days
  • 5% per claim free year to a maximum of 50%.
  • Family discount of 10%

What is not included (Exclusions)

Accidental policies do not cover Deaths or disablement because of

  • Intentional self-injury, suicide or attempted suicide.
  • Influence of intoxicating liquor or drugs
  • By committing any breach of law with criminal intent
  • Suffering from any pre-existing condition or pre-existing physical or mental defect or infirmity.
  • Aircraft pilots and crew, Armed Forces personnel and Artistes engaged in hazardous performances are totally excluded

Premiums do not dependent on AGE

The premium of accidental policy does not depend on age. So if you are 25 yrs old or 50 yrs old, the premiums would be the same, rather it would depend on your working conditions and the nature of your job. If you are a software engineer working in Bangalore, then your chances of meeting the accident are different from an army personal working in the border or a worker in a factory that has dangerous machinery. So each kind of job profiles are divided into different risk level, sometimes it’s 1,2,3 and sometimes it’s just 1,2. Risk level 1 are those who are less risky and their premiums are lower and risk level 2 are high risky category and their premiums are higher. Let me give you an example

underground mines, explosives, magazines, workers whilst involved in electrical installation with high tension supply, jockeys, circus personnel, engaged in activities like racing on wheels or horseback, big game hunting, mountaineering, winter sports, rock climbing, potholing, bungee jumping.

 

Risk Level 1 (Low Risk) Risk Level 2 (High Risk)
1. Doctors
2. Engineers
3. Bankers
4. Accountants		 1. underground mines workers
2. jockeys, circus personnel
3. Mountaineering, rock climbing & bungee jumping,

 

Note that some companies have a list as 3 different risk levels – 1,2,3

Examples of some good accidental policies

Below I am listing down some of the accidental insurance policies and their different features. If you see all of them, you will realize that all the policies have something good or bad in them. This chart is made by collecting information from different portals and companies’ websites. Note that the premiums below are for Low-risk professions (Level 1)

Accidental Insurance policies in India

If you see the above table, you can see that on absolute level Bajaj Allianz seems to be the best option and it’s the recommended one. The best part is that the claim settlement ratio is high and that’s the biggest parameter people look for.

Please comment on what do you feel about Personal Accident Insurance policies and what has been your experience in that?

 

 

Health Insurance is Wealth Insurance

Posted on by Jagoinvestor

Does Health insurance or Mediclaim Insurance really protect your health ? Ask yourself this question and deep down in your heart you will hear someone shouting , No Idiot ! , There is no policy which can protect your health ! . Health can only be protected by right diet , right exercise and right lifestyle (download this ebook). Unless you are doing any of these your health can’t be insured. So what is Health/Mediclaim Insurance, when it does not protect your health ?

In reality, what we all fail to realise is that Health Insurance is actually “Wealth Insurance” . When you buy a health insurance policy, all you are doing is protecting your wealth from those scenarios which would ask for a lot of money from your wealth. So you have to understand the importance of buying a health insurance policy. (You can buy it from Coverfox website)

I was talking to some one few days back in Goa (Yes, I go on vacations too) who rejected to take a mediclaim policy because of higher premium due to his diabetes. I told him that I hear something out of his decision of not buying a health insurance plan. He was surprised to hear this because he didn’t say anything else other than “I will not take health insurance” . So I told him what I heard.

I told him that I hear from him that he is ready to lose a big part of his wealth in few years if he is detected with any further illness . I told him that I hear that he didn’t want insurance company to pay for his medical bills , but was ready to bear the cost on his own. If he has to spend 5 lacs , he will pay it . If its 15 lacs , he will pay it ! and even if its 30 lacs (after 12-15 yrs) , he will still pay it .

Protecting Wealth is much easier than Protecting Health

I told him that by choosing not to buy a health insurance plan, he is accepting that he is ready to bear a big cost in future incase the situation demands . A lot of people do not think about health insurance like this. While this is the internal truth that the job of health insurance is to protect your wealth and not your health, a lot of people just fail to look at it this way .

So if you love your Wealth , buy health insurance.

For health , you can take other routes like eating right food, physical exercise daily , having a positive and a good life style (see this post from subra)  .. But the sad thing is protecting your wealth is much easier than protecting your health 🙂

What are your views on this ? What have you done to protect your health and wealth ?

11 Health Insurance Myths which you thought were True

Posted on by Jagoinvestor

Health Insurance sector is such a new thing in India that a lot of people have dozens of health insurance myths regarding various things and because of that they feel that this whole thing is so complicated. Today I will burst some of your long-term medical insurance myths which will help you choose right products and also build right expectations from health insurance policies.

 24 hours Hospitalization is necessary for making a Health Insurance Claim.

This clause always reminds me of an incident. A little over a year ago, we were having our weekly meetings, when a doctor friend who owns a hospital in Mumbai frantically called us. A woman was making a ruckus in this friend’s hospital, insisting doctors continue hospitalization of her son and discharge only after 24 hours, as her “advisor” had informed her that they would get the claim only if the hospitalization is over 24 hours. This incident brought to light the magnitude and the level of fallacies customers have about Health Insurance. Advisors, Representatives, Telemarketers, and even hospitals and customers have frazzled their throats out on the 24 hours clause, while explaining or even using the product.

Though, the policy does mention this as one of the clauses, the 24 number in real world of claims holds lesser importance. The clause, in spirit, requires the hospitalization to be “necessary” more than it to exceed “24 hours”. This was purely from the general understanding that most hospitalizations less than 24 hours are treated under “Out-patient” (treatment at the Doctor’s Dispensary) not covered under a Standard Mediclaim. Hospitalizations (like Cataract), though required 2-3 days earlier, which are now possible due to advancement in medical science in less than 24 hours are covered, while, hospitalization by an insured for more than 24 hours for getting his routine diagnostic tests done, while no active treatments are being carried out, would not be payable under Mediclaim.

Conclusion

The thumb rule of a whether a claim is payable is not 24 hrs hospitalization but whether the hospitalization was medically “necessary” or not?

You must compare Pre-existing waiting period, always.

This is a clause that most people looking for a Mediclaim are confused about (17 Most asked questions in Health Insurance). I speak to many customers whose requirement with mediclaim is that they do not want a waiting period for pre-existing ailments. This, in spite of their entire family being completely fit, without any ailment, whatsoever. Somehow, the clause again being so popular has brought in its own confusions for customers. In reality, the 4 year Pre-existing exclusion on ailments is applicable to ailments existing at the time of applying for the policy, and not any other ailments. If you do not have any ailments or conditions, you have no pre-existing waiting period.

Conclusion

When applying for a Mediclaim, if you are completely healthy, the Pre-existing exclusion clause is not applicable to you

Cashless is an on-call Emergency Service.

Ever since it was introduced as a value addition to Mediclaim, Cashless has remained a buzz word. To a level, that for a lot of people, Cashless became a prefix, or, even synonymous to Mediclaim. The reason for the cashless concept getting popular was obvious; it was a great value add, which helped customers tide away the burden of large payments on their bank account, documentation and of course, the stress of waiting for the claim cheque. Yes, Cashless can do all this, but expecting it to work when there are emergency funds required for Hospitalization is asking for too much.

You should understand the Cashless mechanism as a concept to know why it cannot be depended on at the time of emergencies. Cashless is an arrangement between the Health Insurance Company/TPA and the Hospital where, the Hospital agrees, under contract, to grant credit facility to the Insurance Company/TPA against authorized claims. Such an arrangement is only for authorized Claims, and not for all claims. TPAs/Insurance Companies, hence, need to assess every claim received, against the policy terms and conditions, to authorize payment. Such an authorization could require additional information as well as documents and hence can take anywhere for 4 hours to 2 days of time. In their role, the TPA or the Claims Team at the Insurance Company would have to do its job of evaluation of the claim, irrespective of how urgent the medical admission or treatment is. Cashless will help you save the burden of processing a reimbursement claim, but it cannot provide you the convenience of on-call emergency funds.

Moreover, one should also note, unlike the hospital cashier, Insurance Desks in hospitals (which coordinate for cashless claims) have fixed work-hours from 10.00 AM to 7.00 PM. Cashless process and approvals after 07.00 PM are processed by the Hospital the next day. Hence, though the TPA provides 24/7 service, the cashless process may not move, once the Hospital stops working on it.

Conclusion

Expecting Cashless to work as an on-call Emergency Service is foolish. You should plan your emergency medical fund, as well as ensure you have good unutilized credit card limits, always.

You must compare no. of Day Care Procedures covered

Most Insurance Companies (specially the Private ones) flaunt a large list of more than 100 Day Care Procedures being covered under their policy. In fact, it is a highlight of their product pitch. The truth is comparison of such numbers can be very misleading. One company could list every procedure, while another could list macro-level treatments, including the listed procedures of the former. For instance, a person who compares Apollo Munich’s Easy Health Insurance which covers 140 Day Care procedures, with an Oriental Happy Family Floater which covers only 26 procedures would feel that Apollo has wider cover on Day Care Procedures. Believe me, but it could actually be the reverse. How? Oriental promises to cover Eye Surgery (a broader definition) in its daycare list, compared to say an Apollo which lists 15 specific eye treatments, which results in a larger number. Now, if the treatment being carried out is an eye surgery, which is day care but not a part of the 15 specific treatments, Apollo or many other Private players may not pay, whereas, in the case of Oriental it would get paid in the broad definition of eye surgery. By providing a specific list of surgeries instead of a macro area of treatment, the coverage under Apollo may actually be more restrictive in the long run than Oriental’s wide area of treatment wise list.

Conclusion

A short list of procedures could be wider than a long one. Do not compare the no. of Day Care Procedures.

You should check the list of Network Hospitals.

Many customers, we have interacted with demand Hospital network lists. They select the mediclaim product depending on whether their preferred hospitals are part of that Insurance Company’s list. What they fail to realize is that a Hospital Network is ever-changing. Insurance Companies regularly blacklist defaulting Hospitals. Hospitals blacklist or refuse cashless of certain Insurance Companies/TPAs for delayed payments. What is clear from this is that there is no fixed or contracted list of hospitals between your Insurance Company and you – which means there is no assurance that the hospital name in the list, which you are depending when you buy the policy, would exist in the network when you have a claim, say 4 years down time.

Conclusion

Network List of Hospitals are not fixed or contracted through policy terms. Do not depend on the network hospital list to decide a suitable product for your family. The list could change even tomorrow, in fact it could change any moment.

Capping on Room Rent is bad:

Public Sector (PSU) Mediclaim products and their current terms and conditions are evolved from experiencing and analysing millions of claims spread over more than 20-25 years. Hospital Rooms are classified into various categories like General, Shared, Private and Deluxe Rooms. Earlier without the room rent limits, for the same treatment, a person with a sum insured of 1 Lakh paying a measly premium of say Rs. 2000, would have access to the same category of room, as a person who pays 5 times the premium, and takes a Rs. 5 Lakhs cover for himself. The 1% and 2% Room Rent Limits in Mediclaim brought a clear sync between the kind of premium one pays and the eligibility of room. With such cappings, an individual who pays a high premium gets a better room, than one who pays a smaller premium, for the same treatment, which is fair. It’s like any other product with categories, like Indian Railways, providing you better facilities/services, as you move from 2nd Class to 3rd AC to 2nd AC and so on. In my opinion, sooner or later, Insurance Companies would either have to hike premium for lower sum insured or bring in a capping of some kind. For instance, the newest health insurance company – Max Bupa, has a restriction on the type of room according to the sum insured selected, instead of a “no capping on room rent” feature.

Conclusion

Cappings are good for Health Insurance as a community fund. Cappings could actually be helpful to customers in the long run.

Health Insurance Plans sold by Life Insurers are the same

The highly advertised Health Plans from LIC are Defined Benefit Health Insurance Plans, sold as “hassle free” alternatives with guaranteed payments. These plans should not be considered as a substitute to Standard Health Insurance plans sold by General Insurance Companies. These plans provide fixed benefits against no. of days of hospitalization and/or surgeries. These plans do not take care of healthcare inflation. For instance, with 18-25% healthcare inflation, a fixed benefit for Angioplasty at say, Rs. 1,50,000/- would miserably fall short in 10 years. Defined Benefit products are actually supplementary plans which provide a cover over allied costs of hospitalization including loss of earnings, if any, but such products surely cannot be a substitute to the good ol’ traditional mediclaim. Read more about the difference here.

Conclusion

Beware of what you buy. A Traditional Mediclaim should be the first product you buy to cover the financial risk of healthcare expenses of the future. Defined Benefit Products are supplementary and not substitute to Traditional Health Insurance.

Health Insurance is a Tax Saving Tool:

A large Healthcare expenditure can severely affect your financial planning for the future. The goal when you buy Health Insurance should be to financially insure your family against such large scale healthcare expenditure. Buying a health insurance product blindly, for the 80D tax benefits, is a wide-spread fallacy, which has left a large no. of people underinsured or insured with products which are not suitable. The worst part is most of them are unaware of this.

Conclusion

Health Insurance at its core is not a Tax Saving Instrument. It could save you much more than your tax, if you invest wisely.

There will be no changes in the terms of the Mediclaim I bought:

Expect changes in your product, terms. Don’t be surprised. The Health Insurance companies and other stakeholders in India are going through a mindset change. Losses in Health Insurance are no longer acceptable by key stakeholders at Insurance Companies. A lot of streamlining and normalizing in premium, terms, benefits and procedures, which have already begun, is expected in the next 5 years. Group products would turn expensive, and restrictive. Parents would be out of most Sponsored Employee Mediclaim Covers. Large and small tweaks are expected in Retail/Individual products and processes, especially from new and private players who are till experimenting and understanding how to make a long term sustainable (read profitable) product for the Indian market.

For instance, last year, PSU Insurance companies tightened the procedure of intimation and submission of reimbursement claims. Customers who were not aware of such a change faced harsh action of denial of claims, and lost good money. 

Conclusion

Ensure you are updated with changes in the terms and procedures of your Mediclaim Product. Ensure you have recruited a good advisor who keeps you posted on such changes.

I can destroy Mediclaim Policies once they have expired.

Don’t know how many of you have observed at the time of renewals, but PSU companies and their divisions are infamous in the industry for changing their TPAs year over year. With TPAs being the custodian of claims, change in TPAs could result in scattered claims information amongst various TPAs across years of continuous renewals. Hence, when there is a claim, the TPA in all probability won’t have information regarding how long you are continuously covered, an essential data point to approve claims, especially, and those treatments which had a waiting period at entry into the policy. TPAs for evaluation of continuity may demand policy copies of past 3 to 4 years. Hence, destroying policy copies records have cost many customers lot of stress in proving continuity of cover. Yes, we know that it is ridiculous for the Insurance Company or its representative to ask for their own record from the customers, but then this is how it is. A good health insurance advisor knowingly would keep a repository of all policy copies, to ensure such queries do not create roadblocks in a smooth claim settlement.

Conclusion

In addition to the current one, keep copies of at least 3 previous year policy copies. Ensure your advisor also records them.

My Friend, My Health Insurance Advisor

No offence to agents, but in our interaction with Customers, we have noticed time and again, that most customers, who were found with a wrong health insurance product, bought these either from a friend, a friend’s relative, or a relative, or a relative’s friend. Most of these customers did not spend enough time in selecting an advisor, and relied on pure reference. Most of these agents selected were Life Insurance agents, who did not have a detailed understanding of mediclaim products, neither were they providing any real expert assistance (beyond picking of forms, and providing the TPA’s no.) at the time of claims. The advisor selected should have the capability and the intention to provide unbiased advice, the advisor should forever own the product they sold you, and provide services across the Health Insurance service cycle, including Purchase Assistance, Records management, Claims Assistance and Renewals. A good advisor would be able to hand hold you through the dynamic transformation that the Health Insurance industry in India, is witnessing and will continue to witness for the next 2-3 years.

Conclusion on Health Insurance Myths

Select an advisor on merits and the services he demonstrated, and just not merely on reference.

 

What was the biggest and most valuable learning for you out of this article ? How many of your health insurance myths were really broken ? Please share it on comments section .

An open letter to Health Insurance Company from its customer

Posted on by Jagoinvestor

Dear Insurance Company

    1. ,

Hi, I am your Mediclaim Customer. I am 30 years old, married, have a kid. I own a house in the suburbs of Mumbai and have recently bought a small car. I am well read, and hence fairly aware of basics of financial planning and securing my future. Yes, I believe in Insurance. I bought my first insurance policy (term life) when I was 23 years old. Yes, I know, I am the type of customer, who you vie for – I am the one who appears as “Sec A2” – target customer right at the top of all your sales spreadsheets and presentations.

Health Insurance India

I have been your customer since 2007. It started off pretty well. I received fairly good service from your end. But…lately, I have been very uneasy with our relationship. In fact, I think I have lost trust in you. OK. Stop getting surprised; I know you are  part of a group valued in Multi billion dollars ; I know you have presence in 100s of countries worldwide, you surpass all the solvency norms set by the regulator, and yes, your claims settlements are improving . But I have still lost trust in you. Can you help? Please give me your 5 minutes to explain.

4 years back, when I was 26 years old, I decided to buy my own health insurance policy. I had a cover in my dad’s policy, but my calculations showed that I was not covered adequately. I therefore approached a health insurance broker. He did a good job, helping me compare various mediclaim policies available in the market, and took me through how this whole mediclaim thing works. I signed up for the most attractive one (the one which had the best features and the lowest price).  I was proud I had done my homework, just like my dad would.

Two renewals had passed, when I received the 3rd years’ Renewal Notice. The renewal notice talked about increase in premium by a shocking 500%, with the reason “adverse claims ratio and Medical Inflation” mentioned on the letter. A premium of Rs. 3000 for 2 Lakhs coverage for a family of 3, has increased to Rs. 13000! OK, I understand Medical  inflation, but I am sure it wouldn’t have been grown more than 50%, then how was the remaining 450% increase in premium to be understood? Did I have a role to play in the adverse claims ratio you faced? Could I have helped avoiding it? At first, I was sure, the premium mentioned was a printing error, but when I realized it was correct, I felt cheated and went berserk. I called the Broker (who himself was shocked, and worried), set up con-calls with the Insurance Company’s representatives, escalated the matter to the regional office, all I received were templated/recorded answers….Phew…I finally gave up.

I refused to renew the policy with this company, and heroicly pledged not to deal with this organization ever. My Broker suggested I port my mediclaim policy to another player. This time, I made sure this player was an ethical, reliable name. I finally zeroed on to a large Insurance company which had an alliance with supposedly “the world’s largest insurance company”.

I moved on.

Cut to today, I recently received a call from my Broker, the health insurance company had removed the No Claim Bonus of Discount completely from my renewed policy this year, without citing any reasons at all. I got this strange feeling of déjà vu.  Forget prior information, I was expecting some communication from this big brand, but there was none. In this world of extreme transparency and hyper competition, I am amazed at this unusual apathy shown by the best of world Health Insurance Companies in India. (Read 17 Most asked questions in Health Insurance)

When I called the Insurance Company representative, all he said is that Medical Insurance is a “yearly contract”, and terms are subject to change on renewal.  A yearly contract!??!!? Whoa? When this medical policy was sold (twice by different providers) to me, I was explained various clauses in details like 2 years waiting periods, 4 years continuous renewals and the USP – “lifetime guaranteed renewal”. How can a mediclaim which assures lifetime renewal be a yearly contract?? Isn’t this a classic paradox?

OK, I know you are busy….So let me stop complaining, forget the past, and give you one more chance, the last one. Let me plan for my all critical post retirement/old age Healthcare costs. So now I understand the mediclaim policy is a yearly contract. I understand, you are making losses, you are unable to control the claims in Health Insurance and you are “forced” to make these “small” changes in the contract, every year. And yes, I should feel fortunate, that second time on, you atleast did not increase the premium by 500%.

I understand all that, but looking at the rampant changes you have been making in the policy wordings and process, I am really in a fix. I am now not sure what the policy would evolve into when I reach my old age. The way things are moving, the one thing, I am sure of is that the policy would be gravely different from what it is today (I am sure, a money making product for you, by then)

So, How do I predict the policy conditions and plan my post retirement healthcare expenditure?

Till when, and to what extent you would keep changing the terms? How do I assure myself, that the terms would be favorable for someone like me who bought his policy at 26, paid you premium, without claims for 14 years, from someone who is 40 that time and is buying a fresh policy??

Now, I am getting really confused. When you sold the product you encouraged me to buy these, clearly calling them “long term investment”, and now, on renewal you are calling it a “yearly contact”. Would you continue to guarantee lifetime renewals, or would you add restrictions on co-pay, remove no claim bonus, remove all large hospitals from the cashless network or worse, spike the rates by 500% every year, when I am growing older?.

Now, it’s all boiling down to plain trust. How should I trust a selectively transparent, for-profit organization like you? Is Mediclaim a policy with long term commitments or is it a yearly contract?

Would love to hear an answer. Can you help?

Thanks,

Your Health Insurance Customer.

Disclaimer : Though, the concern being raised is real, please do note that, this is a work of fiction by the writer. The Insurance companies described in this post, do not add up to targeting any specific company.

This article originally appeared on Medimanage blog and reproduced on this blog with their permission.

17 most important questions that you should know before buying Health Insurance

Posted on by Jagoinvestor

Are you confused about many things when it comes to Health Insurance in India ? Are you afraid of rules and regulation in Mediclaim policies ? Don’t you have a clear idea about how will you deal with various things in Health Insurance and delaying your decision of taking a Health Policy ?

Today we will look at most frequently asked questions in Health Insurance try to answer those questions.

health insurance

 

1. Can a person get claim from his own company and spouse company if they are covered under both companies ?

Yes, if both husband and wife are covered from their employer, they can claim from insurance provided to them by both the companies.

For e.g. if husband is covered for 1 lac under group insurance policy from his company (and her spouse is also covered under her husband company policy), and the same situation exists vice versa, both of them are then, actually covered for 2 lacs each; 1 lac from their company and 1 lac from their spouse’s company.

Now if something happens and husband gets hospitalized and expenses are 1.8 lacs, then husband can make a claim of 1 lacs from any one of the company and remaining 80k from other company. If you have cashless facility then you just show both health cards. If you don’t, you can get reimbursed by insurance company.

One important point worth noting is that during reimbursement, one should apply for the reimbursement first to his parent company and then to the one of his spouse. See some hidden health insurance policies

2. Do we have to notify the company about any illness or habit developed in between?

No, we are not required to notify the company regarding any complication or health issue. If the policyholder is hospitalized, the company will automatically come to know of it. Otherwise, no need to inform the company about any such policy.

If you notify the company, your premium for year after notification will increase, if it is under their list of illness to be checked. If you don’t notify the company and when you go for a claim, they will come to know that it was developed earlier and the claim will be settled accordingly and from next year onwards they might put loading on it (All these reasons vary from company to company).

So whether you tell them or not, it’s the same thing. They have doctors panels with whom they check your details before giving you the claim.

3. Does Health Insurance cover everything from accident, surgery, normal hospitalization ?

Yes, Health Insurance covers you for everything, provided you were hospitalized, be it for any reason; due to accident, illness, or disease. If someone met with an accident and he is hospitalized, then his mediclaim policy will pay for his bills, no exceptions.

Watch this video to know what are the things to look for while choosing a health insurance plan:

4. What are the advantages of sticking to one Health Insurance company for a long time ?

The plus point of sticking with one company is that if someone is suffering from any pre-existing disease at the time of commencement of policy, those complications will be covered after 4 years. Until portability is introduced in India, this is the single biggest advantage to stick with one company for long.

Another advantage is that when you have a continued policy from any insurance company, after few years you get bonus or discount in premium.

For example: Suppose you have a policy of 3 lacs and you are with the same insurer for past 4 years you can get a bonus of 50% i.e. you pay premium for 3 lac only but you get coverage of 4.5 lacs. Similarly some companies don’t offer bonus but they offer discount in premium i.e. for coverage amount of 3 lacs you pay lesser premium than actual amount.

So if you don’t have any serious problems with the insurance company then it is better to stick to one company.

5. Can NRI’s take health insurance? Can they travel to India for treatment and claim? What about emergency situations ?

Yes NRI’s can take Health insurance in India. They can definitely travel to India for treatment and can claim it. however they will have to show their residence proof, ITR and a few other documents. If they don’t have those documents, then they are not eligible to get insured in India.

The cost of treatment in India is different and cheaper than countries like USA, UK and other European countries. The premium amount computed depends on Indian conditions and parameters. So if a NRI has health insurance form Indian company, that person would be paying premium as per India actuaries and obviously cost of treatment in his residing country would be higher than India.

For example:

If a person get dengue and he is very critical and requires urgent hospitalization, the cost of treatment in India would come up to 1-2 lacs (and this is on higher side.) The same treatment would cost around 10-15 thousand dollars in US so this burns a hole in insurance companies’ pocket.

So for treatment the person has to come to India and they don’t offer compensation for treatment there. Some Rules about NRI insurance and Investments

6. How to claim successfully in case of emergency and planned hospitalization?

The most basic fundamental for a smooth claim process is keeping all your documents up to date. If you have a past history of illness, make sure that you submit those documents too, because the TPA department will come to know whether it’s a pre-existing disease or not.

While submitting your documents make sure that all the documents are proper and there is no missing document pertaining to your illness. This will just give a chance to TPAs to make excuses and you will have to run for your money.

It’s worth noting that in case of planned hospitalization, if you inform your mediclaim company in advance and take prior authorization, everything will be settled by the mediclaim company or TPA, without the policyholder been required to submit any document.

7. Is it better to take accidental policy separately or mix it with term insurance as a rider?

If your accidental policy is a rider with some Term insurance (9 most asked questions about Term Insurance) then you must take care that it covers everything what accidental policy should cover. Generally when a policy is offered as a rider it does not cover each and every aspect.

For example: An accidental policy offers insurance against partial disablement, loss of limbs, hands and many other parts. But in a rider, many insurance company offers insurance against permanent disablement only and not for partial disablement and loss of body parts.

Also note that, because accidental rider is much less if taken with Term Plan as compared to the personal accidental policy taken stand alone. Under term plan, accidental death benefit could be taken for as little as Rs.1000 for a cover of upto 15 lakhs where as in a stand alone policy the same amount will be available for a premium of around Rs.2000. So it depends.

8. What are the top most things one should check in the policy documents ?

The first thing one should have a look at, is to check what the exclusions in the policy are. This is because, we get information on what is covered but no insurance company will give information on what is not covered and this creates a problem at the time of claims. So to avoid any surprises, one should have a thorough look at exclusions as well.

For example: A new circular was passed by many insurance companies few months ago in which they provided only Rs.20-24 thousand (different companies had different rates) compensation for cataract operation. Earlier there was no limit on it.

So sometimes in list of coverage for health insurance we just read the tabular format given by companies but don’t go inside to see the details and this can land us in soup sometimes. Many insurance companies now provide Maternity benefits but they limit it to coverage of only Rs.20-30 thousand, we just see that maternity benefits are given but sometimes fail to notice how much coverage is given.

Also check if the policy has Loading and Co-pay .

9. If there are no loading charges, can premium still change on renewal?

This is a very big question with very easy answer..If you check the premium structure of any of the mediclaim company, either there premium is increasing every year or they have premium slab for different age groups; something like for age 30-35 premium is 4200 and from age 36-40 its 6700.

So under this second policy, when the policy holder moves from age 35 to 36, his premium suddenly jumps by Rs.2500 and this is not loading.

So yes, premium can/will increase irrespective of loading after certain age.

10. Is it a good idea to split health insurance into 2 policies? Tips?

No logic for doing this except personal preference. If you are taking another mediclaim policy just to increase your cover, why not get your cover amount enhanced in the existing policy/company.

Get another mediclaim policy only if certain other company is offering feature/features which your existing policy does not and you have surplus funds at your end to afford 2 separate mediclaim policies at a time. No other reason to, otherwise.

11 . During the course of my treatment, can I change the hospitals?

Yes it is possible to shift to another hospital for reasons of requirement, of better medical procedure. However, this will be evaluated by the TPA on the merits of the case and as per policy terms and conditions. Note that it would be prudent if you check the network hospital list and go to the best hospital in the beginning itself rather than changing midway.

12. What are the situations under which one may be denied cashless hospitalization?

  1. If there is any doubt in the coverage of treatment of present ailment under the Policy if the information sent to TPA is insufficient to confirm coverage
  2. When the ailment/condition is not being covered under the policy.
  3. If the request for pre-authorization is not received by TPA in time. In such a situation, the Insured can take the treatment, pay for the treatment to the hospital and after discharge, send the claim to TPA for processing.
  4. In case the hospital in not on the panel of the company or the disease/illness is pre-existing and not covered for 4 years.

13. Whom can I approach in case of a conflict with insurance company with regards to my claims?

The Grievance Redressal Cell of the Insurance Regulatory and Development Authority (IRDA) looks into complaints from policyholders. Complaints against Life and Non-life insurers are handled separately. This Cell plays a facilitative role by taking up complaints with the respective insurers.

Policyholders who have complaints against insurers are required to first approach the Grievance/ Customer Complaints Cell of the concerned insurer. If they do not receive a response from insurer(s) within a reasonable period of time or are dissatisfied with the response of the company, they may approach the Grievance Cell of the IRDA.

Private Insurers:
Shri K.Srinivas, Asst. Director,
Insurance Regulatory and Development Authority
Consumer Affairs Department
United India Tower, 9th floor, 3-5-817/818,
Basheerbagh, Hyderabad – 500 029.
E-mail ids: [email protected]

Public Sector Insurers:
Mr.R.Srinivasan, Officer on Special Duty
Insurance Regulatory and Development Authority
Consumer Affairs Department
United India Tower, 9th floor, 3-5-817/818,
Basheerbagh, Hyderabad – 500 029.
E-mail ids: [email protected] . As claims/policy contracts in dispute require adjudication and the IRDA does not carry out any adjudication, insured’s are advised to approach the available quasi-judicial or judicial channels, i.e., the Insurance Ombudsmen, Consumer for or the Civil courts for such complaints.

The list of Insurance Ombudsmen along with their contact details are available on this website under the heading ‘Ombudsmen

Here is the link

If you have a good broker from whom you have purchased the policy, then they will help you in coordinating with health insurance companies.

14. What is the difference between Critical illness insurance and normal health insurance ?

In a critical illness policy you are covered for certain mentioned critical illnesses only. Some of coverage’s are Kidney disease, brain tumor, and major organ transplant and many more depending on the companies.

If you have normal health insurance you will definitely get covered for critical illness but in critical illness you won’t get coverage for normal disease like malaria, typhoid.

For example: If your age is 25 and you buy normal health insurance from any XYZ company and let say its premium is Rs.3000 for cover of 3 lacs but if you buy critical illness policy for 3 lacs the premium would be less because considering your age the changes of you getting a critical illness is lesser than any normal disease.

Similarly for old age person the premium for critical illness insurance will be more than normal health insurance because chances of getting that critical disease are more at older age. One other option would be to avail critical illness rider in term plan itself.

15. What is the benefit of critical illness policy?

So as you grow older it is advisable to have another critical illness policy along with normal health insurance. So those at old age when undergo major operation or transplant, this critical illness policy can be used and for minor disease normal health insurance is used.

benefits of critical illness insurance in India

Image source: Slideshare.net

The reason for this is e.g. if you have normal health insurance of 5 lacs and you undergo tumor surgery with other complications and the expenses are around 4 lacs and after sometime you get hospitalized because of ill-health then you have nothing left in your health insurance.

16. What is Domiciliary Hospitalization?

Domiciliary Hospitalization means medical treatment for a period exceeding three days for such illness/disease/injury which in the normal course would require care and treatment at a Hospital/Nursing Home but actually taken whilst confined at home in India under any of the following circumstances, namely:

i) The condition of the patient is such that he/she cannot be removed to the Hospital/Nursing Home or

ii) The patient cannot be removed to Hospital/Nursing Home for lack of accommodation therein

For smooth claim process, just take care that all your documents are in place and to be on a safer side have a report from your family doctor, stating that this person cannot move to nursing home/hospital due to such and such reasons.

It just provides the proof and makes the process simpler. Note that every company does not offer this facility, you should check your policy document.

17. Some important exclusion under health insurance policy.

1 Pre-existing diseases i.e. Any condition, ailment or injury or related condition(s) for which insured person had signs or symptoms and/or was diagnosed and/or received medical advice/treatment within 48 months prior to his/her health policy with the company.

Pre-existing diseases will be covered after a maximum of four years since the inception of the policy

2. Any disease contracted during the first 30 days of inception of policy except in case of injury arising out of accident

3. Certain diseases such as cataract, piles, hernia, and sinusitis etc. are excluded for specified periods if contracted or manifested during the currency of the policy.

4. Injury or Diseases directly or indirectly attributable to War, Invasion, Act of Foreign Enemy, War like operations.

5. Cosmetic, aesthetic treatment unless arising out of accident.

6. Cost of spectacles, contact lenses and hearing aids

7. Dental treatment or surgery of any kind unless requiring hospitalization

8. Charges incurred at Hospital or Nursing Home primarily for diagnostic, x-ray or laboratory examinations, without any treatment.

9. Naturopathy or other forms of local medication

10. Pregnancy & childbirth related diseases

11. Intentional self-injury / injury under influence of alcohol, drugs

12. Diseases such as HIV or AIDS

13. Expenses on vitamins and tonics unless forming part of treatment for disease or injury as certified by the attending physician.

14. Convalescence, general debility, run-down condition or test cure, congenital external diseases or defects or anomalies, sterility, venereal disease.