8 things you must know regarding health insurance policy

1. Exclusions:

Almost all health care policies come with exclusion i.e. no cover for treatment for a specific period or a specific time frame or a combination of both
• All treatments within the first 30 days of cover except any accidental injury are excluded
• Preexisting disease by definition are those disease which are in existence prior to opting for a health care policy and have to be mentioned in the proposal form for the policy to be valid. Treatment for preexisting disease is not covered generally for a period of 36 to 48 month from the time of taking the policy. The waiting period differs from policy to policy
• 2 years waiting period for specific diseases like cataract, hernia, joint replacement surgeries, surgery of hydrocele etc.
This list is indicative and not exhaustive, westrongly recommend you go through the exclusions in detail before opting for the policy

2. Cashless

Insurers or the third party administrators who facilitate insurers have to tie up with hospitals for cashless hospitalization, the list of hospitals where the insurance company have tie up is available easily and it is important to check the list to ascertain if there are adequate number of hospitals in the list and to find out if the hospital you are most likely to go it in case of a planned procedure is part of the list. While a hospital could be covered for cashless hospitalization at the time of taking the policy it is not necessary that this arrangement continues. It is quite possible that cashless facility with a particular hospital is discontinued at a later stage, therefore it is essential to check the list of hospitals for cashless facility on a periodic basis. While treatment is possible in hospital where the tie up does not exist, it comes with separate terms and conditions. The bill needs to be paid first and claimed later

3. Sub limits

Some policies have sub limits i.e there are predetermined maximum caps for certain procedures, room rent etc. This essentially means no matter what the cost of the procedure or room rent is, the policy will reimburse upto a predecided maximum cap. Example if you pay Rs. 5,000 per day for room charges and your policy has a sublimit of 2,000 per day for room charges you will only be reimbursed Rs. 2000 and the remaining Rs 3000 will have to be borne by you. It is desirable to have a policy which does not impose such limits. In case you have an existing policy this would be good time to understand the limits considering you are not in the midst of an emergency.

4. Renewability

Some policies have maximum coverage age beyond which they do not renew insurance. Since medical insurance is a yearly contract it is imperative to check this aspect. It has greater relevance given the fact that companies shy away from insuring an older person with preexisting diseases.

5. Adverse Loading

When there are claims against your policy some companies increase premium to compensate them for increased claims. Which means you may end up paying higher than normal premium charges for your age if you have claimed the previous year. Some do not indulge in such practices. Once your policy is accepted without any special conditions or additional loading, premiums are purely based on age.

6. No Claim Bonus

The reverse of the above is also true and all companies incentivize you for a claim free year, majority of them offer no claim bonus which is an increase in the sum assured this can range anywhere between 5% and 50% per year. Example Suppose X has a policy for 3 lakhs and does not have any claim in a particular year , in case of 5% NCB the sum insured will be 3,15,000 for the next year in case of 50% NCB the sum insured become 4.5 lakhs for the next year. The amount of no claim bonus depends on the policy opted for.

7. Co payments

Policies sometimes have Co -payment conditions. That is a certain percentage of the expenses incurred will have to be borne the insured. Example a 10000 policy with 20% co-payment rule requires that incase of claim of Rs.10000 you bear cost of Rs.20000 while the insurance company bears Rs.80,000 While some policies make this optional and give discounts in premium for opting for such a facility others have a mandatory rule.

8. Add on policies

As per many newspaper report medical costs are increasing at an alarming rate every year. If you have a basic insurance and now feel you are not adequately insured you can go in for an add-on policy which covers with a deductible. The premiums by virtue of design of these products are very low and affordable. It may be economical to opt for two polices one for basic and one with deductible to keep your premium at acceptable levels.
Deductible are amount beyond which the insurance company will entertain claims. Example if your policy is for 10 lakhs with a deductible of 3 lakhs it would mean that the company will entertain claims beyond 3 lakhs upto 13 lakhs. These policies also have terms and conditions and it is absolutely essential to understand them before you choose to go for it.
Should you have any further queries on the same feel free to drop in an email to prathiba.girish@finwise.in will be glad to be of assistance to you

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