What to buy and when
The strategy. An IHP should form the base of your health insurance portfolio. Alternatively, if you have a family, you could go for a FF to form the base cover. To add a second layer of protection, you could go for a CIP. For most, this will be adequate.
If you have a special condition, such as cancer or diabetes, add the third layer of a special cover, such as a cancer plan or diabetes cover. Do not mix up your life and health policies. The needs are different and cannot be compromised. If, by linking the two, you are doing so, we suggest that you keep them separate.
The timing. Buy a cover as early on in life as possible and definitely before you turn 45. If you procrastinate, diseases could surface and get excluded from your cover under the 'pre-existing disease' clause.
Of course, lately there have been products where pre-existing diseases are being covered, but that is subject to specific conditions. As you are likely to make no or few claims in earlier stages of life, you can get the benefit of no-claims bonus for every claim-free year. Do not rest assured in the fact that your employer covers your medical expenses. What if you fall ill between jobs? And buying a health cover without exclusions after you retire at, say, 60, will be much tougher.
The maximum renewal age. One of the most important things that one needs to look at the time of buying a health plan is the maximum age up to which the the insurer would allow renewals. The higher this is, the better, since your medical expenses are likely to increase with age. Changing insurer at a higher age has a high probability of being looked at as a fresh policy with no prior coverage.
Common oversights - Maybe because the maximum number of claims are made on health policies, possibly apart from motor insurance, the number of rejections, rendering a policy worthless, arising here is also quite large. Many of these arise because of the policyholder's lapses.
Things such as missing documents or late renewals can lead to rejection and, consequently, substantial medical debt. Here are the common oversights to avoid.
Pre-existing diseases. This is a common problem area since there was no standard definition of pre-existing illness earlier. In June 2008, the General Insurance Council said "the benefits (of health insurance) would not be available for any condition, ailment or injury or related condition for which the insured had signs or symptoms, and/or was diagnosed and/or received medical advice/treatment, prior to inception of the first policy, until 48 consecutive months of coverage have elapsed, after the date of inception of the first policy.
Four years is the maximum period prescribed by the Insurance Regulatory and Development Authority, but companies may offer products that could have a shorter waiting period under the 'pre-existing' clause.
When buying a policy, you should know:
From when claims on which pre-existing diseases will be allowed. The waiting period is not the same for all of them;
That the definition excludes all diseases arising out of earlier complications, such as obesity and hypertension;
That the period of four years does not include the track record from another insurer;
That the buyer should disclose the known pre-existing diseases at the time of application.
Claim problems. An insurance company cannot pay a claim unless it is in line with the agreed terms and conditions. If you provide incorrect information at the time of applying, your claims could be rejected.
To prevent that:
Keep the company informed. Limited information including illness and policy number is sufficient.
Give the correct papers when making a claim in a proper file. Keep in order the following:
(i) covering letter, original claim form and copy of the policy,
(ii) note from the concerned doctor describing the illness and the recommended treatment,
(iii) original prescriptions from the doctor for medical tests (investigation) and medicines and original medical test (investigation) reports,
(iv) sheet listing down bills and the amounts,
(v) doctor's and medical test bills,
(vi) hospital or nursing home bills,
(vii) medicine bills,
(viii) hospital bills, and
(ix) Original discharge card.
Get an acknowledgement of receipt of the claim before submitting the file and retain a photocopy of the complete set of documents submitted to the insurance company.
Keep the number of the third-party administrator and your insurer ready if you have a cashless policy. Try to inform them around 48 hours before the admission in general and 24 hours if it is an emergency.
Spell the name correctly. The patient's and his or her doctor's name should be spelled correctly, wherever required.
So you must:
Ø Be careful in deciding the sum insured you need;
Ø Be aware of the sub-limits under the policy for specified illnesses or expense heads, the waiting period, permanent exclusions, and so on.
Ø Coverage. A family floater can be bought by an individual, who becomes the proposer, along with spouse, dependent children up to 25 years, or unmarried, divorced or widowed daughter, and dependent parents. Even parents-in-law can be covered.
Similar to IHPs, a discount of 10 per cent is allowed on renewal premium by most insurers if there is no claim in the year immediately preceding the year of policy renewal. Similarly, in group health plans of your employers, you should know who are the ones it covers and the limit to which they are covered.
So you need to be aware of:
Ø Who are included in a family floater health policy and till what age;
Ø What the inclusions and exclusions are (and for how long) for each of the insured as enumerated in the 'inclusions' section of the policy document; and
Ø The age till which the policy can be renewed.
Ø Gap in renewals. Renewal of the policy on time is very important for health covers. Apart from no-claim bonus, after a certain period it could start covering your pre-existing ailments. For every no-claim year, most plans add up to 5 per cent of the sum insured as cumulative bonus. So you need to:
Ø Renew your policy a month before the due date to to prevent a lapse so that waiting periods do not start afresh; and
Ø Read policy wordings every time it is renewed so that you do not miss out on new inclusions or exclusions.
