There are more restrictions on policies from life insurers as compared to a mediclaim
NEED to visit a hospital for a minor surgery? Given the rising healthcare costs, it could set you back by at least 20,000. For anything serious, be ready to pay in lakhs.
Though most of us agree that a health policy is a necessity, picking the right one remains tricky. Especially with life insurers offering medical policies like traditional mediclaim policies of general insurers.
The sales pitch: Traditional mediclaims, being indemnity plans, cover hospitalisation-related expenses for an ailment. Health polices from life insurers pay the entire sum assured as soon as an illness is diagnosed. That would mean the latter is better. But here's some fine print.
Limited coverage: A mediclaim policy is an indemnity-based plan that settles claims, either on a cashless basis or by reimbursing bills. Life insurers have similar plans where hospital cash benefit (HCBs) is offered. Additionally, some companies also offer surgery benefits. But the benefits are defined and fixed components come into play.
There are more limits -- on both per day amount and the number of days one can avail that amount. Depending on the insurer, the amount could be between `1,000 and 5,000 per day.
Such restrictions may not always work in favour of the customer. If you were to get paid `25,000 for a surgery, you will get it. If the actual expenses were `40,000, then the extra `15,000 will have to be borne by you.
If one were to only opt for hospital cash policies, not getting covered for the entire amount is the risk taken.
Exclusions: HCBs permanently exclude pre-existing ailments. But a general insurer will cover pre-existing diseases after four years of continuous cover.
Life insurance policies usually have a longer cooling period of 90 days from the effective date of the policy. So, even those ailments mentioned in their policy documents, will not be covered if diagnosed within this period.
However, both mediclaim and HCBs cover hospitalisation due to accidents within the first 30 days of buying the policy.
Premiums: Typically, premiums are marginally cheaper than a mediclaim. But if one opts for a surgery benefit product, the premium rates rise substantially. For instance, if a person aged 32 buys New India Assurances family floater policy for a sum insured of `2 lakh, he pays `5,725. He would be paying `5,365 for Tata AIGs Wellsurance family-classic, a standard HCB. His premium would rise to `13,794 for an additional surgery benefit of `50,000 from Aegon Health Insurance.
If the same person underwent an angioplasty and hospitalisation that costs `1.75 lakh, his standard HCB would pay him the least. With a fixed payout of `2,000 per day, he would get only `6,000. Had he opted for the surgery benefit, too, he would get `6,000, plus the `50,000 for surgery benefit.
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1) DSP BlackRock Mutual Funds:
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5) Birla Sunlife Mutual Funds:
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6) UTI Mutual Funds:
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