Health Insurance - Things You should Know

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When taking health insurance, what we have noticed is that most people don't actually do any sort of structured research. Luckily, that's what we're here for. This article will go into the salient features of a mediclaim policy that you need to know, address types of mediclaim policies (individual and floater), and also run a brief comparison between mediclaim policies from some popular insurers - all in easy-to-read FAQ format.

Let's get started.

1. What is a Mediclaim policy?

A Mediclaim policy is a health insurance policy which covers all medical treatment expenses up to the sum assured in case you are hospitalized due to an illness / accident.

Mediclaim policies are issued for a period of one year and are renewed annually.

2. What are Pre - Hospitalization Expenses?

These are expenses you incur before you are hospitalized. They can include doctor's consultation fees, medical tests, medication, and related expenditures. Mediclaim policies generally cover 30 days expenses immediately before you have to be hospitalized.

3. What are Post - Hospitalization Expenses?

These are expenses you incur once you are discharged from hospital. They can include things such as doctor's consultation fees, medication, further tests (checkups), and even physiotherapy. The medical expenses you incur in the 60 days immediately after you are discharged from the hospital are usually covered by your mediclaim.

4. What is the Tax Benefit of taking mediclaim?

While this is not a reason for taking mediclaim, it does help that you also get a tax benefit on your health insurance. The premium paid for these policies are deductible under section 80 D of Income Tax Act up to a maximum limit of Rs. 15,000 and Rs. 20,000 in case the person insured is a senior citizen. In case an individual pays health insurance premium for his or her dependent parents then an additional deduction up to a maximum limit of Rs.15,000 is allowed and in case parents are senior citizen then Rs. 20,000 is allowed. To know more about various tax deductions you can avail

So if you are paying for yourself and your senior citizen parents, you can claim a maximum of Rs. 35,000 p.a. under Section 80D.

5. What is Cumulative Bonus / No Claim Bonus?

In short, it is the insurer's way of rewarding you for paying a premium and not making any claim. Generally Mediclaim policies provide an additional cover of 5% of Sum Assured in the subsequent renewal of the policy in case there is no claim in the current policy year. This increase in sum assured of 5% every year is restricted to a maximum of 50% of the initial Sum Assured for most policies. If there is a claim in the policy then this additional cover is decreased by 10% on the next renewal. These percentages can vary depending on the insurer and the policy you choose.

6. What are the types of mediclaim policies available?

Mediclaim policies are of two types:

a. Individual Mediclaim Policy

Individual policy covers only one single person under one policy. The premium in this type of policy is calculated according to the age of the person to be covered under the policy. Under this policy, if the sum assured is Rs. 5 Lakhs then the person insured can claim up to the maximum limit of Rs. 5 Lakhs.

b. Family Floater Mediclaim Policy

Family floater policy covers the entire family i.e. self, spouse and the dependent children under one single policy. The premium under this type of policy is calculated according to the member with the highest age in the family. Under this policy, if the sum assured is Rs. 5 Lakhs then any one person individually or the entire family jointly can claim up to the maximum limit of Rs. 5 Lakhs.

7. Can you briefly compare some key insurer's mediclaim policies?

Definitely. Below is the comparison between features of Mediclaim policies provided by different insurance companies:

COMPANY	ENTRY AGE	RENEWAL UP TO AGE	PRE-EXISTING DISEASES COVERED FROM	NO CLAIM BONUS	CASHLESS FACILITY AVAILABLE	FAMILY DISCOUNT
NEW INDIA	18 - 60	Lifetime	5^th year	5% of SA	Yes	10%
UNITED	1 - 60	Lifetime	5^th year	5% Discount every year (max 25%)	Yes	5%
ORIENTAL	18 - 45	Lifetime	5^th year	-	Yes	-
BAJAJ	1 - 65	80	5^th year	-	Yes	10%
NATIONAL	18 - 59	80	5^th year	5% of SA every year (max 50%)	Yes	-

The policy you choose will depend on the cover you require, the features you feel will be most beneficial to you, and of course

8. What is a Top Up plan?

Earlier, most insurance companies limited their mediclaim to Rs. 5 lakhs. This is no longer the case, there are many insurance companies which allow even more than Rs. 10 lakhs of health insurance cover. However, this was not always the case. And also, some of the companies that allow higher cover might not be your first choice of insurer. So earlier, if you wanted more than Rs. 5 lakhs cover, your best option was to go for a Top Up Plan.

Top Ups provide you additional coverage at a low cost. Top up plan covers medical treatment cost over and above the actual Mediclaim policy and thus increase the total sum assured. Top up plan can be taken for an individual as well as for the entire family. However top up plans are available only if the sum assured taken in the Mediclaim policy is between Rs. 3 to Rs. 5 Lakhs.

For example:

Our favourite fictional character, Mr. Shah has taken a Mediclaim policy for a sum assured of Rs. 3 Lakhs and a top up plan for Rs. 7 Lakhs, so his total sum assured is Rs. 10 Lakhs. If a claim arises for a sum of Rs. 8 Lakhs then the first 3 Lakhs has to be borne by the Mediclaim insurance company and next Rs. 5 Lakhs is to be paid by the company from which top up plan has been taken.

Remember that the Insurance Company from which the top up plan has been taken will not be responsible for claims arising up to the sum of Rs. 3 Lakhs.

Top up insurance plans are targeted by insurance companies to those customers who already have Mediclaim insurance policies but find their cover to be low and hence these customers want to add additional cover. Now, if you are also thinking that your Mediclaim policy is not sufficient to cover your expenses in case of hospitalization and the present insurer is not ready to increase the cover, then a top up policy from another insurer is the solution for you.

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