Skip to main content

What to look for before you buy a health cover policy?

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

 

PLANNING to buy a health insurance policy? Well, all health insurance products have gone for a makeover from this month in line with the new regulations introduced by the insurance regulator in February. Health insurance products are now offering lifelong coverage, allowing entry up to 65 years, offering a free look period of 15 days, grace period of 30 days and paying 50 per cent of the pre-insurance medical check-up if your proposal has been accepted.

So while many product features that were earlier used to differentiate between products have now become mandatory, customers can look at some other factors to choose the right policy.

Room rent cap:

 In case you stay in an urban city or semiurban place, consider a policy that does not cap the room rent cost. But in case you stay in a small town, a product with a room rent cap can be considered as such policies come with lower premiums. Several charges such as the surgeon's fee, anaesthetist fee, consultant's fee, operation theatre charges are linked to the cap on the room rent. While many health insurance products cap the room rent at one per cent of the sum insured per day, a few policies pay a room rent that is two per cent of the sum insured per day. Assuming you have chosen a sum insured of Rs 3 lakh, your insurer will pay you not more than Rs 3,000 as room rent per day.

Top hospitals in Mumbai and Delhi charge between Rs 8,000 and Rs15,000 for a single room. If you have a Rs 5 lakh policy, you will get only Rs 5,000 from your insurer and will have to shell out the remaining cost from your pocket. However those staying in tier 4, 5 and 6 towns will not be affected with a product that caps room rent, as the cost of healthcare is less in such places.

Go for plans that don't have a co-payment:

With rising losses in health insurance, several non-life insurance companies have introduced co-payment which means that the policyholder has to pay a portion of the claim amount. Avoid a policy that has co-payment.

Some products have co-payment of 10-20 per cent if the treatment is taken in a nonnetwork hospital. While a few others have a co-payment after the policyholder turns 65 years. Policies that have a co-payment element should be avoided." Benefits being offered: Look at the benefits that the policy offers such as hospital cash on contracting a critical illness or in case of an accident, cash for the attendant, ambulance charges and noclaim bonus. Though many insurers offer 5 per cent of your sum insured as noclaim bonus, there are others who offer 10 per cent or more. Also, check the number of daycare procedures and critical illnesses that will be covered in the policy.


Premium rate:

 

Most prospective health insurance buyers compare products based on the premium rates and opt for the cheapest policy. However, since insurance companies revise the premium rates based on their loss ratios, this factor should not be the only factor for deciding your health cover. Now with the new reg ulations, insurers will not be allowed to change the health insurance premium rates every year, nor will they be allowed to load your premium while renewing your contract in case you have claimed during the year. See if the premium commensurate the benefits.

 

According to industry officials, most non-life insurers have revised the features of their existing products in line with the regulations without changing the premium rates, but they agree that raising the premium rates is inevitable. Public sector insurers such as New India Assurance and National Insurance have already launched products with higher premium rates a few months ago.

Since my claim ratio is comfortable, we have not revised the premium rates as of now. We will be watching the impact of the regulations on our loss ratios for the next three to six months and then decide on increasing premium rates. However, I feel that health insurance penetration will increase due to the new norms. Higher volumes will help us break even in this business.


Consider past claim settlement record of the insurer:

Look at past track record of the insurer in settling claims. What were the number of claims outstanding at the end of the year, number of claims repudiated and the number of claims settled?


There are a few insurers which have priced their products low, but have a track record of repudiating higher number of claims compared with their peers.
Such insurers are risky and should be avoided.


Network hospitals:

You should also check if the hospitals close to your residence are there on the insurance company's list for providing cashless hospitalisation.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

All about "Derivatives"

What are derivatives? Derivatives are financial instruments, which as the name suggests, derive their value from another asset — called the underlying. What are the typical underlying assets? Any asset, whose price is dynamic, probably has a derivative contract today. The most popular ones being stocks, indices, precious metals, commodities, agro products, currencies, etc. Why were they invented? In an increasingly dynamic world, prices of virtually all assets keep changing, thereby exposing participants to price risks. Hence, derivatives were invented to negate these price fluctuations. For example, a wheat farmer expects to sell his crop at the current price of Rs 10/kg and make profits of Rs 2/kg. But, by the time his crop is ready, the price of wheat may have gone down to Rs 5/kg, making him sell his crop at a loss of Rs 3/kg. In order to avoid this, he may enter into a forward contract, agreeing to sell wheat at Rs 10/ kg, right at the outset. So, even if the price of wheat falls ...
Read more

Zero Coupon Bonds or discount bond or deep discount bond

A ZERO-COUPON bond (also called a discount bond or deep discount bond ) is a bond bought at a price lower than its face value with the face value repaid at the time of maturity.   There is no coupon or interim payments, hence the term zero-coupon bond. Investors earn return from the compounded interest all paid at maturity plus the difference between the discounted price of the bond and its par (or redemption) value. In contrast, an investor who has a regular bond receives income from coupon payments, which are usually made semi-annually. The investor also receives the principal or face value of the investment when the bond matures. Zero-coupon bonds may be long or short-term investments.   Long term zero coupon maturity dates typically start at 10 years. The bonds can be held until maturity or sold on secondary bond markets.
Read more

Mutual Fund MIPs can give better returns than Post Office MIS

Post Office MIS vs  Mutual Fund MIPs   Post office Monthly Income Scheme has for long been a favourite with investors who want regular monthly income from their investments. They offer risk free 8.5% returns and are especially preferred by conservative investors, like retirees who need regular monthly income from their investments. However, top performing mutual fund monthly income plans (MIPs) have beaten Post Office Monthly Income Scheme (MIS), in terms of annualized returns over the last 5 years, by investing a small part of the corpus in equities which can give higher returns than fixed income investments. The value proposition of the mutual fund aggressive MIPs is that, the interest from debt investment is supplemented by an additional boost to equity returns. Please see the chart below for five year annualized returns from Post office MIS and top performing mutual fund MIPs, monthly d...
Read more

Benefits Of Repo Rate & CRR Rate Cut On Consumers

  How Reduction In Repo Rate & CRR Affects Customers Finally  RBI announced slashing of repo rate by 25 basis points (bps ) and cash reserve ratio (CRR) by 25 bps which industry experts believe will fuel the economic growth to some extent. Although experts were expecting higher rate cut this year. This lowering of the rate cuts has taken place for the first time in nine months. Now let's see how reducing the repo rate (defined in economic term as the rate at which RBI lends money to the banks) relates to the following individuals and sectors: Banking:   Lowering of repo rate directly reduces borrowing costs of a bank. Banks in turn reduces interest rates on different types of loans such as home, auto, business etc. Similarly trimming down of CRR allows banks to unlock money for lending to the customers i.e. with 0.25 rate cut banks are estimated to lend more than INR. 17 Crores. Consumers:   Lower repo rate does not necessarily benefit existing loan borrowers but new loan se...
Read more

NRI Corner: The process of remittances abroad

The process of remittances abroad, and back, is cumbersome. Here’s how you can wade through without hassles Approach The Right Place Outward remittances or the process of sending money abroad is governed by many regulations. In India, outward remittances are made mainly through banks. At the outset, you need to remember that you just cannot trust any individual or a financial firm with the responsibility of sending your money. Experts recommend that you should always try to choose a bank with an international footprint, which will make your job easier. Choose Mode Of Transfer The next step is to choose the mode of transfer. One option is to get a Foreign Currency Demand Draft ( FCDD ). This draft will be denominated in foreign currency and should be drawn in favour of the recipient/ beneficiary. The beneficiary does not necessarily need to have an account with the same bank. The other option is to send money via wire transfer. Do not be puzzled if the bank official uses the word SWIFT ...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now