It is necessary to be aware of all terms and conditions while going in for a health insurance policy
It's not just life insurance that has increased in mindshare (in turn wallet share) for individuals but health insurance is increasingly becoming a priority. Blame it on the rising health costs, improved life expectancy or the uncertainty attached to career life, but many are focusing on health insurance. The result is that besides general insurance companies, even life insurance companies are providing health cover.
There is a significant difference between the products offered by both players. To start with, the health cover provided by a life insurance cover is substantially higher than general insurance company. For instance, some of the products available in the market offer a life time life insurance cover of as much as Rs 60-80 lakhs. The caveat here is that even the premium collected too is higher. Hence, before zeroing on a health policy, you need to keep in mind a number of factors.
If your employer provides the life insurance for the entire family, then go for a superior product offered by a life insurance company. Since these companies don't insist on original bills for claims, any shortfall in the reimbursement of medical expenditure can be made good by these policies. More importantly, they offer the feature of reimbursement of expenses on diagnosis which can come in handy. The biggest advantages, of course, are the features of higher daily hospital allowance and recuperation allowance that can take care of cash needs even after the patient's discharge from the hospital.
The biggest dilemma for many families is whether they should go for floater option or individual policies. If an individual has a family which includes senior citizens, opting for a combination of floater and individual is a better option. Since premium slab is based on the senior most member of the family, a floater policy may not be beneficial if the age gap between different members is large. In such instances, parents can be covered under a separate policy as tax benefit is provided for the health insurance incurred on behalf of senior citizens. In the case of working couples, separate health policies have their advantages.
For instance, if a husband and wife are employed, opting for separate polices is a better option simply because tax benefit can be claimed by both. The tax efficiency comes down if an individual pays a premium of Rs 30,000 for the entire family as tax benefit is extended only for half the amount.
While insurance in itself is a product which requires thorough knowledge, it is an even greater necessity when it comes to health policies. You need to have a good understanding of the implications of various policies. For instance, check out the sub-limits for each surgery in the policy as it can be crucial information at the time of claims. Even if a policy has substantially higher cover, it does not mean that the entire cover is provided by the company for any ailment. A lack of understanding of these features can be troublesome at a later stage.
And more importantly, you need to be disciplined with a health policy commitment. Unlike unit-linked plans of life insurance, nonpayment of premium will end up in cancellation of policies. Their due dates should be sacrosanct. In fact, those who can't keep track of their premium dates can opt for auto debit facilities as they ensure regular payments.
In a nutshell, health insurance while is a necessity product in a portfolio needs to be chosen with care as it is one of the long-term commitments for an individual. Not only should you focus on the credentials of the issuer but also the fine print of the policy. Just remember that a company cannot go back on what is already stated in the policy document.
