Term Insurance and Health Insurance
Medical inflation is at a whopping 14%, escalating healthcare costs, and unforeseen medical emergencies. Have you ever wondered how to choose health insurance? if your current health insurance policy be enough in case there is a medical emergency? Would the coverage you opted for last year be sufficient this year as well? If these questions have been hovering over you, then it is time for you to consider consumable coverage in health insurance. When you choose health insurance covering consumables, you can ensure that you have adequate coverage, which provides financial security and ensures access to quality healthcare.
Term Insurance:
In case of an Accident or Natural death of the Insured, the money will be given to the nominee.
Health Insurance:
In case of occurrence of a Medical Expenditure, the amount will be treated with Cashless or by Reimbursement from the insurance policy. The Cost of Medical treatment will not eat away saving case Health Insurance
Room rent limit:
This is the biggest amount in the bill. Room Rent will generally be 1% of the Insured Amount. If the insured amount is 5L, then 1% of 5L is Rs 5000. In case you select the room rent as 5500, then the other charges like a doctor visit, nursing, and other diagnostic charges will be charged based on the room rent.
The 500/5000 is 10%. If your Entire Bill amount is say 1L rupees, then only 90% of your bill amount will be considered for the Claim. No Limit for Room rent is preparable
Mid-year member addition:
If you have missed adding a member, the insurance company generally rejects the application. Let’s say you are newly married or have a newborn baby in the family after 90 days. The inclusion of a born baby is allowed after some duration(say 91 days), the addition of a new wife will not covered.
Restoration of cover:
When the claim limit is exhausted for a particular year, the insured restores the insurance to its maximum. The restored amount cannot be carried forward to next year even if the amount is not utilized. In the case of a Family Health Plan, the restoration benefit applies to only one person
No Claim bonus:
During the renewal process, in the past year if we did not make a claim, and as a result, there will be a discount for the next premium. (Say 10% discount on Premium).
Cashless hospitals:
Cashless treatment is provided for the list of hospitals available. There shall be options for reimbursement also.
Co-pay:
The insurer shall pay a certain percentage or fixed amount of the bill. This shall reduce the premium for the insurer. This is one method for the insurance companies to cheat the insurer by trapping him to pay him lower insurance. When a claim is made at the end of the day, the insurer does not pay the entire amount.
Pre-hospitalization coverage
Pre-hospitalization includes tests such as X-rays, and diagnostic tests for diagnosing an existing disease condition. Generally, pre-hospitalization expenses of up to 30 days are allowed
Post-hospitalization coverage
The medicines or consultancy after the discharge from the hospital can be claimed as post -hospitalization. Generally, pre-hospitalization expenses up to 90 days are allowed.
Day care treatment
Day-care treatment refers to medical procedures that require hospitalization of less than 24 hours. Such daycare treatments include dialysis, chemotherapy, cataracts, radiation, tonsillectomy, etc.
OPD Treatment
OPD means an outpatient department, where patients come to the hospital to consult their health issues with the doctor to start the treatment. Patients do not necessarily need to be hospitalized but can visit any medical facility, such as a diagnostic center, consultation room, pharmacy, etc. in the hospital.
Hospitalization at home
Treatment at home (nursery care at home) is considered Hospitalization at home. In most cases, this is not covered under the health insurance
Ambulance charges
For example, you have a health insurance plan for a sum insured of INR 3 lakh, and your insurance provider offers road ambulance cover for 1% of the sum insured (i.e., INR 3000). You had to spend INR 5000 for an ambulance during a medical emergency. In this case, the insurance company will cover INR 3000 as ambulance costs, while you must pay the remaining INR 2000 from your pocket. Health Insurance will not cover the ambulance ride bringing the patient back home from the hospital.
Waiting periods
A waiting period is the amount of time an insured must wait before some or all of their coverage comes into effect. The insured may not receive benefits for claims filed during the waiting period. Waiting periods may also be known as elimination periods and qualifying periods. Cancer and cardiovascular care may have wait periods of up to two years. Maternity care waits may be as long as 10 to 12 months but commonly are 30 to 90 days.
Existing Illness cover(Pre-Existing Diseases)
A waiting period for Pre-Existing disease can be up to 3 years. It is better to take Health Insurance when there is no disease and the waiting period will be easily completed.
Maternity cover
The waiting period for maternity can be up to 4 or 6 years. Insurance can restrict the number of deliveries.(say 2)
Initial Waiting Period
After you take out a Health insurance policy, there is an initial waiting period of 30 -90 days before it becomes active.
Specific Illness cover
Waiting period for critical or certain diseases.
Exclusions
Treatments related to plastic surgery, Sex change treatment, infertility treatment(including IVF), and similar will not covered under Health Insurance. Health insurance will not cover illegal or adventurous activities. For Health coverage, a disease requiring medication to cure is necessary.
Alternate medicine (AYUSH)
AYUSH is an acronym for Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy. In most cases, Insurance will not cover the cases.
Worldwide coverage
Health insurance is within India or outside India also
Domestic evacuation
If you became very ill or were injured when overseas, you might need to be taken care of by your family members. The cost incurred for transporting to the home country is covered under this insurance
Consumables Coverage
The disposable items like bandages, syringes, and dressings during hospitalization are not covered under his health plan and are categorized as consumables. This Expense is to be paid out of our pocket
Cover for organ donor
In the most critical of medical cases, there arises a need to remove a damaged or malfunctioning organ from the body, which could otherwise be fatal. Your health insurance policy will definitely cover such a medical procedure
List of Consumable Items
In 2016, the IRDAI, Insurance Regulatory and Development Authority of India, released a list of 199 items that are not payable by the insurance company. These can be classified into 4 main categories: 1. Surgical items might be covered in the insurance. The Remaining categories Housekeeping items, Administrative Charges, and Animal bite will not be covered
1. Surgical Items
This category of consumables includes cotton, gloves, syringes, surgical tape, slings, braces, masks, etc.
2. Housekeeping Items
Items such as toothbrushes, toothpaste, caps, belts, baby food, diapers, bags, slippers, tissue papers, combs, wet wipes, etc., come under housekeeping.
3. Administrative Charges
Documentation is an important part of hospitalization. The certificates/ paperwork include daily health charts, prescriptions, death/ birth certificates, medical records, visitors’ passes, etc.
4. Animal bite vaccination
Will not be covered under Health insurance
Free health checkup
Health checkups up to 2000 for men and Health checkups up to 5000 for women. Some insurance does not cover health checkups. Here are a number of tests that you can take up and the list is generally mentioned in the policy wordings. Some of the best health insurance plans will usually compensate for the expenses incurred on routine tests like Fasting blood sugar, Lipid profile, Chest X-ray, Complete blood count (CBC), and Urine Routine, among others. However, the tests that are covered would vary from one health insurance Company to another.
Another important point to consider is that the coverage limit for free medical check-ups would depend on the policy sum insured. For instance, a free medical check-up limit for a sum insured of Rs. 20 lakhs will be higher in comparison to a health plan with a sum insured of Rs. 5 lakhs.
Daily cash allowance
Daily cash health insurance can be a huge help if the insured has to get admitted at a far-off place. Getting treatment in another city or at a far distance from home requires additional expenses, especially for stay, travel, and food. These expenses can easily exceed hospitalization bills at times. Hence, for such times, a daily cash allowance can act as a great backup. You get the lump-sum amount on a daily basis to meet these expenses.
OPD covered in health insurance
Health insurance policies are primarily bought to cover hospitalization expenses. However, you may be visiting the hospital or clinic for regular consultations or minor illnesses. For example, doctor consultations, performing tests for diagnosis, or buying medicines for treatment. These treatments are taken in the outpatient department. Medical insurance with OPD coverage offers coverage against the medical expenses for doctor’s consultations, diagnostic tests, and treatments needed as an outpatient. This saves you from spending out of your pocket for such expenses.
Address of Insurer
In case you are residing in a small town and registering the Insurance, then the premium might be higher while registering in the cities, since the cost of medication is costlier than in small towns. Incase you have registered in a small town and travel to the city to take up some operation or treatment, reimbursement will not be fully covered due to location. You need to check if the insurance covers the local or PAN India.
Family Floater Insurance
The members of the family will share the Insurance provision the total claim does not exceed a certain amount.
Health Insurance for parents and Senior Citizens
The Insurance for Senior citizens will be higher because they might have pre-existing diseases and the probability of getting treatment is high. Hence the premium for senior citizens will be higher. If you combine the floater Insurance plan for yourself and senior persons, each individual will be charged a higher rate, resulting in a higher insurance cost per person for all members.it is economical to take separate Insurance for Senior Citizens.
Sub-limit on Specific Treatments
Under the specific treatment sub-limits, the insurance company places a coverage limit on the total treatment cost of specific diseases. Sub-limit clauses on specific medical procedures may prevent you from claiming your entire hospitalization expenses, despite having a high sum insured.
For instance, suppose your health policy comes with a sub-limit of 50% of the sum insured for cancer treatment. In this case, the insurance company will only pay a maximum of Rs 5 lakh for cancer treatment, even if your total sum insured is Rs 10 lakh, due to the sub-limit clause.
Before you decide to buy a health policy with a sub-limit on the specific treatment, you must check the list of diseases/ailments that come under the sub-limits clause and the coverage limit specified against each of them. It will help you to be aware of the sub-limits under a health plan and make an informed decision about buying it.
What Experts say for How much to insure
“For individuals aged 18-30, a basic plan covering emergencies and essential medical expenses may suffice. As one transition into the 31-50 years age bracket, opting for a more comprehensive plan that includes maternity coverage becomes advisable. In the senior years (51 and above), it is wise to choose extensive coverage, encompassing chronic conditions, prescription medications, and potential long-term care needs,”
“A prudent guideline is to target health coverage equivalent to approximately 35% to 50% of one’s annual income with minimum coverage of ₹5 lakh to 10 lakh.”
Which Insurance companies need to buy from
After considering 29 Insurance companies, we have shortlisted the companies based on the following
| Incurred Claim Ratio(shall be greater than 75% and less than 100%) | if the is greater than 100% then the company is paying more money than it is collecting, and one day it might go bankrupt. If it is less than 75%, then the company is either overcharging a premium or it is intentionally paying a partial amount for the claims |
| Solvency Ratio(greater than 1.5 times) | How many times the company its debts in case of solvency |
| Claim Settlement Ratio(greater than 95%) | How much percentage of money is paid for the claims submitted |
The above filter was used to short-list the following companies
- Go Digit General Insurance Ltd.
- HDFC ERGO General Insurance Co. Ltd.
- Zuno General Insurance Co. Ltd.
- Royal Sundaram General Insurance Co. Ltd.
- Tata General Insurance Co. Ltd.
- ICICI Lombard General Insurance Co. Ltd.
- SBI General Insurance Co. Ltd.
Out of the 7 Insurance companies ICICI Lombard General Insurance Co. Ltd., Zuno General Insurance Co. Ltd. & SBI General Insurance Co. Ltd.
Had a cap on the room rent for hospitalization. ideally, we should not have restrictions on room rent(All the insurance restricted to 1% of the insured amount .i.e., 10,000 room rent for 10L insurance)
Comparison of Insurance policy
I have considered a Health insurance coverage of 10L. We take data from the policy from policy bazaar. Let us compare policies available in the remaining companies
Insurance Coverage
| Go Digit General Insurance | HDFC ERGO General Insurance | Royal Sundaram General Insurance | Tata General Insurance | Comments | |
|---|---|---|---|---|---|
| Policy Name | Infinity Wallet | Optima Secure | Next Gen | Medicare Premier | |
| No Limit for Room | Yes | Yes | Yes | Yes | |
| More days are better | up to 60 days | up to 60 days | up to 30 days | up to 60 days | More days is better |
| Post Hospitalization | up to 180 days | up to 180 days | up to 60 days | up to 90 days | More days are better |
| Day Care | Yes | Yes | Yes | Yes | |
| Doctor Consultation and Pharmacy | No | No | Yes | Yes | Having the Consultation expenses is good |
| Mid-year member addition | No | Child after 91 Days.Sprouse after the wedding day | No | Child after 91 Days | new member addition good to have |
| Restoration of cover | ₹10L unlimited times in a year Both related & unrelated illness | ₹10L once in a year For both related/unrelated illness | ₹10 lakh once a year for Unrelated Diseases | For related illnesses/diseases as well after 45 days from the date of discharge | Restoration to Unlimited related or unrelated diseases is preparable |
| Co-pay | Full claim paid by insurer | Full claim paid by insurer | Full claim paid by insurer | Full claim paid by insurer | |
| Hospitalization at home | Up to ₹10L | Up to ₹10L | Up to ₹10L | No | |
| Ambulance charges | Covered up to ₹10k | Up to ₹ 10L | No | up to ₹5k | Higher is better |
| Maternity cover | No | No | No | Upto ₹60k for girl child and ₹50k for boy child | Maternity cover is good to have |
Waiting Period
| Go Digit General Insurance | HDFC ERGO General Insurance | Royal Sundaram General Insurance | Tata General Insurance | |
|---|---|---|---|---|
| Pre-Existing Disease | After 3 yrs | After 3 yrs | After 4 yrs | After 2 yrs |
| Initial Waiting Period | 30 days | 30 days | 30 days | 30 days |
| Specific Illness cover | No | 24 months | 24 months | 24 months |
Additional Features
| Go Digit General Insurance | HDFC ERGO General Insurance | Royal Sundaram General Insurance | Tata General Insurance | |
|---|---|---|---|---|
| Alternate medicine (AYUSH) | No | Up to ₹10L | No | Up to ₹10L |
| Worldwide coverage | Yes | No | No | up to ₹10L/year |
| Domestic evacuation | No | Up to ₹5 lakh | No | Up to ₹5L |
| Consumables Coverage | No | Yes | No | Yes |
| Cover-organ donor | Up to ₹10L | Up to ₹10L | Up to ₹10L | Up to ₹10L |
Value Added Services
| Go Digit General Insurance | HDFC ERGO General Insurance | Royal Sundaram General Insurance | Tata General Insurance | |
|---|---|---|---|---|
| Discount on Renewal | Yes | No | No | Yes |
| Daily cash allowance | No | up to ₹800/day | No | Up to ₹2,000/day |
| Free health checkup | Up to Rs. 5,000/policy | ₹1,500/Year after 1st renewal | Once/year after 1st renewal adult-insured members in designated diagnostic centers | in designated diagnostic centers up to ₹10,000 |
| Renewal Bonus | ₹ 5L/year up to a max of ₹ 10L In case a claim is made, the renewal bonus is reduced ₹5L | ₹ 5L on first renewal and 10L after 2 year | 1L per year and up to a max of an additional ₹5L | ₹ 5L/year up to a max of ₹ 10L In case a claim is made, the renewal bonus is reduced ₹5L |
| Free Health Checkup | Yes | Yes | Yes | Yes |
| No Claim Bonus | Yes | Yes | Yes | Yes |
| Restoration Bonus | Yes | Yes | Yes | Yes |
The Limitation of Tata General Insurance
- Hospitalization at home is not available
- Restoration of cover after 45 days
- Ambulance charges covered up to 5K
The Limitation of HDFC ERGO General Insurance Co. Ltd.
- Maternity Cover is not available
- Worldwide cover not available
- Doctor Consultation and Pharmacy not available
The Limitation of Royal Sundaram General Insurance Co. Ltd.
- Worldwide cover not available
- Consumable not available
- Domestic evacuation is not available
- Mid-year member addition not available
- Pre- and Post hospitalization duration is less(30 and 60 days respectively)
- Maternity Cover is not available
- Ambulance Charges are not available
The Limitation of Go Digit General Insurance Ltd.
- Mid-year member addition not available
- Doctor Consultation and Pharmacy not available
- Maternity Cover is not available
- Consumable not available
- Domestic evacuation is not available
Conclusion
The Analysis performed on the Health Insurance is based on our understanding and certain assumptions. You will have to do the same analysis independently to choose the best insurance upon your preference.
The Awareness of Health Insurance in India is less. We should educate ourselves and spread the knowledge to our friends and relatives. This will help us save our hard-earned money when meeting with contingencies
Understanding Health Insurance policy is important, you are aware of what to claim and what not to claim. Starting Early health Insurance will allow you to cover the waiting period when you have no diseases and also the premiums will be low.
“Ignore is bliss” is no longer applicable to Health Insurance. We can pay the insurance amount monthly or yearly based on our convenience. We look at Health Insurance like paying our Rent, Water bill or Electricity bill. Insurance provider takes a premium for taking our Health-related Risk
