Which health insurance policy to buy?

There is only one thing on everyone’s minds now ― a safe and healthy life. But given that there are not many things under one’s control, it is prudent to take a health insurance policy. While the cost of treatment of Covid-19 could run into a few lakh rupees (at private hospitals), the treatment of illnesses related to the heart, or say, cancer, could cost far more. If you are not insured, you may have to dip into your savings to pay for the medical treatment.

But with more than a handful of players offering health insurance plans today, the options in health covers available currently can be trifle overwhelming. Here, we help you decide on the right plan based on your age and life stage.

Young individual (25-30 years, single)

For the age that you are in, a basic medi-claim plan will suffice. You need not opt for features including ‘hospital daily cash’ or higher NCB (no-claim bonus) or worldwide treatment cover. This is due to two reasons, one, being young and single you may not need a large cover and opting for these additional features will only increase the premium.

If you do not have any chronic health complaint, go for a four-year (maximum available) pre-existing disease waiting period which can help you save premium (there are options of three and two years too). That said, buy only a comprehensive health insurance policy without sub-limits. Sub-limit curtails the outgo on the insurance cover for the insurer by capping the amount the policyholder can claim. Generally, insurers place sub-limits on room rent, ICU charges, and domiciliary treatment. You can consider Royal Sundaram’s Lifeline Supreme or Max Bupa’s Health Companion. There is no sub-limit on room rent or other charges in all these policies. In Max Bupa’s Health Companion, all-day care treatments (including cost of dental and ENT procedures) and domiciliary hospitalisation are covered up to the sum insured (SI).

Religare Health’s Care is also a good option, but note that it accepts claims on domiciliary hospitalisation for only up to 10 per cent of the SI. Also, if you go for an SI of ₹4 lakh ― the lowest cover offered by the insurer, there will be sub-limits on room rent and ICU charges.

Middle-aged individual (30/40 years) with spouse and kids

If you are in the 30-40 age bracket and looking for a single policy that covers your spouse and kids (called a floater plan where SI is available as a pool to be used by all members under the plan), there are a few things you need to keep in mind.

First, look for a policy where there are no sub-limits. You need to be careful about policies with sub-limits because they do not limit only the expense on which the sub-limit is imposed but also the overall claim. This is how it works: For instance, say, the insurance company ‘X’ has a sub-limit of 1 per cent on SI for room rent. Say, you have a ₹2-lakh policy, you will be allowed to choose a room of ₹2,000. In case the room rent is higher, say ₹4,000, the balance ₹2,000 has to be borne by you. The few thousands extra here may not pinch you. But note that since you exceeded the limit on room rent, the insurer will make only a partial settlement on the total claim under the ‘proportionate reduction’ clause. If your total claim for hospitalisation is ₹2 lakh, the insurer will settle only ₹1 lakh! Today, most private health insurers offer at least one plan where there is no limit on room rentals or ICU charges. So, choose one such plan.

Second, look for the right ‘no-claim bonus’ (NCB) feature (increase in SI without increase in premium in years of no claim). This is necessary to take care of the medical cost inflation. All health policies in the market offer the NCB benefit but there are variations. The common NCB feature works thus: For every no-claim year, the SI will increase by a fixed percentage, usually 10/20 per cent. This will continue till the cumulative bonus reaches the cap specified under the policy (50 per cent or in some cases 100 per cent of SI). However, note that in case of most insurers, after the first year of claim, the SI starts to reduce at the same rate it increased. In Max Bupa’s Health Companion, however, the increase in SI in the previous years due to the NCB is not reduced when a claim is made. This is the case with Royal Sundaram’s Lifeline Supreme too.

If yours is a family with older kids, you have to make sure you have adequate SI, and it is ideal that you look for policies with ‘restoration/re-load/re-fill’ benefit. In policies with this feature, if you exhaust the SI and the no-claim bonus, the base SI up to 100 per cent is restored through an auto-trigger mechanism. The restored SI, however, can be used only for a different illness or for the same illness suffered by a different member of the family. This is the case with Royal Sundaram’s Lifeline Supreme, Max Bupa’s Health Companion and also ICICI Lombard’s Complete Health Insurance plan. But HDFC ERGO Health’s (formerly Apollo Munich) Optima Restore, the policy which introduced the ‘restore’ feature in the market, pays claims on related illnesses too, from the restored SI. In HDFC ERGO’s my Health Suraksha too, the restored SI is available for claims on same/related illness.

If you are in your 40s and have health conditions such as hypertension and related ailments, ensure that you buy a health insurance cover without a long waiting period for pre-existing diseases. Generally, for pre-existing diseases, most insurers have a waiting period of four years. But there are also policies in the market where the waiting period is three or two years too (for a little higher premium). Optima Restore (HDFC ERGO Health), my Health Suraksha (HDFC ERGO), Health Companion (Max Bupa) and Lifeline Supreme (Royal Sundaram) are some plans that offer a three-year waiting period for pre-existing diseases. Digit General Insurance’s Maxima Restore Super plan and ICICI Lombard’s Complete Health Insurance plan have a two-year waiting period on pre-existing diseases.

Senior Citizen (60 and above)

If you are in reasonably good health, you will still be able to get a regular health insurance cover. With most insurers today, the maximum age at entry is 65 years. However, there are also insurers who cover everyone irrespective of their age. This includes Aditya Birla Health, HDFC Ergo, Max Bupa and Royal Sundaram. The advantage of going with regular health insurance plans is that most of them may have no sub-limits or ‘co-pay’ requirements. ‘Co-pay’ is asking the policy holder to share a portion of the hospital bill. If you go looking for senior citizen plans specifically, the premium may be lower, but these will come with mandatory co-pay requirement of 10-30 per cent. For pre-existing illnesses, the co-pay may be as high as 50 per cent. Among regular health plans, Royal Sundaram’s Lifeline Supreme, Max Bupa’s Health Companion, HDFC ERGO’s my Health Suraksha and HDFC ERGO Health’s Optima Restore, do not have ‘co-pay’ requirements, and are options for you to consider.

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