Last year, Ranjeet Deshmukh decided to quit his job in Mumbai and re-locate to Pune. He had planned a month-long vacation before joining the new company. But just a week into the vacation, Deshmukh suffered a stroke and underwent brain surgery. He was hospitalised for a week, re-admitted about a month later with complications for a couple of weeks more. The hospital and the doctors who had treated Deshmukh soon began sending notices, demanding payment. His family suddenly realised that since he was between jobs, the health insurance cover from his earlier company was no longer valid. This meant that the entire bill had to be borne by his family, with him having been out of action for almost a year. Deshmukh’s is not a one-off case. Health insurance is probably the last thing on people’s priority list. The attitude is normally, ‘Oh my company has a cover for me’. However, there are plenty of questions that never get asked. For example, what happens when you quit your job? What happens if the cover is not enough? What kinds of illnesses are covered under the policy? Here are a few myths debunked:
Do I need a standalone health policy?
No matter what your company offers as health benefits, you need to get yourself a standalone policy, says Kartik Jhaveri, director, Transcend Consulting. Especially for the young and healthy, the prospect of keeping aside money for premiums and going without any sort of coverage is a very tempting option. By all accounts it’s not a good idea. Simply because illness and accidents don’t come with a prior appointment! With premiums as low as Rs 100 a month, just skip a couple of lattes a month, and you should be able to get yourself a good enough health cover.
What kinds of policies are available?
The six main types of policies you could consider are, health (or medical) insurance policies, critical illness policies, personal illness, accident policies, hospital care policies and surgical assistance policy. These are mainly offered by non-life insurance companies, in the public as well as private sectors. Some of these policies also come as add-ons with life insurance policies. For instance, critical illness cover comes as an add-on with some life insurance products. It’s a good idea though, to get yourself a standalone medical insurance policy from a general insurer. The IRDA website (www.irdaindia.org) is a good place to start for more information on the insurers.
Cashless policy is even better
A lot of people are confused, with good reason, about what policy is good for them. The answer is not easy and does not come in ‘one size fits all’. Every individual will need a different type of cover depending on various factors such as age, health condition and such. One of the first questions to ask is whether the policy gives you a cashless facility. With cashless policy, you get a card that states the name of a few hospitals where you can get yourself treated without having to pay any money. The insurance company will settle your bills on your behalf. This type of policy is better than one where you need to pay money up front and get your claims settled later.
Check reputation of hospitals and TPAs
The second question you need to ask is how many reputed hospitals does your insurance company have tie-ups with. And how many of these hospitals are within easy reach for you? If the list is not good enough, just scratch the company off your list at the start itself. Another important factor to consider is the TPAs (Third Party Administrators). These are the middlemen who bridge the gap between you, the insurance company and the hospitals.
Select a policy that suits you the best
Jhaveri advises that you should realistically evaluate which benefits you need before you shop for individual coverage. “A single man may not need maternity coverage and may be able to save by choosing a plan that doesn’t offer such a benefit,” he say. Similarly, at a young age—unless you have a family history of some critical illness—you normally need not go for a special critical illness policy. A general all-purpose health insurance policy from general companies is good enough.
Read the fine print
Don’t just go by the name of the company, say analysts. Instead, you should read the fine print very closely while shopping for a policy. Niyati Raina, a Mumbai-based homemaker, was up for a rude shock when her critical illness policy refused her claim when she underwent treatment for first stage Leukemia—this despite the fact that the disease was listed in the policy. “They told me we will pay for treatment only after the third stage. That’s when I am almost dead, so what’s the point!” fumes Raina. We come across plenty of such funny clauses, says Zankhana Shah, a certified financial planner. For example, pregnancy is normally not covered. Then there are times when they have different definitions for disability. “There was a client who had broken a leg in an accident, and could barely move the other leg, but his policy denied his claim saying that he can still move the other leg,” says Shah. “Therefore make sure you read the fine print carefully before you sign up for a policy. In fact, since the policy document is so full of jargon, it is best you consult your physician, especially when you take a critical illness policy, just to be sure of the clauses in it,” adds Shah.
Declare your existing conditions
Another mistake that people make is not declaring pre-existing diseases. For instance, Praveen Mehra, a Mumbai-based electronics engineer, was declined a treatment for liver transplant, simply because he had forgotten to mention his anaemic condition while he signed on for a policy. With some conditions, it is difficult to get a policy. But investigate to see whether you can still get a cover by paying a higher premium. “You may be able to purchase an insurance plan that has a high premium and may disallow benefits relating to your specific condition but will still offer you protection against unknown health risks,” says Shah.
How much cover do I need?
There is no right answer for this one. For example, a Rs 2 lakh cover is good when you are between 20-30 with no family history of illness. But with a history of disease, you might need to insure yourself for up to Rs 5 lakh. Another thumb rule, says Jhaveri, is to enhance your cover with age. The older you get, the bigger your coverage should be. Also, as with all other insurance policies, the sooner you get the policy, the less you pay in terms of premiums. So begin early.
Source: Kavita Kukday, Times News Network
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