Heard of the saying “Health is Wealth” ? But these days taking care of your health (in case something goes wrong) may require a lot of wealth. “An apple a day keeps the doctor away”; and a Health Insurance policy keep the hospital bill woes away. So what is Health Insurance and what are the benefits?
What is Health Insurance?
A Health Insurance Policy provides you with the financial security to deal with medical problems and exigencies. During a health scare whether for yourself or your family – you do not want to be bothered with the nagging thought whether you have enough money for the treatment;
Rather you would want to focus on getting the best treatment. Having the right insurance policy will ensure that you get the best medical treatment irrespective of your financial situation.
Often people who are working may be covered by their companies but each company especially those in the private sector may have their own policies. There is a limit to number of people that are covered; the total cover might not be sufficient;
Some companies may not allow parents to be covered in case they are not dependant on you. So it is wise to check and review to kind of insurance your company provides. As situations changes so does your insurance needs; what might be perfect for your family today may not remain so in the future.
Mayank who is 25 years and has recently started working feels he does not require any additional insurance as his company provides Medical Insurance up to Rs. 200000. At the moment it might be justified, as he his young and his father (Mr. Gupta) is also working and his own insurance cover from his company which covers Mrs. Gupta (Mayank’s mother too).
When Mr. Gupta retired a few years later they had to buy a health insurance policy that covered him and his wife; Mayank’s company did not cover his parents. They were faced with a few hurdles looking for the right policy. Some policies did not cover pre existing illness at all, some covered it from the second or the third year; almost all required a number of health checkups and of course the premiums were also steep.
Health Cover for the Elderly
Now that we understood what is health insurance, lets explore insurance coverage aspects. Health insurance companies were reluctant to provide insurance to the elderly in India till very recently. However off late the trend has changed and many companies do offer insurance especially suited to needs of the elderly.
But again with progressing age the formalities involved in getting a policy increase and so does the premium. Having lifestyle diseases like a heart problem or diabetes is common today; the idea of getting a health insurance policy is lost if these chronic problems are not covered.
It helps save a lot of trouble if you buy a policy for yourself before you hit 50; it proves to be less trouble and less expensive. Bajaj Allianz, National Insurance, New Indian Insurance, Oriental Insurance are a few companies that offer good policies suitable for senior citizens.
Factors to Keep in Mind when Buying Health Insurance:
- Network of hospitals
- Track record of the TPA (third party administrator) in settling claims. A TPA is an agency appointed by the insurance company to settle the claims.
- Cashless or reimbursement facility
- Age until renewals are allowed
- Exclusions (fewer inclusions the better it is; list of exclusion covers the medical conditions that the policy does not cover).
Types of Health Insurance Policies
The next step in understanding what is health insurance are the type of policies offered
Individual Health Plan:
This is the simplest type of health insurance which covers the hospitalization expenses of the individual up to a limit. If there are four members in a family and each has an insurance cover of Rs. 1 lakh; when required each can get hospitalization expenses covered for up to a lakh.
Example: Arun has insurance from his company which cover’s his wife and two children so it would make sense for him to buy an individual insurance policy for his mother who lives with them and who is not covered by the company insurance policy.
Family Floater Plans:
This type of a health plan covers the entire family up to a certain limit collectively. These policies turn out to be cheaper than an individual policy for each family member and the probability of more than one falling in the same year is very less.
Example: Let’s assume Mr. Gupta (from the above example) takes a policy that covers him and his wife for a sum Rs. 5 lakhs and he requires hospitalization for which the bill runs up to three lakhs; then for that year the family cover is reduced by three lakhs. So if in the same year either Mr. Gupta or Mrs. Gupta require hospitalization their insurance cover would be only Rs. 2 lakh (for both of them together). Next year the insurance cover would again go up to Rs. 5 lakhs.
Unit Linked Health Plans:
These are relatively new products in the market where health insurance is combines with the investment option. Obviously the returns are related to the market conditions. These plans should ideally be avoided.
Cashless v/s Reimbursement
In case your insurance company offers you the facility for cash less hospitalization then you are required to inform the TPA within a stipulated time. The claim amount has to be approved by the TPA and the claim is settled by the hospital directly with the TPA.
Benefits of Cashless Settlement:
You are saved from the trouble to arrange for the cash to pay for the hospital expense. The hospital staff usually helps you with paperwork saving you from unnecessary hassles. Reimbursement facility means that you pay the bill to hospital directly and then submit documents and bills to the TPA to claim the expenses which are reimbursed later.
Benefits of Reimbursement Facility:
The only benefit that this mode of settlement has is that you can avail treatment both at net and non-network hospitals while in the cashless mode you necessarily have to go to a network hospital.
Treat health insurance as a necessary expense and not a way to make money. Choosing the right company is as important as choosing the right policy; there is no point in having the best policy if the company does not pay in time or does not pay at all. So read the fine print and understand their claim procedure well before you take a call.