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When applying for Health Insurance

With rising medical costs, it has now become imperative for everybody to get Health Insurance coverage. Here are the Top 6 factors to keep in mind:

1.  Adequate Coverage Amount
  
Take an adequate cover to protect yourself and everyone who is dependent on your income - e.g. your family members. Hospitalization costs are higher in metros; people living in metros typically should opt for a higher coverage amount
   
2.  Re-imbursement or Cash Allowance?
  
Health Insurance comes in various flavours. It is imperative that you understand the difference between re-imbursement plan and a cash allowance plan. A cash allowance plan cannot replace a re-imbursement plan (often referred to as "Mediclaim" - because here the amount you get is based on the actual amount of expense incurred whereas in a cash allowance you get a fixed lumpsum for every day you spend in the hospital - no matter how expensive the treatment might be
   
3.  Cashless Facility
  
Imagine having to run around to arrange for cash in an emergency situation for getting admitted to the hospital of your choice! Most insurance companies had launched cashless cards for re-imbursement based plans - so that you could simply present the card at the time of admission and an administrator would take care of settling your hospital bills directly from the insurance company. However in mid-2010, several public sector insurers withdrew support for the cashless facility. Before buying your Health Insurance, you may want to check with your insurer how many hospitals does he offer support for the cashless facility and especially about the hospitals in your area. But please remember that just because a hospital is in the cashless network at the time of taking your first policy it may not remain in the cashless network when your claim arises. So this cannot be the sole factor for deciding about the health insurance company.
   
4.  Age until Renewals allowed
  
Most of us will certainly fall ill at some point of our lives - and the chances are that we will fall ill when we are older. Entering into a new Health Insurance plan is significantly cheaper and easier when one is young & healthy. The chances of having any major pre-existing disease is lower so most plans are available and also the insurance company must disclose today the premiums applicable today as well as the premiums applicable at an older age Ensure that your health insurance plan is renewable after 65 - because at that age, you don't want to discover that health insurance is difficult to get when you need it the most.

5. Co-pay

One of the fears insurance companies nurse is that the customer might opt for unusually expensive hospital rooms or procedures than are warranted. To overcome this, some insurance companies introduce a co-pay or sub-limits. In a co-pay you are required to share some of the expenses incurred - regardless of the amount covered.

E.g. say you have a 3 lac cover and the bill you want to be re-imbursed amounts to Rs. 2 lacs. With a plan that has a 20% co-pay, you will only get 80% of the bill re-imbursed by the insurer - i.e. Rs. 1.6 lacs and you will have to bear the rest).

For the same coverage amount, a plan with a co-pay should come with a much lower premium than one without a co-pay. Sub-limits simply restrict the amount of re-imbursement for individual bill items - e.g. even a Rs 1 lac bill may not be fully re-imbursed for a Rs 3 lac coverage amount, if say the sub-limits set on room rentals/ doctors fees/ OT charges - or even a specific procedure (e.g. cataract/ knee replacement) is exceeded. Again a plan with sub-limits should have a lower premium for it to be worth considering.

6. Temporary and Permanent exclusions

Normally most policies provide coverage for pre-existing diseases only after a waiting period. Remember pre-existing disease is not just the disease you are suffering from at the time you took the first policy but also any other disease that is caused due to such pre-existing disease. A common example is that heart illness will also be treated as pre-existing (even though at the time you took the first policy you had no heart disease) if you had diabetes when you took the first policy since the heart illnesses is caused by Diabetes. This single item is responsible for most of the disputes between insurance companies and consumers. So make sure you disclose everything that is required in the form. Please do not sign a blank form and leave it to the agent to fill the form later. This will ensure that at least at the end of the waiting period you will get the disease covered. If you do not disclose the disease then you run the risk of your policy being cancelled or a renewal being denied if this fact is discovered later.

 

Apart from the above  illness contracted during the first 30-90 days of the first policy is normally not covered. Some specific diseases/treatment such as cataract , knee replacement, etc. may also be covered only after a waiting period.

 

There are permanent exclusions as well such as beauty treatment, sexually contracted diseases, non allopathic hospitalization expenses , etc.  Always read the policy brochure carefully and also look at the section dealing with permanent exclusions in the policy document.

 

Keep a copy of all documents submitted to the insurance company for your future reference.

Any promise made by the agent or even an official of the insurance company has no value unless it is in writing or at least on email.

So if you are basing your decision on any such promise make sure you get it in record in some form.


 

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