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Mediclaim Policies: cheap, not necessarily the BEST!

Confused about which mediclaim policy is the cheapest or best for you, evaluate your policy on various parameters and save yourself from making a wrong choice based purely on price.

Harsh Roongta

08 Apr 2009

Healthcare costs for hospitalization in India have risen sharply in the recent years in tandem with global trends. Many families have seen their financial planning going haywire due to unexpected costs incurred on hospitalization of a family member. However, the good news is that now there is a far bigger consciousness about medical insurance.

Still people are stuck with one basic question particularly the first time buyers - Which is the cheapest mediclaim policy? But this should not be the only concern, you have to evaluate your policy on various other parameters as well and save yourself from making a wrong choice based purely on price.

Say, if you have diabetes, wouldn't you (all other things being the same) buy a Mediclaim policy that may be a little more expensive? But which will immediately cover the hospitalization expenses arising from complications connected with this disease (heart problems, kidney or eye problems associated with diabetes) without considering them as complications arising from pre-existing disease. Or would you go in for a comparatively cheaper policy which treats all such diseases as pre-existing and hence not immediately coverable. Spot the difference!

Pre-existing disease is probably the most important parameter, which is relevant because if a disease is treated as pre-existing then the policy normally provides no coverage or very restricted coverage for expenditure incurred due to that disease in the immediate future.

Pre-existing disease coverage, a broad parameter, which encompasses the following:

    1. The Definition: Most policies provide that any disease that was present at any time in the past (including any disease, which the insured person may not have been aware of) is treated as pre-existing. But some have a narrower definition which may extend to only diseases for which the insured person had sought consultation for or was treated for or he was aware of during say the last 4 years. (Narrower the definition, the better it is for consumers).

    1. The cooling off period: This is the stipulated period earmarked by the company, which denotes that after how many years of continuous coverage the pre-existing disease will get covered. This is important as after the expiry of the cooling off period even pre-existing diseases get covered. A fine point is to find out if the company you are considering allows your track-record of continuous coverage from another insurance company for the purpose of calculating this cooling off period or insists only on continuous coverage with itself for this purpose.

    1. Special dispensation for diabetes/hypertension: Diabetes and hypertension, have acquired epidemic status in India. A host of illnesses/diseases such as heart disease, kidney failure, paralysis, stroke, eye problems can trace their root cause to either diabetes or hypertension or both. Since the definition of pre-existing illness includes any complications arising there from, this has been a major reason for disputes between the Mediclaim providers and the consumers in the past. Hence, any policy that provides a special dispensation for the complication arising out of diabetes/ hypertension is relevant for a person suffering from either.

Other vital parameters:

  1. Sub- limits: Here the overall coverage is broken down into the maximum payable for a particular kind of expense. For e.g. A few insurance companies now provide that room rent cannot exceed 1% of the covered amount or that doctors/consultants fees cannot exceed 20 or 25% of the covered amount.

  1. Co-Pay requirements: Quite a few companies now require that the insured bear a certain percentage of the eligible expenses either unconditionally or under certain conditions. Some companies provide a discount in premium if you agree to co-pay. Others might want a co-pay if you choose to get treated in a non network hospital or others may have a co-pay for choosing a single air conditioned room or for getting treated in a hospital in a higher cost city. The co-pay feature is built in to ensure that the insured chooses the appropriate hospital/room/doctor level relevant to his economic status and also watches the reasonableness of the charges levied by the hospital to ensure that there is no overspend or overcharge just because of the existence of the mediclaim policy.

  1. Specific exclusions: Almost all policies have general exclusions such as costs incurred for Aids/Sexually transmitted diseases or congenital diseases, etc. Watch out for exclusions if it affects you.

  1. Maximum coverage amount: This is important, as a particular policy that suits you may not be available for coverage that you seek.

  1. Maximum age at entry: Particularly relevant for senior citizens as quite a few policies may not be available to them.

  1. Renewability upto what age : Relevant for senior citizens as well as people in their 50s since they need to be able to enjoy the benefit of their track record.

A summary of parameters is given in the table below:


Relevant for

Definition of Pre-existing disease

Consumers having pre-existing diseases

Cooling off period for pre-existing disease coverage

Consumers having pre-existing diseases

Special dispensation for diabetes/ hypertension

Consumers suffering from diabetes/ hypertension


All consumers

Co-pay requirements

All consumers

Specific Exclusions

All consumers

Maximum Coverage amount

More relevant for senior citizens

Maximum age at entry

More relevant for senior citizens

Renewability upto what age

More relevant for senior citizens

Go ahead, evaluate your policy on these broad parameters, and make the wise decision.