POINTS TO CONSIDER WHEN BUYING HEALTH INSURANCE 1 IT'S A Complsion ( Apart from Group Insuance) There shouldn't possibly be any

debate on whether you need Health insurance or not . Firstly the risk of falling ill is increasing daily basis. - be it on account of polluted air , pesticides in your food , strees and \ or bad lifestyle . Second , the cost of treatment is galloping away with no end in sight . So the probability is fairly high that you will spend a fairly large sum medical treatment . Now , the costs , the premium that you would normally have to pay every year for covering your whole family would be very nominal . So much so that even 5-10 years of premium payments may work out less than just one major problem during this period . In case you don't make a claim during the year ,your sum insured may incerase by 5-10%OR 100% Add on some health plan at the same premium as a no - claim bonus . In fact , if there is no claim for 4-5 years you could even get the option of a free- medical check -up after this claim free period . So , it would make ample sense for you to cover you and your family for medical emergencies . Besides , given the job uncertainties nowadays , it would be prudent to buy a policy of your own even though you may be having one from your employer . 2. Includes And Excludes. A typical medicaim policy would pay practically all your actual hospitalization expenses such as doctors' fees , opretion charges , medicines , nurse , ambulance , blood , oxygen , room , charges , expenses . It would also cover related expenses( except any accedent injury ) 30 days prior to and 30\60 days after the pre and post hospitalization in some plan 90/180 days. The hospitalization should be for minimum 24\ 48 hours ; excepting certain casea ( e.g. the patient can't be moved or the surgery doesn't require that much stay , etc. ) In certain cases called exclusions , however , you would not be eligible for a claim e.g.

- Any problem within the first 30 days of the policy , except accident . - Your pre- existing illnesses ( these get covered after first 3/4 claim - free years ) - certain specifiled diseases \ disorders may not be covered for the first 2 years e.g. cataract , stones , arthritis , gout , hernia , etc.( check the list before buying a plan ) - Dental treatment . - maternity ( may be covered in some plans ) Expenses arising from HIV/AIDS and related tratments. Hospitalizations due to war or an act of war or due to nuclear,chemical or biological weaponand radition of any kind. Non allopathic treatment,congenital diseases,mental disorder,cosmetic surgery or weight controll treatment.

3. Expense Limits Needless to mention that the maximum amount that you can claim is the amount of sum you have insured in the place . So if you have insured in the first place . So if you have taken Rs . 1 lakh cover , you will at most get Rs. 1 lakh from the insurer. ( In some plan you can get 100% extra sumassured to be used with zero extra cost premium ). However , the insurer also fix sub-limits for certain expenses . for example your room rent may be fixed at Rs . 3,500 \ day . If you incure say Rs. 4,000 \ day on the room charges , you will not get this diffenence of Rs. 500 even though your total claim may be much less than Rs. 1 lakh . ( In some plan there are no such room rent limit ) Or the doctors' fees and other consulation charges may be restricted to a certain percentage of the sum insured . Or the cost of a particular surgery . may fixed . ( In some plan you can use pre and post limit with doctors fees and report etc... with samr hospital ) That apart , there could also be some deductibles or co-insurance i.e the part amount of the total expenses which you would have to bear .

You , therefore , need to cerefully check and note these sub-limits and deductibles so that you can , as far as possible , ensure that you don't exceed these limits unnecessarily . However , note that for a typical mediclaim policy there is no limit on the number of claims you can make in a year , provided that total sum insured is not exceeded .( exception in some plan ) 4. Premiums It is but natural that the age would paly a key role in determing the premium . Insurers may also consider factors such as family medical history , occupation etc. to calculate the premium you have to pay . To give you some idea about the costs -Rs . 1 lakh of cover for a person of age 30 would cost around Rs. 1200- 1600 per year . For a 45 year old person ,the premium could be around Rs. 1500-200 p.a . The sum insured generally varies from Rs. 1,00,000 to Rs. 10, lakh. ( 100% extra in some plan with zero cost) By paying a nominal additional premium , you can also opt for extra benefits or riders such as critical illness, attendants to take care of the patient post discharge , minor surgeries , maternity expenses , etc. After the age of 40-45 you may be asked to furnish a medical certificate at your own cost when you apply for a policy . Before that , most insurers will not insist on your medical check-up . In fact, given the high incidence of diseases in the old age , It is usually both difficult and expensive to by medical cover bryond 55-60 . 5. Claim Procedure There are two ways to make a claim . One is direct and the other throgh Third Party Administrators ( TPAs ) Under the direct method , you would first pay all your bills to the hospital and then lodge a claim with the insurer . The insurer, after duly verifying all the original documents , will reimburse you the expenses as per the policy . The more common aproach nowadays is to go through a TPA appointed by the insurers . As the insurer's agents , they take care of hospital networks , documentation and claim settlement . They also enable you to opt for a cashless facillty i.e. all the bills will be settled by them . You don't have to

make any payment , except those outside the purview of the policy . unless it is an emergency , it is important to first write to the TPA and the insurer at least 48-72 hours before the impending hospitalization and take their concurrence . For emergency hospitalization , make sure to infrom them within 24 hours . While you can go to any gospital of your choice , cashless settlement is possible only if you go to one that falls in the insurer's network of hospitals . Besides , in direct cases too , the claim settlement is relatively easier . By the way , even if you have bought the policy in one city , you can get yourself treated in a hospital in another city . 6. Individual Of Floater Policy

You can buy either an 'individual mediclaim policy ' , where you and your family would be covered on an individual basis or a ' floater mediclaim policy ' , where all the family members are covered under a single sum . For example , you buy an individual policy totsling Rs. 6 lakh where you and your spouse are covered for Rs. lakh in a year and your children up to Rs. 1 lakh each . Instead , if you take the Rs. 6 lakh floater mediclaim cover , each one of you can claim up to Rs. 6 lakh i.e. claims of all family member put togrther shall be Rs. 6 lakh without any individual limits . Thus , you have flexibility here . Moreover , the probability of all family members being hospitalized in a single years is low . Thus , you can save some premium by going for a lower overall cover of about Rs. 4-5 lakh . Presently , you can cover your spouse , dependent children up to the age of 25 and dependent parents \ in - laws under a floater policy . 7 . Critical Illness Plans The critical illness plans work diffenently than a normal mediclaim plan . Here you get the entire sum assured once you are diagnosed with certain 'pre- specifild ' diseases e.g. heart attack , cancer , diabetes , stroke etc. There is no need to give any proof of expenses incurred \ to -be-incurred . The only condition usually stipulated is that you won't get any claim in the first 90 days of the policy and that you should survive at least for 30 days

after the diagnosis . Non- submission of bills and getting the full amount may be attractive , but taking only a critical illness policy is not wise as the cover is limited to only specific diseases . What if your disease is not covered under the policy ? But this policy has an interesting use . A serious illness, e.g. a heart attack , would also mean not being able to work for a considerable period of time , which will affect your earnings . As such , while the mediclaim policy pays for the expenses incurred on curing the illness , the money from a critical illness policy will cover for your loss of income . This policy , therefore usually works best as a combination with a normal mediclaim policy . You can buy critical illness cover either as a standalone policy or as a rider with your life or health insurance policy . Due to flexibility , generally a standalone policy works better . 8 . Daily Hospital Cash ( DHC) Plans These are usually long tenure plans ( generally up to 10 years ) , where : • A fixed sum is paid based on the number of days of hospitalization . There is no link with your actual expenses . If the sum is fixed at Rs . 3,000 par day and you are hospitalized for 10 days you get a flat Rs. 30,000 ; Whether you actually incur lesser amount or higher is immaterial ( for an ICU stay , the amount paid out is double ) A Specified lump sum amount is paid for pre - define surgeries as well

However , the plan doesn't cover unlimited stay at a hospital . you will be eligible to claim only for a specifiled number of days in a year and up to a specified limit during the policy term . Also , you can claim for only a specified number of surgeries ( usually 3 ) during the term and you can't claim for the same surgery more than once . The daily amount could vary between Rs. 500 to Rs. 5000 as per your choice . like the normal mediclaim policy , here too the minimum hospitalization should be for 24-48 hrs . Since a normal mediclaim policy generally serves the purpose better and at a much lower cost , this type of policy could be taken as an

add - on policy . It should not be your main policy . 9 . unit Linked Health Plans Similar to the very popular unit linked Insurance Plans Or ULIPs , you also have Unit Linked Health Plans ( ULHPs ). ULHPs are typically DHC plans coupled with investment i.e. a part of the premium pide goes towards providing you the daily hospitalization cash , as and when required as per the policy , you gat back the fund value . Like a typical ULIP , ULHP also has premium allocation charges , health insurance charges , fund management charges policy administrations charges . etc. Since these charges are Normally much higher than pure investment products , it is preferable to avoid mixing health insurance needs with investments . Moreover , as mentioned earlier , DHCs do not provide comprehensive cover as a normal mediclaim policy dose . Thus , a normal policy is generally better than a DHC. And for investment you already have many other , far superior , products . so why mix the two ?

10 . General Insurance Company Or Life Insurance Company Earlier only general insurance companies companies offered mediclaim cover . Recently however , even life insurance companies have joined the fray . However , there are certain crucial differences between the two : • • General insurance offer policies for 1-2 years , which means that the premium may differ year .Life insurers offer long- term policies of 3-10 years . Thus , your premium is possibly fixed for a longer term . Life insurance usually do not offer plain and simple mediclaim plan . It would probably be some sort of combination of life cover , unit linked health plan , daily hospitalization plan , critical illness , surgery , accident etc. Policies from general insurers your actual expenses , whereas those from life insurance pay you only a pre-specified amount . There could be an element of saving in policies from life insurers .

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As you have seen earlier , simple mediclaim policy would possibly serve

better in most cases . Hence , stick to the plain vanilla mediclaim policies from general insurers ( even though the risk of premium variation and non- renewal remains ) . At best , you can think of buying others to supplement the same . 11. Portability . You can use easily portability. If you are insured under another insurer's health insurance policy you can transfer with some another insurance policy.

Regards Kirang Gandhi Independent Financial Planner www.fpindia.in M-9028142155