Why do we need Health Insurance?
We work hard and save money to fulfill our dream. During our life time if we or our dependency meet with Health related issue and because of today’s sky high Hospital expenses, we will have to withdraw/break our life time savings. This will create a huge hole to our saving pockets and we will not be able to achieve our dream. To avoid these situations in our life, we must secure our investment kitty. That’s why we need Health Insurance.
I already have a Group Health Insurance from my Employer. Why should I take another Health Insurance policy?
Let’s say we will be working for a company who provides Group Health Insurance till our retirement. This means 60 years of age. Once we retire, most of the companies will not provide us Health Insurance till life time. After 60 years of age, there is high chance that we will have Health issues, which will lead us to hospitalization. At that time we can understand how much will be the Hospital cost, are we prepared for that? There are few more situations which can also arise, let’s say we switch our Job and there is a gap between our last day and joining day with our new employer. Or because of recession/some other reason, we become victim of layoff. During these periods we will not be covered with health insurance and if something related to health happens, then? That’s why even if you have Group Health Insurance from your employer; it is good to have a Health Insurance Policy of your own.
Ok, so we can take a Health Insurance policy once we decide the day of our retirement. Is it correct?
Hmmm.. Theoretically it is correct but practically it is not. Let me explain. At the time of retirement, we will be old and probably we will have health issues like High Blood Pressure, Blood Sugar, and Heart Disease. Also during our work life, because of some health issue, we might have used our Group Health Insurance. At this point, when we apply for health insurance, Insurance Company will ask to fill the application form. In this application form, we have to declare our current health issues including existing diseases and whether we had any claim with any insurance company in past. As per the IRDA, there is no restriction of age to apply for a health insurance and once a Health Insurance policy is issued, Insurer cannot deny the policy renewal even though there is a claim in the previous policy year. But Insurer can reject a new policy application or put an extra load to the premium based on the details present in the application and a health check-up report. Because of this we might not get a new Health insurance or might have to pay much higher premium at the time of retirement. Also there will be a waiting period for pre-existing diseases if the policy is issued. Hence it is better to take the Health Insurance at the early age, when we are fit.
How to calculate how much Health insurance cover we need to take and when?
This is based on our nature of work, place where we live, our lifestyle and marital status. Let’s say
- Unmarried, working and have a group health insurance from employer, if currently not able to afford the insurance premium, then wait till marriage.
- Just married, then can go for Family Floater Health policy with maternity benefit (will be have waiting period to get the maternity benefit, read the policy document carefully). Once no longer maternity benefit required, take advantage of policy portability (take policy which does not cover maternity benefit).
- Married and have kids, then go for Family Floater Health policy without maternity benefit (this will reduce the premium).
- At any point of time, we can move from one Health Insurance Company to another or from one Health Insurance Product to other within the same Health Insurance Company. We should initiate action to approach another insurer well before the renewal date to avoid any break in the policy coverage due to policy portability procedures.
- Based on our premium affordability we have to choose the Health Insurance cover. As per the current hospital charges, at least we should have 5 Lac Coverage.
- There is an important point; we require Health Insurance cover the most when we will cross 55 years. At that time 5 Lakhs Health insurance cover will be very small amount. At least we need 25 Lakhs Health Insurance Cover (if current age is 30-35). But premium will be very high if we want to take 25 Lakhs policies and as mentioned earlier, we might not get Health insurance when we reach our retirement age. So what to do? Do not worry, there is a solution. Here we can take advantage of SUPER TOP UP Health Insurance policy. We can get 20 Lakhs coverage with 5 Lakhs base by paying very small amount of money.
Why Super Top Up and not Top Up?
Answer to this question present is the difference between Super Top Up and only Top Up. For example if in a policy year, first time the insurance claim is 2L, second time 1L and third time 4L. In this scenario, if one has only Top Up policy of 20L with base 5L, policy holder cannot claim 2L (2L+ 1L + 4L = 7L, 7L- 5L = 2L) from the insurer. This is because none of the claim above mentioned claim has crossed 5L in one shot. But if one has Super Top Up, then the policy holder can claim 2L to the Insurer. Since Super Top Up consider the aggregated claim amount with in a policy year.
In Family Floater plan, should we include our parents?
Our very much responsibility is to take care of our parents in their old age and Health will be one of the factors we need to take care. If we want to include our parents in our family floater plan, then the premium will be very high. This is because of our parent’s age and premium calculation depends heavily on age. It’s better to take Individual Health insurance policy for our parents. Remember they might not get the health insurance policy because of many reason mentioned earlier. If they get the policy, then premium also will be very high. Hence before committing to a health insurance policy for parents, we need to check our premium affordability (since every year we have to pay the premium on time, to avail the facilities). We can take the advantage of Super Top Up facility here also. For example, if we are not able to afford the premium for 5L coverage, then we can build a corpus of 5L in risk free instrument with liquidity (for example FD/RD) and take a Super Top Up of 10L with base 5L by paying little premium. This way we can prevent to make a big hole in our saving pockets. If we do little-bit plan, we can provide Health Insurance Policy to our parents (this will be a beautiful gift to your parents from us).
We could see few Health Insurance company tied up with TPA and few does claim settlements in-house. What is the difference?
TPA (Third Party Administrator) is appointed by Health Insurance Company to facilitate Cash Less claim. As per the IRDA rule, TPA is only to give facilities of cashless claim settlements within their network hospitals. TPA cannot sell any insurance product and cannot reject any claim. Only Insurance Company has the authority to accept/reject a claim. If TPA informed that a claim has been rejected, then we must check with the Insurance Company for the detail information of rejection reason. Number of network hospital always will be more in TPA related insurance plan than an in-house settlement health insurance company. While taking a Health insurance policy, we must check whether all the known hospitals are present within the network hospital list or not in a place where we are currently living and where we have planned to live after retirement.
Any checklist before buying Health Insurance Policy?
We can keep these points mentioned below in our mind before buying a health insurance policy:
- Fill the application form by yourself.
- Disclose all the health related information correctly including your parents.
- Read the product brochure and check what they offer, what is covered, what is not covered, waiting period for maternity benefits/pre-existing diseases etc.
- Better to avoid co-payment options.
- Better to avoid room rent cap. This is because, based on room rent hospital charges different rate for same facilities differently (doctor visit, nursing etc). If because of some reason we have to take a policy with room rent cap, then make sure to take the room whose rent is within the limit of the room rent cap of the policy. Otherwise we will be surprised at the time of final settlement that we need to pay some part of the money from our pocket even though the total bill is within the sum assured.
- To get the maternity benefit few company puts clause as both husband and wife should be covered in the same policy. Check the policy wording carefully.
- Check the network hospital list based on our current place and future place where we will live after retirement.
- Make sure our premium affordability. Since it is a commitment. Do not take unnecessary burden; we need to be within our limit.
- Take the online route to buy the policy. Policy premium will be cheaper.
- Once we receive the policy document, go through them properly. Since we have 15 days in our hand to take a call for canceling the policy.
Once policy is issued and verified by us, our job is done?
There are few things we need to keep handy once we receive the policy documents:
- Keep the soft copy and hard copy in safe place.
- Make sure our family member knows about the policy and have access of the policy card and documents.
- Create a list of important hospital with the specialization from the network hospital list with the mail id and contact details including insurance company. Keep this copy along with your policy document, identity proof copy of policy holder in safe place and share with your family members. Also keep the soft copy in safe place.
- Keep the soft copy of Policy/Health Card in our & family members mobile.
- Build a corpus of 2L and keep in liquid funds (FD/RD/Debt Mutual fund) for Health even though we have health insurance. This is to handle health issues which are not covered by health insurance, for example initial doctor visits, Dental related issues etc.
How to make a claim for a Health Insurance Policy?
There are two methods to make a claim:
- Cashless with a network hospital. Need to take prior approval with the insurance company (through TPA if associated), in case of emergency can get admitted and then start the claim procedures. All network hospitals will be having a insurance desk, need to show the Policy/Health card, rest they will take care.
- Reimbursement: Inform immediately to the health insurance company about the hospitalization through mail or by calling to their customer care. After getting discharged from the hospital, need to fill the claim form with all the required documents (discharge summary, original medical bills, prescriptions etc) and make the claim with the insurer. Please go through the policy document properly for all the required information.
For cashless claim, one issue many people face is taking too much time to get discharged from the hospital. This is because, till the final claim settlement is approved by the Insurance company (through TPA), hospital authority will not discharge us. Some time it takes 6 to 8 hrs to complete the discharge procedures. To avoid such a long delay, from our side we need to keep on checking the status with the Insurance Help Desk and insurance company every hour.
If we have two Health Insurance Policies, one given by the employer and other one taken by self, how to make a claim?
We should go with the insurance policy which is given by the employer first, because there will be contact person from the insurer and he/she will help us to make cashless facility go smoothly. If the insurance amount is NOT enough to get the hospital bill settlement with the first policy, then we need to pay the remaining money to the hospital and claim for reimbursement with the other insurer. This is because, we cannot claim for cashless with two insurers at the same time. This situation will happen even if you have Top Up or Super Top Up policies. There are few important points to follow when we are in a situation where there will be two insurers involved.
- Inform the other insurer about the hospitalization (email or call).
- Take the duplicate attested copies (medical bills, prescriptions etc). Since original copies will be given to the 1st These duplicated copies needs to be submitted while claiming with the 2nd Insurer. Better to check the 2nd insurer what all documents are required.
- Take the settlement copy from the 1st This also needs to give to 2nd Insurer.
- Fill up the claim form and submit the same with all above documents to the 2nd
How to take the grievance with an insurance company?
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