There is a general reluctance to buying Medi-claim policy, those who are healthy, see an expense while paying health insurance premium as wastage of money. In other words, they are, perhaps waiting eventuality of a well-known fact medical hospitalization which often results in the uninsured family falling into a debt trap which arouse them to buy medi-claim to cover it. They have a plenty of reasons, not to buy medi-claim products as the fear of claims rejections or partial settlement which they are worried about getting a raw deal from the insurer. We, all should understand that there is no perfect and complete medi-claim product available in the market and insurer as every financial product is limited in scope. In that scenario, does it really make sense to buy medi-claim or not?  Every financial product may better than others, you would have to settle to find a reasonable product that meets most of your medical requirements and seek prudent ways to get better value for your money. If you want everything to be medically covered, you will have to pay the price dearly for it. However, we have explored the different ways to reduce the cost of medi-claim policy and to ensure that your covers continue uninterrupted and remain get the more value.

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Early to buy, early to get benefits

Generally, health insurance is bought only at the first sign of a health issue. But, by then, any minor illness becomes a ‘pre-existing disease’ for which the most health products are covered after long-waiting period of four years. In case of illness is serious, your insurer may repudiate your claim as per policy terms and conditions and hence, you will have to shell out expenses from your pocket. We keep always heard the horror stories of insurers rejecting claims or partial settlement which has also led to a deep resistance to buy any medi-claim policy. Ultimately, the key purpose of getting insurance is got almost defeated. Moreover, certain heath problems like hernia, cataract, kidney stone removal, knee-cap surgery, and so on are not covered up to two to four years even if they are not ‘pre-existing disease’ even you are in healthy stage. The lesson signifies that you should  buy a regular medi-claim product at a younger age so that you would have crossed all the waiting periods and will be lower chance of any dispute over the medical condition even not declared during the proposal stage. If you are healthy while buying health insurance, you would have every chance to conquer any apprehended claim rejection dispute.

Don’t disregard Medi-claim totally

You are rich and having enough surpluses to meet any medical exigencies, hence you do not need to buy any medi-claim policy. You have mistaken as you may keep the premium in fixed deposits and build a corpus for health care costs. It may help to save your annual premium cost but it cannot substitute medi-claim. The reason is obvious that there may be claims every year and, hence just saving a fixed amount is not suffice as you cannot afford recurring expenses which can go on for a long-term such as chemotherapy and dialysis etc. Having sum assured of Rs 5 lakh cover can potentially able to pay Rs5 lakh every year as your sum assured for medi-claim policy is restarted with each policy year. Any terminal illness of human life can lead to aggravate hefty bills of medical bills to have the burden of paying off the hospital bills after you die. Creating extra corpus for healthcare beyond medical cover is fine because medi-claim is not covering everything. Hence, it also makes sense to craft a plan in advance for medical expenses which insurance companies usually do not bear such as dental care, non-allopathic medicines, congenital diseases, all expenses arising out from AIDS, cosmetic, aesthetic, use of intoxicating drugs, alcohol and for certain diseases such as hernia, piles and cataract, some companies offer limited coverage. But don’t shun buying medi-claim totally even you are high-net worth individual.

Have limited budget, go for sub-limits

We know that sub-limits for procedures and room rent limit seem to be a bad deal as it can have a drastic impact on your claim payment as well as policy premium. But, it must be noted here that the sub-limits are, generally applicable for the procedures like cataract, ENT, hernia, appendectomy, hysterectomy, plies, stone removal, knee alignment, spine and vertebrae surgery, etc, not for major surgeries like heart, stroke, brain related, paralysis, cancer etc. Though the sub-limits will restrict the payment on specified procedures, people with a limited budget may go for the sub-limits options as it will help to reduce your premium. The product with a low-premium will have room rent limit of usually 1% of the sum assured as you should choose a hospital where charges are reasonable. Moreover there is no guarantee that buying a high cover and without sub-limit medi-claim product will ensure to make full reimbursement of your claim. No wonder, a huge number of claims are only partially settled citing ‘reasonable and customary’ as the reason even comprehensive policy.

Don’t run away, if co-payment clause exists

Co-payment means that the insured has to bear a certain percentage of expense incurred  on the illness, if one gets hospitalized. Co-pay is, generally common in the group insurance and applicable only for senior citizen people which may vary from 10% to 30%. It means the policyholder has to pay to the tune of that percentage amount while the insurer will pay the remaining. But it does not mean that product with co-payment clause is bad deal as it helps to keep the premium from escalating for senior citizens. Check the product benefits, if they are comprehensive and co-pay applicable for higher age-group or non-network hospital, it may be acceptable as it will also help you to be alert about the hospital charges and to do unnecessary tests.

Get Maternity Cover for limited period

Usually newly married and middle-age couples are always looking for maternity cover while buying mediclaim policy to save the cost of childbirth. Since the waiting period for getting maternity benefit is four year after the purchase of any mediclaim policy, you should buy the product before marriage so you will not have long waiting period after marriage to avail maternity benefit, if you buy it ahead of time with proper planning. The product covers only up to two pregnancies.  There will also be a limit for normal and caesarean deliveries. For example, most products will pay Rs15,000 for normal delivery and Rs25,000 for caesarean. The product can even be purchased as an individual product to avail maternity benefit when all other products have to be purchased as floater policy to be covered for maternity benefit. If you find the premium of the product high and there is no need for maternity cover after a few years, use portability to move to a product which gives better value. You can selectively buy maternity cover with mediclaim when you need it and discontinue it after its purpose is met.

Take the benefits of Portability

Today, the insures are offering various type of medi-claim products as simple family floater option, exclusive or supreme offer with maternity cover subject to limit for normal and caesarean deliveries. If you find the premium of the product high and there is no need for maternity cover after a few year, use portability to move to product which gives better value.   You can selectively port either medi-claim with maternity cover or drop it after its purpose is met. Portability allows you to change insurers and get the credit for the time spent with the existing insurer towards ‘pre-existing disease’ and other waiting periods. Even, the no-claim bonus (NCB) may be ported without paying any additional charges.

Conclusion

People are confronting with the medi-claim selection process. Everyone wants to get better value for their money, but there is no complete and full-proof solution, check your key requirement rather than chasing the product that professes to cover everything.  If you purchased in utmost good faith and did everything to comply with the product terms and conditions, you can fight for your right. It may be delayed, but a genuine case will win with time and perseverance. The insurance company’s decision is not final or binding.

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Suresh Kumar Narula

SEBI Investment Advisor, Founder & Principal Financial Planner at Prudent Financial Planners
Suresh K Narula is founder and Principal Financial Planner at Prudent Financial Planners. He has earned the professional CERITIFIED FINANCIAL PLANNER and got registered with SEBI as Investment Advisor. He writes on personal and financial planning articles and got published in Dainik Bhaskar, Business Bhaskar and The Financial Planner's Guild, India. He is also a member of Financial Planner's Guild India ( An association of practicing SEBI registered Investment advisers) to create awareness about Financial Planning in general public, promote professional excellence and ensure high quality practice standards. Suresh received his an M.com from Himachal Pardesh University and an MFC from Punjab University, Chandigarh. He can be reached at info@prudentfp.in
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