Health Insurance-tips

Health Insurance:

There are two types of Health Insurance available in the market.

Health insurance plans can be broadly categorized under two heads: Indemnity and Defined Benefit. The former are generally health insurance policies that indemnify you for your hospital expenses, both pre- and post-hospitalization and the listed day-care facilities including any operation expenses (if covered).

Defined benefit plans pay a stipulated amount on the event of occurrence of an insured event. More popularly these are known as Critical Illness covers. They pay a sum assured in case you contract any of the critical illnesses insured for. This cover ends once the defined event has occurred.

Income Tax Benefits:

Comes under Section 80D of Income tax Act 1961 where tax deduction can go up to Rs 60000/-.Anyone can claim up to 25000/- for self and family.In case of a senior citizen then maximum limit can be 30000/-.So technically if you and parents(senior citizen) then Rs 55,000/-.If you and parents have attained the age of 60 then total deduction can go upto Rs 60000.00.You can save tax up to 18000/- in tax(if you are coming under 30% bracket)

Think about the following:

  1. Affordability: Affordability of the premium one should able to pay every year within his /her income.
  2. Life style: Life style plays a big role in deciding the health cover.Ideally one should take 100% of annual income but one should consider other factors while deciding for the health cover like pre-existing medical conditions, taking prescription medicines, any history of any hereditary diseases, lifestyle diseases and exposed to hazards or hazardous living conditions during your work etc
  3. Compare Prices: One need to compare prices and know what type of coverage one is getting for your money.Do not forget to read the terms and conditions.
  4. Cheaper option: If one cannot afford to take individual policies then family floater option would be advisable for a family. It acts as a common policy for all family members. Also those who have coverage through their employer.
  5. Research: Carry out research on health coverage,compare prices and benefits and take necessary decisions.It is very time consuming & complicated in choosing right one.

Choosing a health insurance cover

  1. Co-pay clause: Co-payment implies you need to pay a certain percentage of the insurance claim first and then the company pays (mostly in senior citizen policies) OR in case of a higher cover for health insurance you opt to pay a certain percentage first, then the insurance company pays OR in case you opt for treatment with high service standards / costly cities (metros / A/C rooms / suites) you pay a certain percentage and then the insurance company pays.
  2. Network of hospitals: Check from your hospital if they are covered under the health cover policy you are about to buy.
  3. Limit and Sub limit Clause: Any limits, such as on room rent (if you plan to take a higher category), will automatically lead to a proportionate increase in other charges.
  4. Max age: Max age for the policy which can be renewed.Higher the the age better is the option. Upgrade Clause with Age or Simple Up gradation.Choose for company which gives life long renewal.
  1. Pre hospitalization: Medical Expenses incurred in respect of treatment of an illness for 60 days period which precedes hospitalization.
  2. Post Hospitalization: Medical expenses incurred for medical treatment and investigations which are carried out.
  3. Emergency Ambulance: There is cover for transferring to other hospital and in between by the hospital ambulance or from a private service provider.
  4. Medical expenses during hospitalization: Medical expenses incurred following advice from a doctor which includes accommodation, boarding expenses nursing home, supervision cost etc.
  5. NO claim Bonus: Being a good customer with claim-free years is normally rewarded with either discounts or no-claim bonus. Medical inflation is almost 15% to 25%, which means that costs double every three to five years.
  6. Oversees Mediclaim: Fits to persons who are travelling frequently.
  7. Incurred Ratio: Incurred ratio is the total amount of claims paid by insurance companies to total amount of premium collected during the same year. Normally high incurred ratio can be of several reasons. Medi Claims given are compensated from other type of insurances. Stand alone health companies are well within 60% to 70% of incurred ratio.
  8. Super top up: Manage expensive premiums by adding top up to reduce premiums.
  9. Portability conditions: One need to check the terms and conditions for future portability.
  10. Exclusions: Look for the exclusion clause what are diseases are excluded compare with other policy.For critical illness, those diseases for which there is a higher degree of susceptibility in your family’s medical history should be included. Look out for those on the plan. Consider getting additional covers, like critical illness, accident cover, hospital cash, surgical cover, etc. These can be added to your existing policy as riders, for an added sum to your premium

In fact when it comes to medical Insurances our Govt. needs to do more. The Govt of India would enable people to opt for suitable Health Insurance with affordable premium, which could be with tax benefits. After all over 80% people in India work in the unorganized sector. Healthcare is about availability and also affordability.

These above conditions may not be exhaustive in deciding a Health Insurance Cover but one needs keep in mind the above points while deciding to purchase a health insurance cover. Read the fine print and if you are satisfied then take up with the company. Cheapest Premium does not mean best plan. Plans with lower premiums may have added further loading. . You should disclose all details of pre-existing diseases. It may not be a good idea to conceal any material information which might affect your claims adversely when the time comes.

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