Sunday , 25 June 2017

Medical Insurance

Why is health insurance a must have?

Getting yourself a health insurance policy is much like visiting the dentist; you know you should do it but you avoid it till the last possible moment.

Health Insurance is an absolute necessity for every individual – young or old. Here’s everything you want to know about health insurance.

I am healthy. Why should I take health insurance?

A health insurance is a way of ensuring you and your family against any financial contingency arising due to an unforeseen medical emergency.

The average life span of an individual has increased considerably, owing to improved medical facilities and increased awareness about one’s well being. However, at the same time health care and medical costs have also skyrocketed. Moreover, there has been an increase in incidence of medical problems due to lifestyle related issues like stress and eating habits.

With soaring health care costs, a serious injury accident or surgery that might require a hospital stay can set you back by lakh of rupees. Therefore, medical insurance makes complete sense. It is advisable to take health insurance when you are young so that you have a number of choices available and can choose the best and most affordable plan.

How does health insurance work?
To purchase health insurance, you need to pay an annual fee to the insurance company known as “premium”, for the coverage (sum assured) you require. The higher the premium, the more the coverage offered by the company.

What factors determine the premium amount of the health insurance?
Under health insurance, the age, health issues and the amount of cover are the factors that decide the premium. Usually, younger people are considered healthier and thus pay lower annual premium. Older people pay a higher health insurance premium as their risk of health problems or illness is higher.

How much health insurance I should opt for?
Looking at the present medical cost one should take minimum sum assured of Rs 3 lakhs (individually).

What coverage is available under health insurance plan?
A health insurance plan typically cover the hospitalisation expenses for treatment of disease and accident (minimum 24hrs of hospitalisation required) and pre and post hospitalisation expenses to the extent of the sum assured, depending on the policy you take.

Hospitalisation expenses include room rent, medicine expenses, specialist fees (surgeon, anesthetist, etc), diagnostic expenses and other medical expenses related to treatment.

Expenses that are usually not covered in your insurance policy are registration charges, service charges/nursing care chares, and personal expenses such as telephone, refreshment etc., taxes levied by government and other expenses not related to treatment.

Conditions arising from diseases existing before the purchase of the policy are also not covered in the policy. These “preexisting” diseases are covered usually after 4-5 years of the policy being in force, depending on the policy terms & conditions.

Is there any tax benefit that I can avail of while buying a health insurance plan?
As per section 80D of Income Tax Act, you can claim annual deduction on premium paid for self, spouse and dependent children up to Rs 15,000 and if tax payer is a senior citizen then a deduction of up to Rs 20,000 is allowed.

If you are paying the medical insurance premium for your parents, an additional deduction of Rs. 15,000 per year can be claimed under section 80D. If your parents are senior citizens, you can claim an additional amount of Rs. 20,000.

How do you claim the money?
The sum assured can be used at one go or through multiple claims in a year. There are two ways of claiming the insurance:

1. Reimbursement: When you undergone the treatment, you bear the costs and then file a claim to the insurance company, who then reimburses the medical costs paid by you, to the extent of the sum assured as per the policy’s terms and conditions.

2. Cashless settlement: When the treatment is sought in a hospital that is associated with the insurance provider, the insurance company settles the bill directly. In this case you don’t have to pay the cost of treatment from your pocket.

Is a medical check-up necessary before buying a policy?
A medical check-up is necessary for a new health insurance policy for customers above the age of 40 or 45 years, depending on the health insurer’s norms. Medical checkups are usually not needed for renewal of policies.

How to fund your hospital bills

 MEDICAL supplies and treatment cost big bucks today.

In an age where lifestyle diseases or conditions like diabetes, heart attacks and cancer are common, it pays to be financially prepared.

We give you the lowdown on two medical policies: the features, the damages and the fine print.

Mediclaim policy

1. In addition to your actual hospitalisation and treatment expenses, this covers pre and post hospitalisation expenses. These include room rent, operation theatre charges, doctors’ fees, tests, medicines, expenses of a home nurse or physio etc, as per the terms of the policy.

2. It covers expenses incurred to cure your ailment.

Critical illness cover

1. Say, you have a attack, you will have to skip work, which means you lose your salary. A critical illness rider would cover this loss of income.

2. The entire sum assured is paid to you as soon as certain ‘pre-specified’ diseases or conditions like heart attacks, cancer, diabetes, stroke, organ transplant, etc, are diagnosed. You don’t have to worry about submitting proof of expenses incurred or to be incurred.

Do I need both policies?
Yes, because both policies benefit different circumstances. Merely having a critical illness policy is not enough as it covers only a few diseases.

What if you suffer from a disease, which is not covered? Here your mediclaim policy will come to the rescue. So, a separate mediclaim policy is a must.

When buying a critical illness policy
Buy it separately or buy a combo deal (a regular life insurance policy with a critical illness cover as an added accessory, also called rider).

It’s like either buying the complete car or buying one, and then fitting it with accessories. However, the combo comes with a few limitations:

1. The cover for a critical illness rider is limited by the basic life cover of the policy. The term of the rider is also the same as that of the basic cover.

2. The rider will be available for only one critical illness. That is, once a disease is diagnosed and the sum assured is paid to you, the rider is not applicable anymore. Besides, the life cover policy is also no longer available.

The last word: a standalone policy is a better option.

The damages: For a 30-year old, a critical illness rider of Rs 5 lakh for a 20-year term, would cost anything between Rs 1,500 and Rs 2,500 per annum.

When buying mediclaim

1. Some mediclaim policies offer both ‘cover + investment’.
But these have certain limitations such as a limited number of hospitalisation days, high costs, provision for only defined benefits and not full reimbursement, etc. A regular mediclaim policy without the investment option works better.
2. If you decide to opt for a plan ‘only cover’ mediclaim policy, a floater policy covering all family members under a single cover, works out cheaper.

But there’s a risk factor: if more than one or two members fall ill within the same policy period, the cover may not be adequate enough to take care of all expenses. Think about this before you opt for a floater policy.

Once you have chosen the right policy for you, read the fine print — especially what is excluded! Know and understand them, first, and avoid hassles later.

The damages: For a person up to the age of 35, the premium per annum for a cover of Rs 3 lakh would be between Rs 3,200 to Rs 3,800. All public sector companieslike Oriental Insurance, New India Assurance and National Insurance offer these policies. Among the private sector companies, Bajaj Allianz, Royal Sundaram, ICICI Lombard and Iffco Tokio, offer them.

The fine print: what is not covered

  1. 1. Pre-existing illnesses: For instance, if you have had a heart attack before buying the policy, the policy will not cover heart ailments.
  2. 2. Dental treatment and surgeries.
  3. 3. Cosmetic surgeries for aesthetic purpose.
  4. 4. HIV-related conditions.

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