For A Healthier Today And Tomorrow
With health insurance in your pocket, you can avoid a major financial set back, and you can make a good start by having some of the basic products in your kitty
These days, with a fitness-measuring device recording daily physical activities such as walking and the number of steps taken, you could save a bundle in health insurance costs. Recently, health insurance companies have been providing additional benefits to individuals who focus on wellbeing and health. One of the key benefits of such programmes is that individuals secure reward points for various activities, and obtain reduced health insurance premiums.
Sandeep Patel, MD & CEO, Cigna TTK Health Insurance, says, “Consider two individuals residing at similar locations. One is lethargic with poor eating habits. The other is active with regular exercising and better dietary habits. For health insurance companies, the latter poses a lower risk. So such companies offer lower premiums based on daily assessment of fitness progress.”
In a country with woefully inadequate health insurance, wellness incentives are looked at as a means to increase health-insurance coverage. For group and corporate policies, many new programmes are being offered to individuals: doctors on call, basic health check-ups, health advisors and vaccination programmes.
Health insurance companies are also providing consultation facilities for depression, particularly in highly stressful jobs. Says Amitabh Jain, Head, Health and Motor Insurance, ICICI Lombard General Insurance: “We are building an approach and culture which ensures that people take charge of their health and actively contribute to lowering their premiums. But the larger objective is that people live healthier lifestyles.”
While insurance companies promote good and healthy living, health insurance in India has barely penetrated the population. Statistics show that only about two per cent of healthcare expenditure is covered by health insurance. That means that the bulk of healthcare costs are funded by individuals themselves, even when health coverage is widely and easily available.
At present, 28 companies offer health insurance, five exclusively. Besides, wellness programmes are now being offered in companies and workplaces for employees so that a tab can be kept on their health.
Healthy lifestyle pays
What’s more, in August 2016 regulators introduced clauses rendering it easier for companies to come out with innovative products in health insurance. At present, very little innovation is seen. Some of these products do not address the needs of individuals.
For example, products largely cover hospitalisation costs; not many cover the cost of drugs, or of other general ailments that require care but are generally not covered by insurance firms. The new norms allow for a comprehensive health-care solution for individuals.
In coming months, the process of choosing health insurance will become more consultative. Today, products are primarily pushed and most people don’t fully grasp what they are buying. For example, enough data is available to allow a person to understand what level of coverage one might need.
If you are living in Mumbai rather than in Pune, such ailment costs would differ. If you reside in a smaller town, your healthcare costs will be lower. Health insurance can now, with the use of technology, show the appropriate coverage and policies that an individual requires according to their issues or conditions.
In coming months, need-based products will become more widely prevalent; There might be a very comprehensive product for diabetes suitable to an individual with a particular need. Besides, individuals are likely to see much innovation around early-entry products. For example, health insurance companies could offer you lower premiums as you age had you joined their health insurance programmes early enough.
However, seniors can opt for co-opted products. Here, a part of the medical cost is borne by the individual, the rest by health-insurance companies.
Individuals should also distinguish between indemnity and benefit-based policies. For example, a policy with indemnity benefits will reimburse expenditure incurred by you in a hospital, and on medication. A benefit-based policy, however, will give you the lump sum that you have been insured for to meet your day-to-day living expenses.
Says Shreeraj Deshpande, head, Health Insurance, Future Generali India Insurance: “The benefit policies are helpful in the case of critical illnesses, while the indemnity policies are good for other ailments.”
A typical Mediclaim policy is an indemnity policy. Whereas a benefit policy effectively pays the entire sum assured once you are diagnosed with the condition. For example, if a policy covers a major critical illness, then a lump sum payment is made to you for that. It is basically designed to support you to get through that condition.
From a financial planning perspective, purchase a Mediclaim policy for hospitalisation care, covering hospital bills. For example, if you are living in Delhi, a typical Rs 10-lakh Mediclaim policy ensures you have adequate cover if you are hospitalised for any reason.
With a history of critical illness in a family, one may buy a policy for a particular sum insured that might help meet liabilities and expenses. When you are hit with a critical illness, you may be out of work for quite some time. Hence, you may need to replace your salary for that period, and may incur additional expenses. “Based on what your additional expenses could amount to, you should buy a benefit-based policy, or a critical-illness policy,” Patel says, adding: “Effectively, the hospitalisation would be covered by your Mediclaim policy, and you would get Rs 15 lakh that would ensure your living expenses are taken care of.”
With the myriad products available (and those likely to be developed), a comprehensive check-up of the insurance policies you hold could also come in handy. If you know the areas that your existing policies cover, you could pick and choose among other health insurance policies available depending on your lifestyle.
One of the things that has emerged is that health-insurance companies can focus on providing fresh solutions that can be done on an indemnity basis, whereas others such as life-insurance companies can provide health insurance for a longer term, on a benefit basis.
Scanning the fine print
One of the issues about medical policies is that they come with a lot of fine print. One of the bones of contention is room costs. Here you could find yourself footing part of the bill if the hospital stay is in a high-end room, while your policy has a cap on the room charges. In hospitals, the consultation and operation theatre fees are usually in proportion to room charges. So when you opt for a high-end room, you have to foot the additional costs if your policy sports a room rent cap.
Besides, keep an eye out for sub-limits. For instance, basic procedures like a cataract operation would be reimbursed at a fixed sum, irrespective of the hospital where you are treated, or the doctor. Similarly, policy takers have to scrutinise the fine print regarding the kind of hospital covered.
Hence, experts point out that it’s better to comb through the fine print, then opt for additional covers depending on what is not offered in your plan. For instance, many companies now allow you to top up your base policy with an additional one in case of critical or major illnesses, which comes at lower costs and also helps foot medical bills.
Additionally, companies are offering premium payment facilities in installments. However, installments toward health insurance attract a financing charge, which varies. Says Deshpande: “Instead of paying a huge sum a year, some policies allow for premium payments in instalments. If a claim is made, unpaid instalments are adjusted.”
So, depending on how you are placed with regard to your finances, take one of the basic health-cover plans, examine the fine print, then avail of additional top-ups and critical-illness plans depending on your family history. With health insurance in your pocket, you can avoid a major financial set back, and you can make a good start by having some of the basic products in your kitty.
TYPICAL POLICY INCLUSIONS AND COVERS
Hospitalisation: Expenses pertaining to hospitalisation such as boarding and nursing, and intensive-care expenses, including fees for hospital consultation, and other procedures.
Day-care surgery: Day-care procedures specified by the insurance company typically come under this.
Ayush treatment: Some insurance companies offer comprehensive AYUSH treatment; many others don’t cover such treatment.
Maternity Benefits: Reimbursement of medical expenses on delivery including a Ceasarean during hospitalistion. However, to avail of such benefits a waiting period is applicable.
Wellness programmes: Wellness programs to reward individuals are being encouraged by health insurance companies, enabling buyers to reduce health-insurance costs.
Waiting period: Typical policies have a waiting period of 30 days
Health check-up benefits: Some policies offer health check-ups that can be availed of every year or every few years. Usually, the costs are capped.
Global healthcare benefits: Some policies also offer overseas healthcare benefits for treatment abroad.
Policies may also have features that include cover for a new-born child and/or vaccination costs.
HOW TO BUY MEDICAL INSURANCE
- Covered under group insurance: If you have a group insurance, you could take a top-up policy depending on where you reside.
- Family-floater policy: Take a family-floater policy if you want to cover all family members. This helps reduce premium costs against going in for individual medical covers for each family member.
- Critical-illness policy: With a family history of a critical illness, you may want to take an additional policy to cover such illnesses.
- Specific covers: Medical covers are also available for specific conditions such as diabetes, etc. You could avail of these if you feel the need, again based on family history or your requirements.
- Premium charges: Typically, premiums vary among insurance companies depending on what is included, or excluded, from the policies. A policy with the maximum of inclusions will attract higher premiums.
- Multiple covers: Buy policies that cover different ailments as these vary among insurance companies. Typically, understanding your needs and issues would help in assessing the kind of policies that would cover most of your conditions.