Health Cover

There are a few things people should keep in mind while deciding to buy a health cover. Overview of the industry to begin with, important changes are expected in the health insurance sector. It makes increasing sense to start buying health insurance at an early age, so that the insured can get the advantage of reasonable rates as he grows older. We are likely to see more standalone health insurance companies, which will bring in innovative products like disease management, health savings accounts, and long term care products.

Life insurance companies are now seriously looking at offering health insurance products that are different from what is offered by general insurance companies, like hospital benefit plans and policies that run for a period longer than one year.

General insurance companies, too, are making health insurance a priority given that they have to make each portfolio profitable after the market has been de-tariffed. So it looks like consumers are going to have many more choices. The important thing to keep in mind while buying any insurance cover is to make sure you read the fine print properly. The most commonly sold policy issued by public sector general insurance companies, Mediclaim, contains terms and conditions that you should be aware of before you put your money down. Given that health care costs are increasing at an estimated 22% annually, it makes sense to invest time in understanding how much cover is enough.

Typically, take a look at your income, the number of people in your family, and your family’s medical history before taking a call on how much cover to buy. If there is a history of diseases like cardiac problems, make sure you’re adequately covered for any eventualities.

There are numerous options available related to critical illness covers. Again, these are ideal (if expensive) if you have a family history of certain diseases, like cancer.

Critical illness covers are helpful for such diseases that are chronic in nature and that are not necessarily covered by plain vanilla products. In some cases, you can add critical illness cover to a vanilla cover. It’s common for most health insurance policies both Mediclaim and policies offered by private players to have built-in sub-limits. This means there will be restrictions on the amount you can spend on things, such as room rent in a hospital, surgeon’s fees, expenses for ambulance, and so on.

This is a fairly new thing, and it’s important to understand how it works. There are also sub-limits set for the treatment of certain conditions, like cataract operations. Co-payment Health insurance policies have also started including a co-payment clause. In effect, this will mean that you will have to shell out a certain percentage of the claim amount for certain kinds of diseases.

In some cases, the co-payment clause kicks in only after you cross a certain age, say 55. But the principle is the same.

Third party administrators: This is an important question, given the number of complaints with regard to claims processed through TPAs, or third party administrators, who manage claims.

Today, many companies offer customers the option of either dealing directly with the company, or choosing to go to a TPA. If you’re not convinced about the services of a third party administrator, you can choose the former.

Take the time to learn what kind of hospital network the insurance company has. Ask your agent what is the average number of days is for a claim to be settled. Also confirm what branch of the company your policy would be serviced from.

Read the policy document carefully to understand which diseases and charges the policy covers, and which ones it doesn’t. This information will save you much grief when it comes to claims. Also, understand that individual health insurance usually does not cover dental or maternity expenses. In this respect, it’s important to know what the policy says about pre-existing diseases.

A committee is working to develop standardized definitions of preexisting diseases and a standard acceptable period of exclusion, but these have yet to take shape. In the meantime, various companies have worked out a schedule which they follow. Pre-existing diseases are covered as per this schedule, in a time frame ranging from 12 months to 4 years.

It will become imperative that customers take the time to understand what they are buying as products get more complicated. For instance, we may soon see a health insurance product which is linked to equity markets. In this instance, the terms and conditions may be different than the current available policies.