All you should know about health insurance before buying

If you compare health Insurance plans on Insurance web aggregator (Like policybazaar), you will find almost same features in all of them. So, you might get confused & fall in trap of cheapest plan or suggested by agent without knowing complete policy wording. So, here I am summarizing all you should know about health insurance plan with emphasis on hidden Terms & Condition. 1) No Claim Bonus (NCB) / Multiplier Benefit This is the benefit Insurer gives to customer for not taking claim in single year. Unlike vehicle insurance policy where NCB benefit is in terms of discount in subsequent renewal, in health insurance majority of time NCB is in the form of increased in Sum Insured (SI) (Coverage limit of your health insurance). Points to Note: - Rate of increase in sum insured limit will differ in different plans of same insurer & also from 1 insurer to another. Faster the rate, better it will be. E.g. Apollo Munich (Now HDFC Ergo) optima restore plan gives NCB as 50% increase in SI - Max. cap of increase in SI. Higher is better. Some plan gives max. upto 50%, some gives upto 100% - Penalty for taking claim. Whenever you take claim in a year, your insurer will penalize you for it (Usually by reducing accrued NCB by same rate as of in increase). No penalty or low penalty is better. E.g. Max bupa doesn’t penalize for taking claim - Majority of PSU insurer (National, united etc.) don’t provide this feature. - Best thing about NCB is, Increased in SI has no extra terms & condition & it is equivalent to your base plan with higher coverage. So your policy should have this benefit. 2) Restoration benefit / Refill benefit Agents sell policy saying total 10 lac coverage (5 Lac base SI + 5 lac restoration). Restoration benefit means once your SI (+ NCB, if any) get exhausted insurer will refill same amount as base SI (like 5 lac) once in a year. All hidden Terms & condition lies here. So, read policy wordings & don’t rely on agent. Like, - Some insurer has T&C that - Restoration can’t be used in same person with same disease (Not even complication of same disease) E.g. – Max Bupa E.g. Person detected with cancer & total bill (In single claim or multiple claim – like in chemotherapy cycle) goes above 5 lac, still he can’t get restoration benefit. - Can be used in same person, same disease but with gap of minimum 45 days - Single claim in policy year can’t exceed basic SI + NCB (Indirectly saying restoration can’t be used in single claim however it can be used in subsequent claim with gap of 45 days) – E.g. Apollo Munich My take is, don’t fall in trap of this benefit. If they are giving it at no additional cost, go for it. Because you can use it for other family members. 3) Co-pay Co-pay is the amount in percentage you have to pay out of your pocket for every claim. Usually co-pay plan is offered at reduced rate compare to normal plan to attract people. But never go for any plan, which has co-pay. Beware: Some insurer have same base plan but if you opt for discount, they will convert it to Co-pay plan. E.g. Religare. Religare offers 15% discount to customer who opt for co-pay feature under their Religare care plan. Some of agents, Including policybazaar (Which will always try to sell Religare plan) try to attract customers by saying we will offer 15% additional discount without telling about this Co-pay. (I myself fall in trap of policybazaar, thank god I was saved my research. I do complaint against them on twitter too) 4) Zone/Geography base charges This might find unusual but many companies levi Co-pay charges if you change your Zone for treatment. Like if you have taken policy in Agra & if u want to hospitalized in Delhi, then you have to co-pay 20% amount. E.g. Hdfc Ergo policy In few insurer, it is optional to choose zone wise charges. Don’t fall in trap of it to save few bucks. Because agent might give you Zone B policy at lower rate & you might end up paying 20% co-pay for taking treatment in Zone A. Choose Insurer which don’t have such geographical/Zonal restrictions. 5) Life-long renewal without Co-pay Some insurer put additional co-pay terms for renewal after age of 60/65 years. Avoid such plans. 6) Sub Limit or Capping Many policy have sub limits on Room rent, ICU charges, capping on cataract, Knee replacement surgery etc. If ur bill goes beyond these permissible limit, they will deduct all charges on pro-rata basis & not alone room charges (Like doctor consultation, laboratory charges, OT charges, procedure charges etc.) Also keep in mind that these sum limit of Room rent includes – Room charges, nursing charges, injection charges, Ventilator charges (if used in ICU) etc. So better to choose plan which don’t have sub limits or capping. 7) Pre/post Hospitalization Higher number of days coverage, better it is. Like Apollo optima restore gives 60 & 180 days pre/post benefit compare to others who usually gives 30 & 60 days respectively. 8) Free health check-up Don’t get lure with this free benefit. This freebie shouldn’t be prime deciding factor while taking plan. If this benefit is there it is better. 9) AYUSH Benefit If you want to get treatment for Ayurvedic/Homeopathy etc. check Aysuh benefit. Some insurer provide Aysuh benefit for full SI E.g. Max Some insurer provide Aysuh benefit with some capping like max. 20k/50K E.g. Religare Some insurer don’t provide Aysuh benefit E.g. Apollo Imp Point: This benefit is only available for hospitalization in Government AYUSH hospitals or NABH accredited private hospitals. Only few private AYUSH hospitals take NABH. 10) Stay healthy Discount Very nice initiative by some insurers (like Apollo, Hdfc etc.). If you stay healthy they will provide you additional discount at renewal. For which you have to download app/wear digital watch & they will calculate daily walking steps & give discount slab wise with max. 8-10%. Those who are already doing such exercise daily, will get this discount & for others this discount will lure to be healthy. 11) Waiting period for Pre-existing disease Pre-existing diseases are covered after 3-4 years (Max, Apollo 3 years, Star 4 years). Shorter the duration better it is. While for slow growing diseases waiting period is usually 2 years. 12) TPA (Third Party Administration) Many general insurance companies (like National, United etc.) don’t have their own medical team to verify claim details & they rely on TPA for claim settlement. So, customer has to deal with TPA first for claim & then TPA approved amount released by Insurer. While some other insurer (like Apollo, Hdfc, Religare, Max etc.) have their in-house settlement team & don’t have TPA, which fasten the process of claim & refund. Go for companies without TPA 13) Daily Cash benefit Over & above your actual claim amount, some insurer gives daily cash benefit for miscellaneous expenses but with lots of T & C like - Admission should be in network hospital, Minimum stay 48 hrs., Room should be twin sharing room etc. & upper cap is also there, Not valid for ICU admission - However if this benefit is there at no extra cost, its good. 14) Exclusion There are some common exclusion in each policy, which many are not aware. - Admission, discharge, record section, RMO, Administrative, registration, service charge etc. (Many corporate hospital levy Administrative service charge at whopping 15% of total bill amount excluding medicines & these charges are straight away rejected in claim - Cosmetic surgery - Experimental, unproven treatment - Hospitalization just for investigation or diagnosis - Circumcision - War like situation, Terrorism, Hazardous activity – like Scuba diving etc. - Dental / Eye treatment like Laser - HIV, STDs - Alcohol, substance abuse - Assisted Reproduction (IUI, IVF etc.), birth control related procedures - Obesity & its complication (Keep this thing in mind, anywhere during admission if doctor writes your diagnosis as Obesity – case gone. Your claim will be rejected) - Maternity (Some plans do offer this benefit but has long waiting period of 3 years), infertility, birth control treatment etc. - Non-medical expense (like cotton, loose gloves etc.) - Apart from this common list, many insurer have added some more exclusions (E.g. Some Specific medicines are excluded) & some black listed hospitals. Do check for it in policy wordings or I have highlighted such comapny specific unique exclusion in my google spread sheet, u can go through it. Apart from these following are excluded in majority policy (Except Apollo has recently added it in inclusion list) - Neurological diseases like Parkinson’s, Alzheimer’s disease etc. - Stem cell transplant - Robotic surgery, LASER, Light treatment (Remember if you are living in metro cities then some of sophisticated hospitals do have Da vinci Robot & they use it frequently – but your insurance won’t cover it) 15) Availability of Insurer / TPA office in your city - In case of reimbursement availability of Insurer nearby to you will be helpful for documentation & if any query arises. 16) Network hospital list - Don’t just check number of hospitals. It will be more or less same in each insurer. But most important thing is to check whether these hospitals are well-known & according to your preference or not. 17) Individual Vs. Family Floater If you take Individual health insurance for each family member, it will be costly affair compare to taking Family floater. Suppose three are 3 persons in Family (2 Adult & 1 Child) looking for Sum Insured of 5 lac. Simple reason to understand cost difference is because in Individual policy Insurer is liable to pay max. up to 15 lacs (If all 3 gets sick & put claim), while in family floater Max. liability is only 5 Lacs. However, as per my opinion there is rare possibility (Unless in accident) that all of the family members need it at a time. So, better to go with family floater plan with higher Sum Insured at same rate as compare to Individual plan. In family floater plan children are allowed only till they reach 21 year of age (E.g. Max) or 25 year of age (e.g. Apollo, HDFC). 18) Pricing Majority insurer increases price of premium in the slab of every 5 year. Like for age 31-35 premium remains same then increases at 36 age which remains same till 40 years. However Max is following increase in premium every year by 100-200 rs., unlike sudden rise of premium with age slab changes. So do check it. 19) Top-up / Super Top-up plan Rather than going for higher Sum insured in base policy, one should go with super top-up policy if person feels that Base policy is inadequate. Because these policies are cheap. Again all hidden T&C are there in these plans. So read carefully before buying it. Top-up policy – As the name suggests, it is top-up to your existing policy. Lets understand terminology first. Deductible Amount – It is the minimum amount one has to pay (Either through base policy or through their own) to get triggered top-up policy. Sum Insured – In top-up policy sum insured includes base sum insured also. E.g. Your base policy is 5 lac. You have taken top-up policy of 10 lacs. Deductible amount will be 5 lacs Sum Insured – 10 lacs Actual coverage in your top-up policy – 5 lacs (10 lacs- 5 lacs base policy) Now Important T&C in Top-up policy is you have to pay deductible amount during each claim separately to get triggered Top-up policy. E.g. You have taken 5 lac base + 10 lac Top-up policy (Here Actual coverage in top-up is 5 lac) Case 1: You get accident & your bill goes to 7 lac. Here, in single admission you have used deductible amount (Of 5 lacs), your top-up policy will get triggered & remaining 2 lacs will get paid from top-up plan. Case 2: You get dengue & bill of 4 lac has been settled from base policy. Now you have 1 lac remaining in base policy + 5 lac top-up. After few months you get accident & bill becomes 3 lac. In this case your top-up policy will not get triggered. Because as per T&C bill should be more than deductible amount (here 5 Lac) in single admission to get triggered top-up policy. Difference between Top-up & super top-up policy is that in super top-up policy they calculate deductible amount cumulatively. So, in above case 2, super top-up policy will pay remaining 2 lacs but not top-up policy. Super-top up policy is somewhat costly compare to top-up. But always buy Super-top & not Top-up policy. For easy comparison of all features of different company’s plan at one place, I have made Google Spread Sheet. This sheet will help everyone to compare & decide best policy for them. Those dimers who want it can request it here or pm me. Also I am in the process of making another similar sheet for comparison of Top-up / Super-top plan & also for special need plan Like maternity, cancer, cardiac, senior citizen Etc. Disclaimer: I am doctor by profession but I have interest & knowledge in Finance. Prime purpose is to help people & prevent victim of mis-selling of insurance. If u have any query, ask it here or Pm me.