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Health Insurance is for Healthy people.
Unfortunately, this is true!

This is why we see Insurance companies avoiding to offer Health Insurance Policies to people who’ve crossed a certain age (usually above 45 yrs., when the metabolism rate of a person slows down). Even if they give, they apply a lot of conditions or sub-limits, and it comes with huge premiums. The Morbidity rate further explains the reason behind this. Morbidity ratio is the likelihood of 1 person falling sick out of every 100 people. As per the insurers’ statistics, the morbidity rate for people under 45yrs of age is usually 3-5%. Whereas the morbidity rate for people more than 45yrs of age can be as high as 10-15%. This is the reason why insurance companies avoid covering people falling under the higher age group.

Most of us have our parents covered under our organisation’s group policies, hence we usually don’t consider taking a separate personal (retail) Health insurance policy for parents. However, it is being seen that most organisations today have started restricting the coverages for parents, even in cases where the premium is being collected from the employees. This is because of the high claims ratio that the organisations end up with. Some of the organisations have gone to the extent of discontinuing coverage for employees’ parents.

Even if your current employer covers your parents in the policy, imagine, tomorrow, if you join a new organisation which does not offer coverage for your parents, it is then, when you’ll actually realize how difficult it is to get coverage for your parents.

Unfortunately, the employers who give coverage for parents, usually give it only in the range of 2-5 lacs sum-insured. But to manage our parent’s health expenses, this we know is just not enough. It might be enough to cover minor illnesses like flu, dengue etc., but definitely not enough to cover major illnesses like Cancer, heart ailments, joint replacements etc.,

But do not despair, to equip you with all the help you need to get the best policy and coverage for your parents, we’ve created this very simple and comprehensive guide.

This guide will not only help you in deciding which policy to opt for but it also lets you know the right coverage to look for, the conditions to avoid in a policy, and more…

Why should I consider having a Retail Health Insurance policy for my Parents?

  • In a retail health insurance policy, even if you claim, the policy premium does not increase during the renewal.
  • The insurance company cannot refuse you renewal even if you raise claims, every year.
  • The policy can be renewed for lifetime, irrespective of the current age of parent.
  • After a certain waiting period, the pre-existing disease also gets included in the policy.

 

How much Sum-Insured should I choose?

Not less than 50 lacs!

You need to keep two things in mind while choosing your sum-insured.

  • The rate of increase in the Healthcare cost, every year. This is generally very high, not like the normal rate of inflation.
  • Occurrence of new diseases like Covid-19, Dengue, Swine flu, Ebola, Chikungunya etc every year is very rampant. Cancer is also spreading its wings and so is the cost of its treatment, which is growing exponentially too.
  • The new technological advancements in Healthcare such as Stem-cell, Robotics are very effective but unfortunately come at a very high cost.

So, in the given scenario, the ideal sum-insured is 50 lacs, however 50 lacs sum-insured will cost you a lot. If your budget permits, its ideal to opt for it. But if your budget doesn’t permit that kind of cover, then going for a super top up policy will work best for you.

Super top-up health insurance policies are those policies which covers only high claims at a much lesser premium. For the smaller claims, you can get them covered from your pocket or from your employer’s group policy, as applicable.

 

What is the Room Rent Clause?

This is the most disputable clause.

In a policy the Room rent should cover the cost of a standard private room.
In case the room rent has any sub-limits and is not sufficient to cover the standard private room rent per day, the final bill will be reduced in proportion to the difference in the eligible and actual room rent.

 

What if my parents are already taking some treatment or are suffering from some pre-existing health condition?

Any disease or condition which exists prior to taking the first policy with Insurance company is called a pre-Existing disease.

No Insurance Company covers the pre-existing diseases from day 1.

All the pre-existing diseases “ Whether it is known or not known” gets covered after a certain waiting period only like 24,36 or 48 months. The waiting period varies depending on the insurer.
We should declare (If we are aware) all the existing conditions, Symptoms, Disease or treatment taken in the last 48 months in the proposal form at the time of taking the policy.

The Insurance Company will then decide whether to give the Health Insurance cover or not depending on the following factors

  • Whether the existing disease is cured or not.
  • Whether it can occur again later.
  • Whether it can lead to further ailments whether same or different.

The Insurance underwriter, sometimes, decides to accept the proposal, by loading certain additional premium. When you don’t declare the pre-existing diseases, and raise a claim against them, In this scenario if the insurance company finds out that the insured did not declare the disease even though he/she was aware of it, then the insurance company can reject the claim and cancel the policy without even refunding the premium you paid. They can do so under the clause “Mis-Representation of fact”. So always ensure to declare the pre-existing conditions or diseases.

In case your parents are completely health and have no pre-existing diseases exists, then you may not worry about which company is providing a shorter waiting period for coverage, before buying the policy. Any new ailments that occur for the first time will be covered after 1st month of the policy inception.

Nowadays, specific policies are also being issued by insurers for certain pre-existing conditions like diabetes, cancer, cardiac, obesity etc. In these policies, the coverage is designed as per the insured’s health condition. However, there is a waiting period in these policies too, but it’s just for 12 months.

 

What is Co-Payment or Deductibles Under the Health Insurance Policy?

In simple terms, if your policy has a co-payment of 20%, it means that 20% of the admissible claim is supposed to be paid by insured himself from his pocket, and the rest 80% is paid by the insurer. For example, If Co-payment is 20%, then the claim amount payable by the insured is 20% and rest 80% will be paid by the insurer.

Deductible, however, is a little different. It specifies the amount up to which the insured is supposed to pay the claim from his/her pocket. And only the amount above the deductible, is to be paid by the Insurer. For example, If deductible is Rs. 25000, and the claim is around Rs.100000, then the amount paid by the insurer is 75000 only. If the Claim amount is less than the deductible, then no claim is payable by the insurer.

Please note that both co-payment and deductible are applied on the final claim (admissible claim) amount and not on the reported claim amount.

If you already have insurance as a part of group Mediclaim from your employer, with a co-pay, you can take individual policy with a co-pay option to cover the uncovered part of your group Mediclaim policy.

 

Why should I buy a Health Insurance Policy from an Insurance Broker?

You can buy a Health Insurance Policy either from a Broker, Agent, Directly from the Insurance company, or from a web aggregator insurance website.

However, there are many advantages of buying a policy from an Insurance Broker. An Insurance broker is bound by the Insurance Regulator to perform as per the terms laid to them. They need to protect the interest of the client (you) at every step of insurance, be it in buying the policy or in claims assistance. They represent the client and stand for them in front of the Insurer, and not the other way around. This is why they are the only legal entities who are not tied with any particular Insurance company. They can deal with any Insurance company, in the best interest of their client.

They also have the advantage of working with many clients with varied requirements, this helps them in knowing the best practices, and hence they can help you set up the best insurance policy for your organisation with ease, saving your time and effort.

 

Can I shift the policy from my Group to Retail under portability?

Yes, IRDAI is now allowing porting of the policy from group to retail under the same insurance company. This means that if you are already covered in the group for three years, the new retail policy will waive off waiting periods up to three years. However, this can be opted only when you resigned from the company or when the group policy is not being renewed.

 

Does Alternate Medicine Treatments like Ayurveda gets covered under Health Insurance Policy?

Initially only allopathic treatments were covered under health insurance. However, in the year 2012, a circular was issued from IRDA, allowing inclusion of Ayush treatments also in health insurance coverage. Currently there are more than 15 insurers providing health insurance cover for Ayush treatment either as an additional rider or as an inbuilt cover.

As government is putting lot of efforts in promoting these treatments, it is wise to get it covered under your policy.

As per IRDA, “AYUSH Treatment” refers to the medical and / or hospitalization treatments given under ‘Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy systems. The IRDA Definition is simple enough to understand.

Impact: Although IRDA has granted permission to cover non-allopathic treatments, there are certain limitations, please note the following

  • The treatment has to be done in a Government Hospital, or in any Institute recognized by the Government and/or accredited by Quality Council of India or National Accreditation Board on Health. There are more than 3600 such hospitals / institutes available all over India.
  • Cashless facilities are not available under such treatments.
  • Most of the insurers are applying a capping or sub-limit for such treatments.

 

What Is Restore Benefit in Health Insurance?

If the sum-insured is exhausted during a claim, then the sum-insured is restored to full amount and can be used for future claims within the policy year. This should however not be related to the same ailment for which the first claim was made.

There are 2 drawbacks of this feature.

  • If the sum-insured is not sufficient to pay the first claim itself, restored sum insured is not useful.
  • If Sum-Insured is utilized below 95% of the total amount, most of the insurers will not restore it. In this case the insured is again left without adequate. Hence it is good to go for a top-up (Super Top-up) policy instead of having this option as a rider (optional benefit upon payment of premium) to avoid these limitations.

 

What Is No Claim Bonus or Cumulative Bonus in Health Insurance?

As the name suggests, No-Claim bonus is the benefit which an insured receives upon making no claims in previous policy year.

Now the question is how is this benefit provided to the insured in health insurance?

The overall Sum-Insured will be increased every year without any additional premium. This benefit continues for every claim-free year till the Sum-Insured is doubled. Hence this is also called cumulative bonus. The no-claims bonus helps us tackle medical inflation. This is a standard benefit provided by all insurers today. But the percentage varies from one insurer to another. Some insurers provide 10% and some 20% for every claim-free year. Upon making a claim, some insurers also decrease the Sum-Insured by similar percentage (or all at once) to the earned cumulative Sum-Insured till date.

Nowadays some insurers are providing an optional cover for No-Claim Bonus. The different terms being used for No-claim Bonus by insurers are Super NCB, Multiplier benefit etc.

If you’ve planned for a Super top-up policy as well, then you need not worry about the percentage of Sum-Insured being offered as NCB. 10% of NCB is provided for sure by every insurer for every claim free year. And interestingly, NCB is also a part of Super top-up policy plans. Hence instead of paying for optional cumulative bonus rider it’s always advisable to take a super top-up policy rather than trying to enhance this tentative coverage which would exhaust after a single claim.

 

What are Pre and Post Hospitalization Expenses?

Any Outpatient costs towards Doctor Consultations, medicines, Health tests, taken before or after the actual Hospitalisation, gets covered under Pre-Post Hospitalisation cover. However, to be covered, the outpatient expenses should pertain to the same treatment for which the main medical claim has been accepted.

The Insurance companies put a cap on these expenses, usually expenses incurred within 30/60 days are considered for pre and post hospitalisation cover, respectively.

For some expenses like domiciliary, maternity and organ donor, the pre and post hospitalisation cover is not applicable.

Some insurance companies have started putting additional caps like 1% of Sum-insured on these expenses. Some have also started disallowing physiotherapy expenses under pre and post hospitalisation.

 

When will the Claim be triggered?

Claim is admissible only when the Insured gets admitted in a hospital for a minimum period of 24 hours.

Today, with the advancement in Science & Technology, there are certain surgeries which require less than 24 hours of hospitalization. Such surgeries take around 2 hours and are expensive. In such instances there needs to be a relaxation in the “compulsory 24 hours hospitalization clause” to include such expenses. This clause also resulted in Moral Hazard as the insured and the hospital with mutual understanding were extending hospitalization period to 24 hours, either in real time or just on papers, to get the coverage.

The good news is that today Insurers have listed many such treatments under the head “Day care procedures” where they offer medical coverage even if there is no 24 hours of minimum hospitalisation. If you are undergoing any day-care procedure that is not included in insurer’s list, you can request them to include it, and take approval before going for admission. Ensure not to get confused between day-care procedures and outpatient treatments. No Insurance company pays for the stand-alone Outpatient treatments like POP, bone Fracture, stitches with local anaesthesia, doctor consultations, health tests etc., There are more than 580 Day-Care procedures. The list of Day-Care procedures being covered differs from one insurer to another.

Only Hospital admission doesn’t entail coverage, there should also be an inline treatment. For example, A person gets chest pain and he/she goes for emergency hospitalisation assuming that it might be a heart attack. However, If the doctors, after performing series of health checks, find that the pain was due to minor gastric problem and not due to heart problem, Then the claim made by that person for the admission and health tests will get rejected as there was no inline treatment given. But in case the doctors find some serious issue with the health of the person admitted, and gives the person some treatment, then the hospitalisation bill, and the bills for health tests and medicines get covered.

During certain cases in which the patient’s condition is not such that he can be moved to the Hospital, the Insurers agree to consider the claim and reimburse the expenses under the Domiciliary hospitalisation cover. However prior approval from the insurer is mandatory to claim such expenses.

 

What is 1/2/3 years waiting periods?

For certain standard ailments like Cataract, Hernia, Hydrocele, Fistulae, Hysterectomy and others specified in the policy, a waiting period of 1/2/3 year is applicable, as specified in the policy.

 

Can I claim deductions under Section 80D clause of Income tax?

Yes, you are eligible for a deduction of INR 25000 for a premium paid on health for yourself, and your spouse and children. If you have paid the health insurance premium for your parents also (Senior Citizen), then, you will also be entitled to an additional deduction of Rs. 30000/-. You also get Tax benefit if the premium is paid by you by any mode of payment, other than cash.

 

To Reach Us:
Please call or WhatsApp on this number – 7670800133

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At Ethika, we understand that Insurance Broking is about ensuring the best interest of our customers and establishing trust. Our team has diverse experience and strong expertise which enables us to understand your business needs and your risks well. Our experts are highly innovative and they deploy the latest technology tools to bring Speed, Effectiveness and Utmost Responsiveness to your doorstep.

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Hyderabad. 500032

040 – 48599353

info@ethika.co.in
support@ethika.co.in

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+ 91 84980 94603

Workafella Business Centre,  150, 1, Infantry Rd, Opp. Commissioner Office, Vasanth Nagar, Bengaluru, Karnataka 560001

Ethika Insurance Broking Pvt. Ltd. IRDAI Certificate No: 574, Date of License: 8th Aug 2019, License valid till 7th Aug 2022,
Registered Address: 517, B Block, Vijaya Raghwa Township, Nallagandla Bypass Road, Lingampally. 500019
Principal Officer: Susheel Agarwal, Contact Details of Principal Officer: susheel@ethika.co.in +91 8498094600,
Directors: Susheel Agarwal and Suresh Agarwal, Category of License: Direct (Life and General).

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