There are more restrictions on policies from life insurers as compared to a mediclaim.
Need to visit a hospital for a minor surgery? Given the rising healthcare costs, it could set you back by at least Rs 20,000. For anything serious, be ready to pay in lakhs.
Though most of us agree that a health policy is a necessity, picking the right one remains tricky. Especially with life insurers offering medical policies like traditional mediclaim policies of general insurers.
The sales pitch: Traditional mediclaims, being indemnity plans, cover hospitalisation-related expenses for an ailment. Health polices from life insurers pay the entire sum assured as soon as an illness is diagnosed. That would mean the latter is better. But here’s some fine print.
Limited coverage: A mediclaim policy is an indemnity-based plan that settles claims, either on a cashless basis or by reimbursing bills. Life insurers have similar plans where hospital cash benefit (HCBs) is offered. Additionally, some companies also offer surgery benefits. But the benefits are defined and fixed components come into play.
There are more limits -- on both per day amount and the number of days one can avail that amount. Depending on the insurer, the amount could be between Rs 1,000 and 5,000 per day.
Such restrictions may not always work in favour of the customer. If you were to get paid Rs 25,000 for a surgery, you will get it. If the actual expenses were Rs 40,000, then the extra Rs 15,000 will have to be borne by you.
According to Mahavir Chopra, head, e-business and retail, medimanage.com, “If one were to only opt for hospital cash policies, not getting covered for the entire amount is the risk taken.”
Exclusions: HCBs permanently exclude pre-existing ailments. But a general insurer will cover pre-existing diseases after four years of continuous cover.
“Life insurance policies usually have a longer cooling period of 90 days from the effective date of the policy. So, even those ailments mentioned in their policy documents, will not be covered if diagnosed within this period,” says Shreeraj Deshpande, head–health insurance, Future Generali Insurance.
However, both mediclaim and HCBs cover hospitalisation due to accidents within the first 30 days of buying the policy.
Premiums: Typically, premiums are marginally cheaper than a mediclaim. But if one opts for a surgery benefit product, the premium rates rise substantially. For instance, if a person aged 32 buys New India Assurance's family floater policy for a sum insured of Rs 2 lakh, he pays Rs 5,725. He would be paying Rs 5,365 for Tata AIG's Wellsurance family-classic, a standard HCB. His premium would rise to Rs 13,794 for an additional surgery benefit of Rs 50,000 from Aegon Health Insurance.
If the same person underwent an angioplasty and hospitalisation that costs Rs 1.75 lakh, his standard HCB would pay him the least. With a fixed payout of Rs 2,000 per day, he would get only Rs 6,000. Had he opted for the surgery benefit, too, he would get Rs 6,000, plus the Rs 50,000 for surgery benefit.
Indemnity-based products that cover the entire hospitalisation expenses are a must, say insurance experts. Benefit-based products like HCBs could be bought as an add-on, as the lump sum amount can help cover additional expenses like loss of income, conveyance and so on, that one incurs during hospitalisation.
