Provisions that can reduce claim amount in Mediclaim

Mediclaim or Health Insurance is way of covering yourself and your family against any medical emergency arising out of any diseases or illness or accident. Not to have adequate health insurance cover is a very serious matter as serious illness could be catastrophic to your financial wellbeing therefore it is imperative you have adequate medical coverage along with life cover. But truly speaking how many of you are really serious when you plan to buy new health insurance plan?  The awareness to buy health insurance is increasing but do you devote reasonable time to research and compare the features of the plan before finalising the plan? Buying adequate and right health insurance is necessity of life.

I have received a call from one of my relative stating that all companies are fake and don’t pay the full claim amount when needed. He was paid Rs. 23,000 against the total hospital bill of around Rs. 36,000. I went to meet him and checked the policy document and explained him why he got lesser amount. I convinced him that company was right in paying the lesser amount and the fault was of his agent who did not make him aware of some of the provisions in the plan. The same applies to all of us as we come to know when actual need arises. It is important to now the provisions in advance which can reduce your claim amount.

It is very surprising to know that most of the people think that the plan of one company is similar to the plan of other company and decide buying a health plan only on the basis of the premium payable. This is not the correct way of buying health insurance. The most important thing before buying health plan is to know the features which can affect your claim amount. You have to do some home work on the same and know all the exclusions and restrictions on the claim before finalising the health plan. Buying health insurance plan without knowing the dangerous provisions can really hit you badly when the actual claim comes. The following are the two major clauses you must read carefully before signing the application form. The premium comparison should be the last criteria for selecting any health insurance plan.

1) Room Rent Sublimit:

This is the most dangerous provision in health insurance policy where the claim amount is decided on the basis of room rent you stayed in while hospitalised for some illness. The sublimit is per day and is fixed at percentage of sum assured. Mostly it is 1% of the sum assured. There is also upper cap of room rent around Rs. 3,000 to Rs. 5,000 per day depending on plan to plan. The room rent sublimit is the ceiling in the policy on room rent payable per day in which you are supposed to stay when you or any of your family members is hospitalised. As we all know hospitals have different types of rooms available like general ward, twin sharing room and single room. The charges of any illness is decided on the basis of room you opt even though there is no difference in treatment and medicines given and even the doctor is same. This simply means in case you stay in a room costing higher than sub-limit, all other hospital expenses will also be reduced proportionately by Insurance Company on the basis of what you would have incurred had you stayed in a room that costs below your room rent sublimit. In other words you are unlikely to get the full amount of claim even if the claim amount is well below actual sum assured.

2) Co-Payment:

There are some policies available in the market in which co-payments are required to be paid by policy holder. The co-pay ranges from 10% to 20% of the claim amount in normal polcies but in some senior citizen plan the %age is even 30 to 40%. Co-payment means part of the claim is to be compulsorily borne by the policy holder. There are two types of co pay is levied.  Co-pay is levied when you or any of the family members is hospitalised in any non-network hospitals or it is applicable compulsorily for claims made in case patient is of 65 years or more. If you don’t to know this provision well before you buy any health insurance plan then you will have to bear part of the claim every time when the claim arises. Again you will not get the full claim amount even if the claim amount is well below sum assured. There are options to waive the copayment in some cases if you pay additional premium. You need to check this before buying a plan.

Is there any solution to avoid these provisions? The answer is Yes. If you are looking out to buy a fresh mediclaim policy, avoid any policy that has such restrictions. There are around 25 companies which offer health insurance in India. You have too many options available at present and many companies do not have such restrictions in the plan. All the details related to plans are now also available easily on net and now it’s your duty to do some work so that there is no hassle at the time of claim. If you already have such a policy, then use the recent portability guidelines to shift to any insurance company that does not have such restrictions.  The portability is a good option but it’s not mandatory for new company to accept the proposal. The new company has right to reject the portability request. It will be difficult for you to port the plan if you are 45 years and above or have made claims in earlier years. The new company to whom the portability request is given may not be willing to accept your proposal due to higher risk. In such cases you will have no option but to continue with older company and also plan for a medical contingency fund to deal with these extra expenses that are not reimbursable.

It is always advisable to disclose all the facts correctly while applying for fresh insurance plan including bad habits and health history if any so that claim is not rejected in future. You must also fill the proposal form yourself and it is not advisable to just sign the form and give blank form to any agent. If we devote some time before buying any health insurance plan then definitely there won’t be any problem when the actual need arises. 

This article first appeared at indianotes.com on 5th October'2015

http://www.indianotes.com/Finance-How-to/Provisions-that-can-reduce-claim-amount-in-Mediclaim/197581/4/TI

Top Up Health Plans – Worth Buying

One day afternoon one of my friends came to my office and asked his doubts about the health insurance cover. Looking very disturb, started putting his query, look I and my family are covered for Rs. 3 lakhs health insurance individually, but I think the same is not sufficed and showed his concern. He added I am coming from hospital where one of my relative is admitted since last 10 days. He met with a major accident at pune express way and the total hospital bill till date is approx. 13 lakhs. He further added, I am very much worried about what should be the cover one should have? I am already paying premium of Rs. 25,000 p.a. and it is not possible for me to allocate more than double amount immediately. He curiously asked is there any way? The question was very much genuine and relevant to all of us as we have to cover for each and every uncertain thing in our life. I started answering his questions, look most of people are now opting for at least 3 lakhs sum assured policy realising that cost of the medical is rising at higher percentage. This amount may be sufficient for minor surgery or illness. However with rising healthcare expenses, the above sum insured may not be sufficient for critical illness or major accident. At the same time, these expenses can neither be avoided. The higher medical expense inflation need also to be considered while opting for health cover. Today 3 lakhs cover looks good but after 5 to 7 years it will be mostly inadequate.

Then I explained him the new version of health insurance plan, i.e. Top Up plan. This plan is a recently becoming more and more popular as it covers high sum assured. The premium payable is also low and hence become affordable. Top Up plan is add on health insurance plan which comes into picture only when the single claim is above certain deductible limit. The plan comes with minimum deductible of Rs. 1lakh to Rs.5lakhs depending on plan to plan. Deductible means the policy will be eligible for claim only above deductible limit. Normally deductible does not reduce sum assured.  Deductible is the amount over which the claim for each hospitalisation is reimbursable. For example: You have a basic health insurance Rs. 3 lakhs and also buy a top-up policy of Rs. 10 lakhs with deductible of Rs. 3 lakh. In the event of a serious hospitalisation with a claim of Rs. 13 lakhs; Rs. 3 lakh will be paid by your base plan and Rs. 10 lakhs will be paid by your top up plan.

The plan is normally beneficial for those who already have a basic health plan individual or group and want to enhance their sum insured at an affordable premium amount. It is not compulsory to have a base health insurance plan to buy a top-up plan, but it is always advisable to take a base policy first before opting for top-up plan. The only difference is between normal mediclaim plan and top up plan is the deductible amount. Policy holder has to opt for deductible amount at the time of buying the fresh plan. The higher the deductible, the cheaper will be the plan. But top-up health plans should be bought to bridge the gap between existing policies and actual costs. Also, in top-up policies, most insurers do not ask for medical check-ups up to the age of 55 years. In reimbursement plans, this is usually 45 years.

It is advisable to buy top-up plan from the same insurer from which you have bought individual or group health insurance. This saves time and documentation work at the time of claim. Normally it is better to coordinate with one insurer for reimbursement of claim, than to coordinate with two different insurers. The premium for 30 year old male for Rs. 3 lakh sum assured is around Rs. 3,000 p.a. in base plan. If the same person buys the top up plan of Rs. 10 lakhs with deductible of Rs. 3 lakhs, the premium will be around Rs. 3,000 p.a. So by paying just double premium you can increase your health insurance cover by four times. It is advisable to buy base plan as individual cover for each member of family and top up plan as family floater as the big claim mostly happens in the rare. So the chances of big claim are unlikely to happen to all family members except all are travelling together and met with major accident.

Both your indemnity policy and the top-up plan can be claimed together for single hospitalisation. The first condition to be met is the threshold of the top-up plan. Another criterion is that a top-up plan normally works only on a single incidence of hospitalisation. This means that you can use the top-up plan only if your medical bills exceed the deducible amount during a single hospitalisation by a single member. If relapse happens within 45 days of discharge from hospital, it is usually considered single illness. However, if the customer is hospitalised again for the same illness but after 45 days from discharge, it is usually considered a fresh illness. So, the deductible has to be crossed for every single illness for policy benefits to commence. There are few plans which do not have the limit of single claim but can be claimed for any illness over deductible amount for entire year. This plans are known as super top ups.

Insurance planning is the first step for success of financial planning. If you and your family members are adequately covered for health insurance than most likely that your investment will work better for you. So top up plans are the need of hour and avoiding it can cost you a lot and can also spoil your financial freedom. 

Dangerous Provisions in Mediclaim you must know

Mediclaim or Health Insurance is way of covering yourself and your family against any medical emergency arising out of any diseases or illness or accident. It is rightly said, “Health is Wealth”. But truly speaking how many of you are really serious when you plan to buy new health insurance plan?

The awareness to buy health insurance is increasing but do you devote reasonable time to research and compare the features before finalising the plan? Truly speaking answer is No. We have seen that people make a major mistake while opting for health insurance plan. It is very surprising to know that most of the people think that the plan of one company is similar to the plan of other company and decide buying a health plan only on the basis of the premium payable. This is not the correct way of buying health insurance. 

The most important thing before buying health plan is to know the features which can affect your claim amount in the future. It is important to know the basic difference in features while buying the new plan. You have to do some home work on the same and know all the exclusions and restrictions on the claim before finalising the health plan. Buying health insurance plan without knowing the dangerous provisions can really hit you badly when the actual claim comes. The following are the three major clauses you must read carefully before signing the application form. The premium comparison should be the last criteria for selecting any health insurance plan.

1) Room Rent Sublimit:

This is the most dangerous provision in health insurance policy where the claim amount is decided on the basis of room rent you stayed in while hospitalised for some illness. The sublimit is per day and is fixed at percentage, 1% or 2%, of sum assured. There is also upper cap of amount say Rs. 3,000 or Rs. 5,000 per day depending on plan to plan. The room rent sublimit is the ceiling in the policy on room rent payable per day in which you are supposed to stay when you or any of your family members is hospitalised. 

As we all know hospitals have different types of rooms available like general ward, twin sharing room and single room. The charges of any illness is decided on the basis of room you opt even though there is no difference in treatment and medicines given and even the doctor is same. This simply means in case you stay in a room costing higher than sub-limit, all other hospital expenses will also be reduced proportionately by Insurance Company on the basis of what you would have incurred had you stayed in a room that costs below your room rent sublimit. In other words you are unlikely to get the full amount of claim even if the claim amount is well below actual sum assured.

2) Co-Payment:

There are some policies available in the market in which co-payments are required to be paid by policy holder which is 10% to 20% of the claim amount. Co-payment means, part of the claim is to be compulsorily borne by the policy holder. Co-pay is levied when you or any of the family members is hospitalised in any of the non-network hospitals. It is also applicable compulsorily for claims made in case patient is of 65 years or more. If you don’t to know this provision well before you buy any health insurance plan than you will have to bear part of the claim every time when the claim arises. Again you will not get the full claim amount even if the claim amount is well below sum assured. You can opt out of this by paying additional premium in few cases which you need to check before buying a plan.

3) Premium loading after claim:

You should also know before buying a health insurance whether the plan has claim related loadings or not. Most of the time people buy health policy based on the lower premium but fail to understand the impact of premium loading in case of claim. There are some policies available in the market where there is provision of loading the premium in case of claim which is up to 200% of the premium amount. The loading happens at the time of next renewal and automatically cheaper policy becomes more costly product available in the market.

What is the solution now? If you are looking out to buy a fresh mediclaim policy, avoid any policy that has such a restriction. There are total 23 companies which offer health insurance in India. You have too many options available at present and many companies do not have such restrictions in the plan. All the details related to plans are now also available easily on net and now it’s your duty to do some work so that there is no hassle at the time of claim. 

If you already have such a policy, then use the recent portability guidelines to shift to any insurance company that does not have any such restrictions.  Of course if you are older than 45 years or have made claims in earlier years, the new companies may not be willing to accept your proposal. In such cases you will have no option but to continue with older company and also plan a medical contingency fund to deal with these extra expenses that are not reimbursable.

It is always advisable to disclose all the facts correctly while applying for the fresh insurance plan including health history if any so that claim is not rejected in future. You must also fill the proposal form yourself and it is not advisable to just sign the form and give blank form to any agent. If we devote some time before buying any health insurance plan then definitely there won’t be any problem when the actual need arises.

Optima Senior – Senior citizen plan from Apollo Munich

Apollo Munich Health Insurance has recently launched a senior citizen health insurance plan. The plan is offered as individual basis only. The salient features of the plans are as under:

• Entry age in the plan is 61 years and onwards.
• Life time renewability, means once you are insured you are covered for whole life.
• The plan is available for 2, 3 and 5 lakhs sum assured.
• Plan also covers upto 30 days pre hospitalisation and upto 60 days post hospitalisation expenses.
• First 30 days are not covered except for accidental injury.
• Pre-existing disease/illness covered after waiting period of three years.
• Two years waiting period for certain diseases like cataract, hernia, joint replacement etc.
• 5% discount on premium after every claim free year.
• 5% discount is given on premium if both i.e. you and your spouse are covered under the same.
• 7.5% additional discount if you pay two years premium in advance.
• Compulsory medical check up depending on age, health declaration and sum assured opted.
• You can also port your existing plan to optima senior plan.
• Free e-opinion from panel doctors in case of listed critical illness.
• In case of hospitalisation 15% co-pay will apply if treatment taken in twin sharing or lower type and 30% co-pay will apply if treatment taken in single room or higher room.
• Plan is eligible for tax benefit up to Rs. 20,000 per annum u/s 80-D of the income tax act.

Looking at features of the plan it is one of the best senior citizen plans available in India. The competition in the health insurance will definitely benefit society at large but one should also look at premiums payable, exclusions and other conditions before entering to any insurance contract. It is also advisable to disclose all the facts correctly while applying for any fresh insurance plan.

Aviva Life’s Health Secure – An exclusive online product

So Aviva has launched a much awaited online critical illness plan. This covers 12 major diseases. This plan is available on line and thus can be purchased without the help of an agent and premium is cheaper by 30 to 40% compared to offline products available in the market. As a financial planner while making recommendations we first recommend our clients to have adequate life, health and disability insurance cover. Income and wealth protection is the first step in financial planning and nobody should ignore this. We never jump to wealth accumulation without actually taking care of insurance need of the family. Why critical illness policy is also important because in case you are diagnosed with major diseases than immediately your earning stops or capacity to earn comes down substantially. Critical illness plan plays very important place in this. It pays you a lump sum amount equal to sum assured in case you are diagnosed with any of the major diseases covered like heart attack, kidney failure, stroke or cancer etc. The amount is paid and is not dependent on the quantum of expenses incurred by you for treatment of the disease diagnosed. We have strongly been advising our clients to buy critical illness plan while making recommendations in their financial planning but most of them did not buy the same and postponed it due to high premiums. There are a very few plans available in the market and those are not uniform in coverage. Critical illness plans are made available by both with life insurance and general/health insurance companies. The number of diseases covered ranges from 4 to 12 creating confusion for the consumers to choose any particular plan. The accident disability plans on the other hand are available mostly with all insurers are at par and premium of accident disability is much cheaper than even life insurance premium. Whereas premium for critical illness is minimum four times of life insurance premium and this higher cost make it unaffordable for most of the people buying critical illness insurance.  A few life insurance companies offer waiver of premium rider for critical illness instead of buying it as a separate rider without understanding the implication. In case of Waiver of premium rider what you get is a waiver from payment of future premium after you have been diagnosed with critical illness. This does not help you much. Therefore it is always advisable to buy separate critical health plan or a proper critical illness as separate rider so that you are paid lump sum at the time when you require it most as once you are diagnosed with critical illness and you continue with the same standard of living. Critical Illness plans are nothing but income replacement plans as your life insurance plan will not pay because you are still alive whereas your health insurance plan will reimburse only the hospital expenses. Therefore, critical illness plan is necessary to substitute your income in case of major diseases.

Eligibility conditions of Aviva’s Health Secure plan:

Minimum entry age is 18 years and maximum entry age is 55 years. The minimum term offered in the plan is 10 years & maximum is 30 years subject to maximum maturity age of 65 years. The plan is regular premium paying with yearly and half yearly payment option. The minimum premium payable is Rs. 2,000 in the plan. The minimum sum assured offered is 5 lakhs and maximum is 50 lakhs. Plan also offers high sum assured rebate of Rs. 0.90 per thousand sum assured over 10 lakhs sum assured and below 25 lakhs sum assured. The rebate increases to Rs. 1.50 per thousand sum assured over 25 lakhs sum assured. The grace period of 30 days is allowed for payment of premium without any interest. The plan has the waiting period of initial 90 days after the policy is issued and survival period of 30 days after diagnosis of the critical illness. This means policy will not pay you anything if you are diagnosed with any critical disease within 90 days from issue of the policy. More over no money will become payable unless you survive for at least 30 days after you are diagnosed with the critical illness. Premiums rates will not change in first five years of the policy but are can be reviewed after five years with the prior the approval of IRDA.

Diseases covered under the plan:

The plan covers 12 major diseases such as Heart Attack, Stroke, Cancer, End stage kidney failure, major organ transplant, Coronary Artery Bypass Surgery, Benign Brain Tumour, Heart Valve Surgery, Motor Neurone Disease, Multiple Sclerosis, Coma and Paraplegia. One needs to consult a medical practitioner to understand in details the nature of diseases covered in detail and should also go through the exact definition of the diseases to know when exactly the claim is payable. Pre existing diseases are not covered and one should also read carefully the exclusions mentioned in the policy before buying this product. 

Looking at stress level at work and present life style, one should buy critical illness plan at the younger age. One should take minimum 50% of the cover of one’s life insurance need as critical insurance cover. It is always very important to disclose all the material facts in the proposal form while buying any insurance plan to avoid the rejection of the claim at later stage. Aviva has started a new trend and hope other will follow soon for the betterment of the society at large. 

This article first published at myiris.com on 26th June'2012.

http://www.myiris.com/financial/storyShow.php?dir=2012/06/26/&fileR=20120626093342715

IRDA Health Exposure Draft – Few Concerns

IRDA has released exposure draft on health insurance which most consider as landmark and revolutionary and perceived that this will help society at large. But, I don’t think so as there are few concerns and needs to be addressed before these regulations are finalised.

The major change which the draft regulation proposes is that all health insurance policies shall provide for entry age till at least up to 65 years. However mere provision of minimum age till which the health insurance should be available does not necessarily mean that all the proposals fitting into the age will be accepted by the insurers. The final decision as to whether to accept or reject the proposal is in the hands of insurers and history tells us that insurers are not willing to accept a new proposal for any person above age of 45 years. Mere providing for grounds for rejection, which the proposed regulations provide, shall be made in writing, be justifiable and fair will not serve the purpose. IRDA has to ensure that proposals are not being rejected unless there are serious issues or accepting that proposal is detrimental to the interest of other policy holders. Moreover IRDA should also provide for right to appeal in case of rejection and the procedure to be followed for that.

Draft regulations also provide that all health policies shall be renewable till death and will not have any exit age for renewal. One very welcome provision of the draft regulations is that, it also provides that   insurer shall not refuse the renewal of the health insurance policy on the ground that the insured has made a claim or claims in the previous or earlier years. What the insurance company can do in such cases is that they can load the premium if the individual claims experience, for each of the three consecutive policy years is more than 500% of the premium under the current policy. This cap linked as percentage of premium is going to be detrimental to the interest of the policy holder. Let us understand the implications of this provision with an example. For example a healthy 30 years male will get health plan for sum assured of Rs. 3 lakhs at around premium of Rs. 4,000 p.a. Policy holder will be loaded if his claim amount is more than Rs. 20,000 yearly for three consecutive years. The amount exhausted is not even 10% of the sum assured and he is liable for premium loadings as per draft. This is not justifiable and should at the most the claim amounts should be linked to percentage of the sum assured for better clarity and understanding of the provision. I would even go to the extent to saying why loadings are required as premium is charged after considering the probabilities of claims and it anyway increases with advancing of age so as to keep pace with higher probability of claim being lodged.

The draft also required the health insurance company to gives option to migrate to suitable health insurance plan at the end of the specified exit age from specific policies. This is useful in case of family floater policies where the child automatically excluded from health cover once he completes 21 years of age and the child looses all its history. More clarity on the count is required as to whether a person will get the same sum assured which was available to him in the family floater plan. Policy holder must also get all benefits carried forward without any break and exclusions.

It is a good that draft provides for taking into account cumulative bonus with the sum assured to arrive at sub limits applicable. Sub limits on room rent are the major stumbling block for the insured person to claim the full genuine expenses incurred as a few people understand the impact of the same. This means in case you stay in a room costing higher than this limit all other expenses will also be charged accordingly but you will be entitled for expenses on the basis of what you would have incurred had you stayed in a room that costs within your limit. IRDA should also provide for periodic upward revision in the sub limits as room rents are likely to go up looking at medical inflation. The room rents are not uniform throughout the country and are more expensive in metro cities and these facts are also to be looked in before finalisation of the regulations.

There are some policies available in the market in which co-payments are required to be made by policy holder up to 20% of the claim amount. Co-payment means part of the claim has compulsory to be borne by the policy holder. Co-pay is levied when you are hospitalised in non net work hospitals and are levied compulsory for claims after age 65 years. There is no provision to regulate the terms about co-payments in this draft. IRDA should also take necessary steps to regulate this practice.

The draft has provided for grace period up to 30 days which at present is 15 days. One should note that cover is not available during the break period, means if you do not renew your policy before due date than you will not be covered for the diseases except due to accident till you make the payment in the grace period. One should note that in life insurance death claim is payable even you die during grace period. IRDA should look into this as why claim should not be payable during the grace period if the claim is genuine.

Draft also provides for no payment of commission to intermediary in case of policy is ported to another insurer. I strongly believe that one requires the help and support of agent in health insurance plans and if agents are not adequately remunerated then will be least interested in helping people in portability. IRDA should regulate the commission payout on overall basis and not for some specific cases. Insurers should also be asked to launch online plans which are cheaper than normal plan just like online term plans of life insurance. 

Draft should also mandate inclusion of alternative treatments because people are worried about the side effects arising out of the allopathic medicines. Also in some cases, with the use of alternative medicines, a surgery can also be avoided. Many People are already taking alternative treatments to cure their diseases, but unable to claim the expenses. Draft should also give relief for this. 

Many time previous years original policies are also called for before settling the claims. According to me this is an absurd.  Insurance companies or their TPAs should maintain these records and policy holder should not be harassed by asking for such requirements. IRDA should mandate that every renewed policy will also mention the original start date of the policy so that there is no need to submit earlier copies afterwards.

IRDA should also not allow insurers to change premium rates before completion of at least 5 years. We have witnessed the wrong practice by one particular insurance company of offering a low cost mediclaim policy and subsequently raising the premium by 300% to 400% at the time of next renewal. The policyholders had no option but to pay the premium so as to get the benefit of medical history for coverage of pre-existing disease. The raise in premium should also be fare and justified.

Last but not least draft should also provide for payment of interest @12% p.a. for delay in claim settlements beyond 30 days. 

This article first appeared at myiris.com on 18th June'2012.

http://www.myiris.com/financial/storyShow.php?fileR=20120618162310715&dir=2012/06/18

Optima Restore - a unique health plan from Apollo Munich

Apollo Munich Health Insurance has recently launched a unique health/mediclaim plan with restore benefit.  This restore benefit will automatically reinstate the basic sum assured in case it is exhausted during the policy term. The benefit to restore the sum assured will be given free of any additional cost. Definitely the premium will be higher compared to normal mediclaim plans. You need to compare the same before finalising the product. The plan is a first of its kind giving restore benefit.  The plans which are available till now don’t pay you anything above sum assured during one year after you exhaust the basic sum assured. This plan gives the additional benefit as it restores the sum assured again and can be utilised for any other illness or in case of any member of the family if it is family floater.

You have to note that there are certain conditions which are required to be fulfilled before availing this benefit. You must check these condition before coming to final conclusion. You are eligible to claim restore benefit only after the basic sum assured inclusive of bonuses are fully utilised in that year. It means suppose you have 3 lakhs restore plan and first claim is utilised by taking 2.5 lakhs in one case and subsequently new claim comes for another 1.5 lakhs during same policy period. In this case you will not be able claim the restore benefit as you have not fully utilised the 3 lakhs sum assured in 1^st claim. You will get only Rs. 50,000 in second claim which is the balance from 3 lakhs basic sum assured and have to pay the balance of Rs. 1 lakh from your pocket. Now you have fully exhausted the sum assured and are eligible to claim the third claim under restore benefit if it comes during that policy year. Secondly it will not be available for the same disease/illness for the same person who has claimed the basic sum assured during that particular year.  The restore benefit is not eligible for bonus and will not be carried forward in subsequent year if not utilised in that year. You have also to note that Restore benefit is available only once in a policy year.

The plan is available as individual as well as family floater. The sum assured offered in the plans are 3,5,10 and 15 lakhs in both the category. Interestingly plan has also come with never before renewal incentive in case of claim free year. The basic sum assured will increase by 50% in 1^st claim free year and 100% in 2^nd claim free year. It gives 10% family discount if 2 or more members are covered under individual plan. It also gives additional 7.5% discount on premium if you pay 2 years premium at a time. This is not advisable if your premium comes above Rs. 15,000 as the tax benefit is restricted to Rs. 15,000 in a year. Other benefits like life time renewal, no co pays and sub limits and no additional loading at renewal are also there in the plan which also makes plan more attractive. Apollo Munich Health Insurance Company is standalone health insurance company and has a tie up with 4000 net work hospitals across India for cash less facility. Company has network of 50 branches with force of 25,000 agents across India. The optima health plan is also eligible for tax benefit u/s 80-D of the Income Tax Act.

Looking at features of the plan it is advisable to take family floater plan compared to individual plan. The chances of same person falling ill in the same year are less and also if the same person falls sick for the same reason for which he has been paid the claim earlier than the claim is not payable. The competition in the health insurance will definitely benefit society at large but one should also look at premiums payable, exclusions and claim ratio before entering to any insurance contract. 

Health is Wealth: Put First Thing First

It is rightly said, “ Health is Wealth”. But truly speaking how many of us are really serious about this? Today, when everything is uncertain, nobody can be sure what will happen tomorrow. We all are aware that medical bills are high and getting still higher. Still we do not buy health insurance plans. Health Insurance is way of covering you and your family against any medical emergency arising out of any diseases or illness or accident. In India health insurance premium is considered as expense. This is because we do not give importance to eventualities. It is also true that, as the age of an individual increases, the medical bills are likely to increase and become a burden on the family. Some time entire family collapses because of this financial burden. We need to think seriously and act immediately upon it.

When we meet clients, usually we find one or two life insurance policy in each & every home, but the health cover is mostly missing there, not only because of lack of awareness but also because of unwillingness to pay the premium from customer side. At present less than 10% of total population have their health insurance plan. Data shows that 30% of people with heart problems are less than 40 years old. Diabetes, blood pressure and Cholesterol are also very common in younger age. Stress level at work, habits and increasing life style illness also add to physical & mental pressure. Better we take early step to cover our self and our family before it’s too late.

A mediclaim policy covers hospitalization expenses for the treatment taken for disease or illness or accident. It also covers pre and post hospitalization expenses up to certain days and certain limit of sum assured. This limits differs from Co. to Co. depending upon the policy and sum assured.

In today’s scenario health plan of 50,000 or 1 lakh sum assured will not suffice. Individually we require minimum 3 to 5 lacs health cover. You can also buy a family floater with an extra top up plans, which will really help you in bad days. Now most of the Co. also offers cash less facility if the patient is hospitalized in network hospital. Thus, we can concentrate only on illness of the patient and save time & energy from raising funds from friends and relatives.

Other benefits:

· Cumulative bonus of 5% to your sum assured for every claims free year

· Family discount of 10% is applicable

· Health Check up in designated Centers or Reimbursement up to Rs. 1000/- at the end of continuous four claims free years.

· Income tax benefit on the premium paid up to Rs. 15,000/- as per section 80-D of the IT Act. You can also claim for the premium paid for your Parents separately up to Rs. 15,000/- ( Rs. 20,000 in case of senior citizens).

General exclusions

· All diseases/illness/injuries existing at the time of proposing this insurance

· Any disease contracted during the first 30 days of commencement of the policy

· Certain diseases such as hernia, piles, cataract , removal of gallstones or renal stones and sinusitis shall be covered after a waiting period of 2 years

· Non-Allopathic medicine

· Congenital diseases

· All expenses arising from AIDS and related diseases

· Cosmetic, aesthetic or related treatment

· Use of intoxicating drugs, alcohol

· Joint replacement surgery (other than due to accidents shall have a waiting period of 4 years)

I also advise my clients to go through the exclusions and the limits of the cover, so that there should not be any problem in tough time. I personally believe that role of an agent/advisor is more important in claim settlement in health insurance compared to life insurance, because claim comes very frequently in health insurance. I also advice my clients to buy the health plans from General Insurance or Health Insurance Co.’s instead buying it from life insurance co. Today many Life Insurance Co. also offers these plans, but you are advised to stay away from this.

A healthy life means many more working years and chance of wealth creation and financial freedom in your life.

This article first appeared at myiris.com on 24th November' 2010.

http://www.myiris.com/financial/storyShow.php?dir=2010/11/24/&fileR=20101124143053194