A Guide to Navigating Insurance Intricacies: Part 2

In Part 1, we looked at the basics of health insurance and the factors you should consider when comparing insurers. The next step is understanding the positive features your policy may actually offer, the restrictions you may come across, and the questions that most people ask before signing up. Here is what you need to know.

Positive Features

As you explore different plans and insurers, you’ll notice that beneficial features can vary. Here are a few worth prioritising:

1. Cumulative Bonus: Most insurers incentivise policyholders who do not make claims by offering a no-claim bonus. Insurers have also introduced cumulative bonuses that can be offered regardless of claim history, which ultimately increases your existing coverage.
2. Restoration or Recharge: In a family floater, the sum insured is shared among all family members. If multiple people require treatment during the same policy year, a restoration benefit comes in handy by refilling the cover amount after a claim is settled, making it available for subsequent claims.
3. Pre- and Post-hospitalisation: Insurers specify a period, such as 90 or 180 days, during which certain expenses before and after hospitalisation are covered. These are usually settled through reimbursement.
4. Day-care Coverage: Health insurance generally covers inpatient hospitalisation, where the patient is admitted for more than 24 hours. Day-care coverage extends this to certain procedures that require less than 24 hours of hospitalisation, such as septoplasty, tonsillectomy, cataract surgery and chemotherapy.

Features to Look Out For

Having covered the positives, certain policies may come with more restrictions, so it’s important to keep these in mind. Here’s what to watch out for:

• Co-payment: Corporate policies provided by employers and some government policies typically have a co-payment clause. This means that at the time of a claim, you pay a certain percentage while the insurer pays the rest. This agreement is made at inception and continues throughout the policy lifetime. If you want to lower your premium, you can opt for a co-payment. However, it is not recommended, and many private insurers do not have this restriction.
• Room-Rent Restrictions: Insurers may put restrictions on the type of hospital room you can choose. Some insurers only cover shared rooms. If you choose a room that is more expensive than what the policy allows, the bill may be split according to the eligibility, with the surplus being borne by you.
• Sub-limits: Some insurers impose sub-limits on specific treatments, even if the overall sum insured is substantial. For example, an insurer may cover only ₹25,000 for cataract surgery or ₹50,000 for hernia treatment.

Frequently Asked Questions

Why should I buy health insurance if I’m fit and healthy?

It might seem like being fit and healthy negates the need for health insurance, but the best time to buy one is when you least need it. Once you are diagnosed with a condition, the severity of it can determine whether you get a policy or not. Underwriters evaluate the application and decide whether the policy can be issued and at what premium. 

How much coverage is ideal?

Buying ₹1 crore or more is not necessarily required. Many comprehensive plans offer bonuses, allowing coverage to increase over time. If you choose a very high sum insured, remember that premiums can increase substantially in the coming years.

What is a medically necessary treatment?

Insurers assess whether a treatment meets their definition of medical necessity before approving a claim. Policies contain a reasonable and customary clause, under which the insurer is liable only for an amount considered reasonable for that treatment in the given area, making it important to compare costs between hospitals ahead of any planned treatment. 

Is undergoing a medical check-up necessary before policy purchase?

A medical check-up is not necessarily required before purchasing health insurance. You are expected to disclose the medical information you already know.

Is opting for maternity coverage worth it?

Insurers that provide maternity coverage may impose limits based on the type of delivery, number of deliveries and waiting periods. Some may also require both partners to be insured under the same policy. Newer policies may cover maternity along with pre- and post-natal expenses, but it is important to assess whether buying such a policy solely for maternity is beneficial. A better alternative is to get coverage through corporate plans. 

What is a free-look period?

A free-look period generally gives you around 15 days to review the policy and cancel it if you are not satisfied with its terms and conditions or if you have a change of mind. However, the exact duration can vary from policy to policy, so it is advisable to check the policy document for the free-look period applicable to your plan.

Why are claims rejected?

Claims can be rejected due to non-disclosure, misrepresentation of facts, insufficient information, waiting periods, permanent exclusions or because of treatment at blacklisted hospitals. If a genuine claim is rejected, you can approach the insurer’s grievance mechanism and escalate the matter to the Ombudsman if needed.

There is no single health insurance policy that works for everyone. Your age, health and financial situation can all influence what works for you. We hope this two-part guide helps you understand health insurance better and make a more informed decision when choosing a policy.

Also read: How do fixed deposit and life insurance differ?

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