Do Not Let A Health Crisis Ruin Your Financial Health

For a family of four living in a metro, it is recommended to opt for a family floater health insurance plan with a sum insured of at least Rs 15-20 lakh

Today, modern science has made it possible to deal with most ailments. However, medical treatment and hospitalisation is expensive and medical inflation at 14-15 per cent is much higher than normal inflation. A medical emergency can not only be a traumatic experience; it can wipe out your life’s savings in the blink of an eye. So, health insurance is a must.

In this story, we help you navigate the world of health insurance.

Get Covered Adequately
“For a family of four living in a metro, it is recommended to opt for a family floater health insurance plan with a sum insured of at least Rs 15-20 lakh,” says Rakesh Jain, CEO, Reliance General Insurance.

A family floater insurance is a comprehensive health insurance plan that covers multiple family members under a single policy and is thus a cost-effective way to protect all your family members. All family members share a sum assured.

During the pandemic when multiple family members fell ill together, the family floater coverage turned out to be inadequate for many. So, the higher cover you can get, the better. 

“One may opt for a super top-up plan that can provide additional coverage at a lower premium, if needed,” says Ajay Shah, Head, Distribution, Care Health Insurance. 

A super top-up health insurance plan acts as an additional layer of coverage on top of your primary health insurance policy. Imagine you have a primary health insurance policy with a sum insured of Rs 5 lakh. You also purchase a super top-up policy with a sum insured of Rs 3 lakh. If you incur medical expenses of Rs 6 lakh in a single year, your primary policy would cover Rs 5 lakh, and the remaining Rs 1 lakh would be covered by the super top-up. A super top-up health insurance plan costs less than a basic plan with higher sum insured.

“The amount of health insurance should be as much as you can feasibly get and afford,” says Pankaj Nawani, CEO, CarePal Secure, an insurance platform. 

Most of the health expenses for an individual in his/her lifetime are not in the hospital but in the outpatient department (OPD). Hence it would make sense to have OPD coverage, if one can afford it. “OPD cover often includes preventive care services such as health check-ups, screenings which help one detect potential health problems. Timely OPD intervention often helps one avoid more expensive treatments in future,” says Indraneel Chatterjee, Co-founder and COO, RenewBuy, an insuretech firm. 

“Such OPD coverage is very useful in seasonal diseases like dengue or minor injuries such as hairline fractures. So, paying an extra for such covers make sense,” says Santosh Puri, Senior Vice President, Health Product and Process, Tata AIG General Insurance. 

Covering Elderly Parents 
While it might be convenient to add elderly parents under your floater policy, buying a separate policy for them would be the best option. 

“Senior citizens tend to have more particular health requirements that might require a higher sum insured and more frequent claims. This can deplete the total sum insured of the floater plan leaving less protection for other members of the family,” says Siddharth Singhal, Head – Health Insurance, Policybazaar, an insurance marketplace. 

A dedicated plan for them would have better coverage for age-related illnesses and may come with more apt features and benefits like pre and post hospitalisation coverage, day-care treatments and even critical illness riders suited for their needs.

In fact, there are plans specifically designed for the elderly population.  “Senior citizen health insurance plans are designed specifically for older adults, providing benefits such as pre-existing disease coverage, annual health check-ups, and higher sum insured options, which make them a better fit for elderly parents,” says Jain. 

When it comes to elderly parents, one may even consider co-pays and deductibles to get the coverage at more affordable premiums. 

“Deductibles and co-pay is a halfway compromise where you can take care of part of the expense, which you would have to take 100 per cent of if you opt not to have insurance, and in return protect yourself from very high expenses,” says Vivek Chaturvedi, CMO and Head of Direct Sales, Go Digit General Insurance. 

However, try and opt for a low or zero deductible when covering your parents to ensure coverage starts quickly, given their frequent healthcare needs. “Also, check for a plan where the co-payment percentage is low as it reduces the out-of-pocket expenses during emergencies which can be an unnecessary burden,” says Singhal. 

Beyond Basic Coverage
It is always recommended to opt for a separate critical illness add-on such as cancer, along with one’s regular health insurance cover. “Critical illness plans provide a lump sum pay out on diagnosis of specific life-threatening conditions like cancer, heart attack or kidney failure,” says Shah. 

These plans may be required because the cost of long-tailed treatment for such diseases can be extraordinarily high and the lump sum pay out would be useful. 

Hence, prioritising coverage for these conditions as add-ons along with a regular health plan, gives the consumer the certainty to meet any unexpected medical condition. “If a consumer gets diagnosed with any terminal illness like cancer, a cancer specific cover will help the consumer with its diagnosis and treatment,” says Chatterjee. 

Fight For Your Claim 
There are instances when your health insurance claim is rejected. The first thing you must do is review the rejection letter thoroughly to understand the reasons for denial. “Typically, gaps such as non-disclosure of information in the policy document, exclusions, lapsed policy, incomplete or incorrect claim details, or delay in filling lead to claim rejection. This makes it important to understand the cause and prepare for the next steps accordingly,” says Shilpa Arora, the Co-founder and Chief Operating Officer (COO) of Insurance Samadhan, a platform for resolution of insurance complaints. 

If your claim is unjustly rejected, gather supporting documents and consult an industry expert. Contact the insurance provider’s grievance cell to discuss the issue, appeal, or resubmit the claim. Follow the insurer’s appeal process, provide additional evidence, and keep track of all communications to ensure a smoother process.

“If the insurance company does not entertain your appeal and rejects the claim again, you can raise the concern to the Bima Bharosa (IRDAI) complaint portal. If you receive a denial from Bima Bharosa then you must consider contacting the Insurance Ombudsman within a year of the rejection to seek redressal. The last option is filing the complaint in the court,” says Arora.

The GST Debate
In India, health insurance premiums are subject to a goods and services tax (GST) of 18 per cent. This means that when you purchase a health insurance policy, you'll pay an additional 18 per cent of the premium amount as GST. So, if you purchase a health insurance policy with a premium of Rs10,000, you'll need to pay an additional 18 per cent GST, which comes to Rs 1,800. So, the total amount you'll pay for the policy is Rs 11,800.

But why such high GST on health insurance premiums? It is an interesting debate with powerful arguments on both sides. “It is a fact that taxes paid by richer sections of the society pave the way for welfare of the poorer citizens. If we look at media reports of GST collected on health insurance policies and the annual budget of Ayushman Bharat, they are nearly the same,” says Nawani.

At the same time, the middle classes, who are the primary customers of private health insurance are also hard-pressed to save money and they indeed share a disproportionate burden of taxation.

“’If the GST on insurance products were reduced or eliminated, consumers will benefit’,” says Pooja Yadav, Chief Product Officer, Zuno General Insurance.

Don’t let a health emergency drain your wallet. With smart coverage, your finances stay healthy—even when you’re not!