Things to look out for in medical insurance policy

The rising cost of healthcare today can be a crushing financial burden for an individual, hence buying a medical insurance policy is an imperative that can be ignored only at one’s own peril. However, before buying a medical insurance (mediclaim) policy, one needs to make sure that the policy cover will meet the health cover needs of the individual and the family. Some of the things to look out for in a mediclaim policy are as follows:

Amount of premium: The amount of premium you pay for getting insurance cover may not be as important as the nature and extent of medical cover you get, but cost does matter as different insurers may offer the same cover at different costs. Although the lowest cost may not be the best option, the cost of medical cover needs to be reasonable in relation to the total amount and the type of medical cover offered by the policy.

Pre-existing diseases and waiting period: Insurance companies do not offer medical cover from Day-1 of the purchase of the policy, so any disease existing at the time of purchase is not covered under the policy. There is a mandatory waiting period ranging from 2-4 years after which the insurance cover becomes effective. During this waiting period, the insurance company is not liable to pay any claim towards treatment or hospitalisation costs incurred by the insured for any disease. Hence, one must buy a policy that covers pre-existing diseases as well or has a minimum waiting period for pre-existing diseases.

Network hospitals: Insurance companies tie up with hospitals across the country where the insured can avail cashless treatment facility. It is important to look out which of the hospitals in your city are enlisted in the insurance company’s network hospitals. The more the number of network hospitals near the place of residence, the better it is you. Also, the cashless treatment facility available at network hospitals makes sure that you do not have to settle the hospital bill and later claim reimbursement from the insurance company. This is because the cashless treatment facility ensures that the insurance company settles your hospital bill directly.

Co-payment clause: Some of the medical insurance policies may have a co-payment clause wherein the insured is required to share a specified percentage of the cost of treatment and hospitalisation expenses. The co-payment percentage could be in the range of 20-30%, so for a hospital bill of Rs 1 lakh, the insured may be required to pay Rs 20,000-30,000 (depending on the percentage specified in the policy document), while the balance amount is paid by the insurance company. So, it is better to buy a policy that does not have a co-payment clause or one that specifies a minimum percentage of co-payment.

Pre-hospitalisation and post-hospitalisation expenses: Usually pre-hospitalisation expenses are covered for 30 days before hospitalisation and post-hospitalisation expenses are covered for 60 days after hospitalisation. However, if an insurance company offers pre-hospitalisation and post-hospitalisation cover for more number of days, it is always better.
Exclusions: Insurance companies provide a list of diseases or medical conditions that are excluded from the scope of insurance coverage. It is better to go through the list before deciding on whether or not to buy the policy. The lesser the number of exclusions, the better.

No claim bonus: When a policyholder does not submit any claim during the year, the insurance company rewards the policyholder in the form of increase in sum assured for the same amount of premium. The increase in sum assured is 5% for a claim-free year, thus the total accumulated increase could be as much as 50% of the sum assured for a maximum permissible period of 10 years.

Room rent sub-limit: Some of the insurance companies cap the room rent payable under the policy to a maximum of 1% of the sum assured (2% in the case of ICU). It is better to go for a policy that does not have such a cap on room rent.