Author: Rupanjali Mitra Basu

Ratan was planning his investments when his friend asked him whether he had included a health insurance plan in his portfolio. Ratan hadn’t. He believed that being young (he was in his early 30s), he didn’t require health insurance. When Ratan mentioned why he didn’t buy a health plan, his friend then briefed him on the importance of a health insurance plan. Having heard what his friend said, Ratan realized the error of his beliefs and immediately invested in a health plan for himself and his family. What about you? Do you know the importance of health insurance or are you too caught up in your pre-conceived notions?

Read more about Why you should invest in health insurance early

Though the awareness of having a health insurance plan has increased, some of us still do not understand its importance. Which one are you? Kudos to you if you know the importance of health insurance! If you don’t, read on to know what Ratan’s friend had to say about why health insurance should be a part of your investment planning:

• Medical costs are injurious to your savings.

Do you know how high the medical costs have risen? The basic hospitalization costs have risen by more than 10% in a decade. Given below are the findings of the survey conducted by National Sample Survey Office in 2014:

If hospitalization costs have increased so much, think about the cost of medical procedures. Wouldn’t they be high as well? Can you tackle these expenses yourself?

Medical inflation is forever on the rise, which increases medical costs. Increased medical costs deplete your wealth and savings. What is the point in creating all those investments if you do not have a health plan to protect them from being depleted? A health insurance plan is designed to take care of these increasing medical expenses. By paying such expenses, the plan protects your savings from being drained out in case of a medical emergency.

Read more about How cashless insurance can save you the day when money ends

• You can get tax exemption under Section 80D.

Don’t you invest with a view to save your taxes as well? Your health insurance plan helps in this regard too. Health insurance premiums paid for yourself and your family (including your dependent parents), are exempted from tax under Section 80D. You can, thus, claim up to  Rs.60, 000 as  tax exemption if you pay health insurance premiums for self and your dependent parents (if both are senior citizens).

• Health insurance helps in retirement planning too.

Did you know that health plans come with a lifelong renewability feature? Yes, you can now renew health plans for as long as you are alive without any maximum renewal age. This is helpful, especially after you retire. In your old age, your income is low and the probability of medical contingencies is high. If you have a health plan, any medical contingency you face would be covered by your health plan thereby sparing your savings. Here’s a word of caution, though. To enjoy lifelong renewability, you should not only buy a health plan, but also ensure its timely renewals.

• Teach your children the power of a health plan.

If you inculcate the habit of making a health insurance investment, your children, too, will learn the importance of having a health insurance policy. This knowledge helps your children to include a health insurance plan in their investment planning and enjoy its benefits. So, learn the importance of health insurance yourself and then impart this knowledge to your children.

We invest for wealth appreciation and a health insurance plan helps in safeguarding your investments against medical contingencies. If the rising healthcare costs are any indication, you should invest in a health insurance plan at the earliest. Furthermore, health insurance investment is not a one-time deal. Timely renewals are also required to continue the plan benefits. Having a valid cover throughout your life helps after retirement too when your plan pays for all of your medical expenses. Ratan was duly educated about investing in a health insurance plan, were you?

Read more What is insurance and how does it work?

Read more 7 Reasons you should invest in health insurance early

Read more 4 Reasons why health insurance is an important investment

Also, check out our video below to understand why health insurance is an important investment

Feel free to share your comments below

A health insurance policy has become a very essential requirement in today’s age when diseases are becoming so common. The high healthcare costs necessitate having a health insurance plan in order to protect our pockets from the brunt of medical expenses. As people are becoming more aware of the importance of a health insurance policy, insurers are offering different types of health plans. Each plan has a unique feature which separates it from the rest. In a melee of so many health insurance plans, can you select the best one for yourself?

Though you might look at the coverage features and the premium of a health insurance policy, you might still make a mistake while buying the health plan because of its complicated nature. Moreover, when it comes to buying a health insurance plan, you have different channels through which you can buy the plan. There is your regular agent or a more professional broker at your service. Then there is the online platform where insurance companies sell health insurance plans directly to you or through web aggregators. With so many modes of buying a health plan, can you be fooled when buying the plan? Yes, you can be. No matter which buying channel you choose, there are areas where you might falter. Let us have a look at such areas corresponding to different health insurance buying channels:

Independent Insurance brokers

NBFCs, web based firms and even other private firms act as brokers for health insurance companies. As brokers, they deal in plans offered by multiple companies and hence can provide more options. When buying from them, here’s how you can be fooled:

• They may not always mention the limiting features of the policy.

When you buy a health plan from brokers, they would tell you all about the plan benefits. However, the health plan also has some restrictive clauses like waiting period, limits on expenses, etc.; which might not be told to you. Since your health plan would cover your medical expenses based on the plan’s terms and conditions, such restrictive features, if not revealed, can easily fool you.

• They may not tell you the importance of on-time renewals and No Claim Bonus (NCB) benefits.

In any year when you have a health plan and do not make a claim therein, you are entitled to a No Claim Bonus (NCB). This NCB is cumulative in nature and increases each subsequent claim-free year. This NCB is available only when you renew your health plan without any break. Brokers may not mention this renewability benefit. Being unaware of the continuity benefit, you can lose out on your plan’s NCB and be fooled.

Find out what is cumulative bonus and no claim bonus

• They may not educate you on your plan’s claim process

Another point where brokers might fool you is on the claim process of your plan. Brokers usually promise assistance at the time of a claim and as such might not educate you on the claim settlement process. Thus, you become completely dependent on brokers for helping you at times of a claim and if for any reasons, they do not respond on time, you might face difficulties in getting your claim settled.

Offline Agents

Agents typically sell products from only a particular insurance company. You usually entertain agents if they are trustworthy and you are acquainted with them. While you can benefit from some professional assistance, there are areas where even your trustworthy agent might fool you. Let’s find out what these areas are:

• Does the agent tell you that your plan has a list of exclusions?

Every health insurance plan has a list of exclusions or uncovered risks. Your agent may overlook and avoid mentioning these exclusions, fearing you might not buy the plan altogether. Here you would be fooled because when you make a claim in your health plan, you may be forced to bear the expenses yourself based on the plan’s exclusions.

• Does the agent give you the option of plans from other companies?

As mentioned earlier, the health insurance marketplace offers a wide range of plans. However, your agent represents only one insurance company. As such, your agent would not tell you of other health plans which might be better and also cheaper than the plan offered by him. You might, thus, be fooled to settle on your agent’s plan when there are other better plans available in the market. Moreover, you might end up paying a higher premium since your agent cannot offer you cheaper plans from other companies.

• Your agent may convince you to settle on a smaller coverage.

Agents may fear that if they tell you to buy a higher coverage you might not part with the higher premium. Thus, they may convince you to buy a smaller coverage to ensure a sale. For instance, when you are buying a family floater cover, a higher coverage is always advised. The agent might not tell you the importance of a higher cover and sell you a cover with the lowest premium to motivate you to buy the plan. However, this cover may not be sufficient. Instead, your coverage should be selected based on your requirements, the number of members covered and the increasing medical expenses.

Is the online platform foolproof?

Online web aggregators and comparison portals have now become a popular choice to buy a health insurance plan. However, even on the online marketplace you can be fooled. Here’s how:

• Internet is a public space

Online insurance quotes are available for free and can help you find the right health policy by comparing the quotes. However, be careful while dealing with the online channel. Make sure the website you select is a secured site before disclosing any personal information.

• While a little knowledge is dangerous, too much is confusing!

You can also find every information about different health plans online. This bulk of information has one effect. Rather than educating you, such huge information might actually fool you.

How to avoid being fooled

Despite the pros and cons, you will have to use one of the above sources for buying insurance. Buying insurance is as important as buying a house or a car, but good research and information is definitely required to avoid being fooled. One should evaluate all the options and after being satisfied with the information collected, opt for what suits the best as per requirements. Find out here to understand how to compare health insurance plans.

Your health insurance buying experience would be pleasant only when you are sure that you got the best plan at the best rates. So, educate yourself and be vigilant when you buy a health insurance plan.

Read also An anatomy of an health insurance plan

Read more about Dejargonizing health insurance terms
 
What if you want to cancel your health insurance policy after buying one? Will you get a refund? Check our video below to know more

 
Feel free to share your comments below

Mr. Mehta was happy after he bought a health insurance plan. He secured his finances from the effects of a medical contingency. He was a diabetic and one year later faced hospitalization for a kidney ailment. When he raised a claim, it was rejected. Feeling cheated he inquired after the possible reason of rejection. He was told that his kidney ailment was due to his diabetes which classified as a pre-existing condition. His health plan excluded such pre-existing condition for the initial 3 years due to which his claim was rejected. After treatment he delved into the concept of pre-existing diseases for future references and learned a lot.

Medical contingencies have a way of putting a strain on our finances. The rising cost of medical treatments and the rising incidence of diseases spell a warning for our finances. In these situations a health insurance plan becomes necessary. But does your health plan cover every medical contingency suffered by you?

No, it does not. Every health insurance plan has a list of exclusions. This list states the instances of medical contingencies which are not covered by the plan. Common exclusions include hospitalization due to suicide or self-inflicted injuries, HIV/AIDS, participation in hazardous sports and activities, acts of criminal nature, etc. One such exclusion, which is common to most health plans, is the coverage for pre-existing illnesses.

What are pre-existing diseases?

Diseases or ailments that you already suffer from when buying a health insurance plan are called pre-existing diseases. Common examples of such diseases include hypertension, diabetes, heart-related ailments, etc.

Are pre-existing diseases covered under a health plan?

Your health insurance plan is meant to cover such medical contingencies which are uncertain and unforeseen. Pre-existing diseases, on the contrary are known and their complications are also foreseeable. Such diseases also increase the probability of other medical complications. As such, health insurance plans exclude the coverage for pre-existing diseases. These exclusions can be temporary or permanent.

• Temporary exclusion – pre-existing ailments which have no serious effect on your health are covered by your health insurance plan after a waiting period. If you suffer from any complication related to your pre-existing condition during the waiting period, no claim would be paid. For instance, if you are a diabetic and suffer from diabetic retinopathy (kidney ailment) during the waiting period, the treatment cost would not be paid.
• Permanent exclusions – certain pre-existing ailments might be severe and pose a very high risk of health complications. Such diseases or ailments are permanently excluded from your health plan. For instance, if your diabetes is very high, any complications arising out of it might be permanently excluded from the plan.

Read more about how to fight diabeties

However, complications arising out of pre-existing diseases due to an accident are covered without any waiting period.

What is a waiting period for pre-existing diseases?

Health insurance plans exclude the coverage for pre-existing diseases for a specified period. This period is called the waiting period. If you suffer any complication due to any pre-existing disease and seek treatment within the waiting period, the costs of such treatments would not be paid. There are two types of waiting periods in your health plan:

• Regular waiting period – This is a waiting period for pre-existing illnesses. Different health plans impose different waiting periods. Normally, such waiting periods range from 1 year to a maximum of 4 years.
• Specific waiting period – certain treatments have a fixed waiting period of 2 years after which they are admissible. This waiting period is called a specific waiting period. These treatments might or might be related to your pre-existing diseases. A specific waiting period of 2 years is applicable in all health insurance plans in addition to the regular waiting period for pre-existing illnesses. Some common treatments for which the specific waiting period is applicable include sinusitis, tonsillitis, cataract, hernia, piles and fistulas, etc.

What to do if you have a pre-existing illness?

Though you might feel dejected that your health plan has terms and conditions in place for your pre-existing illnesses, there are ways to deal with such conditions. Here are things which you should do when buying a health plan with pre-existing diseases:

• Be honest – the first and foremost thing to do is declare your illnesses. Though your plan would exclude coverage for your illnesses, temporarily or permanently, you would have the assurance of claim If you do not declare your pre-existing illness and later suffer from it, the insurer would investigate the cause of claim. If it is discovered that the claim is a result of a pre-existing illness which was not declared, the claim would be rejected and your policy might become null and void. So, declare your illness when you buy the plan. Though it might be covered after the waiting period, your policy would at least pay other medical expenses and would be valid.

Also read why your health claim was rejected

• Explore plans – different health plans have a different tenure of waiting period. Explore various plans and find the one with the lowest waiting period.
• Buy young – pre-existing diseases usually occur in older ages. So, buy a health plan when you are young and healthy. That way you could wait out the waiting period when you have no illnesses and get complete coverage when you age and develop such ailments. Also, don’t forget to renew your policy for a continued coverage.

Here’s why you should invest in Health Insurance early

Pre-existing illnesses are not the end of the road. They are simply a road-block. While your health plan would have exclusions for such pre-existing illnesses, it would cover other ailments. So, know the technical treatment of your pre-existing illnesses before you buy a health plan.

Read also An anatomy of an health insurance plan

Read more about Dejargonizing health insurance terms

Feel free to leave your thoughts or comments below

Mr. Vyas always believed himself to be a savvy financial planner. He had a diversified investment portfolio, had substantial life insurance coverage and also had a health plan. The coverage was decent (as per his belief) and he made sure to include each family member under the health plan. Then suddenly Mrs. Vyas was diagnosed with cancer. Mr. Vyas was sad but believed that his health plan would cover the cost of the treatment. It couldn’t. Then Mr. Vyas learned about a Critical illness plan and lamented his ignorance.

Did you know that cancer is becoming a trending illness? Increasing number of people are being diagnosed with one or the other form of the ailment. Other ailments like heart attack, stroke, paralysis, kidney failure, etc. are also becoming a very common occurrence. Do you know the emotional, physiological and financial stress these ailments cause? While the emotional and physiological stress has to be borne by you, the financial strain can be transferred to a health insurance plan. Health insurers offer specially designed critical illness plans to cater to the financial strain of critical illnesses. Before going into the plan, let’s understand what exactly a critical illness is:

Critical Illness

An illness is termed critical or terminal if it has severe physiological effects. Such illnesses can be fatal and require intensive treatments. Moreover, the financial cost of treating such illnesses is also high. Some common critical illnesses include the following:

• Cancer
• Kidney failure which results in dialysis
• Aplastic Anemia
• End stage Liver failure
• Coma
• Open chest CABG
• Permanent paralysis of limbs
• Stroke which causes permanent symptoms
• Multiple sclerosis
• First heart attack
• Aorta graft surgery
• Open heart replacement or heart valve repair, etc.

Critical illness health plan

A critical illness health plan is a health plan which solely covers specified critical illnesses. The plan is also called a fixed benefit plan as it pays a lump sum amount (the Sum Insured) when the insured (policyholder) is diagnosed with any of the covered critical illnesses. Some common features of the plan are as follows:

• Every critical illness plan covers a specified list of illnesses. If you suffer from any one of the illnesses which are covered by the plan only then the plan would pay the benefit.
• The benefit is paid solely on diagnosis of any covered illness. The insured (policyholder) might or might not seek treatment for the same.
• The insured (policyholder) must survive a specified tenure after being diagnosed of the illness to become eligible for the benefit. This tenure is usually of 30 or 60 days post diagnosis.
• The benefit received can be used either for availing treatment or for any other personal purposes.

Difference between a Critical Illness and a normal health insurance plan

A critical illness plan is different from a health insurance plan. The table below highlights such differences between the two plans:

Do you know what your health plan covers?

Critical Illness Rider

An alternative to buying a separate critical illness plan is adding a critical illness rider to a new health insurance plan.

• What is it?

A rider is an additional clause which can be added to an insurance plan to increase the scope of coverage. By adding a critical illness rider to your health plan you ensure an additional coverage (Sum Insured) in case you suffer from a Critical Illness.

• What is included in the rider?

The critical illness rider essentially acts like a critical illness plan but with a lower premium outgo. A specific list of illnesses is covered under the rider. If you are diagnosed with any one, an additional Sum Assured is paid.

• What is the benefit of a rider?

The only benefit of a critical illness rider is that it involves lower premium outgoes compared to standalone critical illness plans. Otherwise, standalone plans are better as they provide additional benefits.

Critical illnesses have a substantial price tag attached to them and a critical illness plan or a critical illness rider helps. So, understand the meaning of a critical illness plan and buy one for enhanced protection against those deadly ailments.

Read more about Difference between health insurance and critical illness

Read more about Difference between Critical illness and life insurance policy

Also, check our video below to understand which is more beneficial cancer cover or critical illness cover?

Feel free to leave your thoughts, queries or comments below

Do you think only hospitalization burns a hole in your pockets? What about the exorbitant costs incurred on tests and consultations before you are hospitalized? Or, for that matter, the monitoring expenses after you are discharged? Anubhav was none the wiser. He had a persistent fever for which he spent tens of thousands on diagnosis. After a stint in hospital (he had cerebral malaria), expenses continued as the infection was regularly monitored from recurrence. He knew that his health plan would cover his hospitalization expenses. But what about the expenses incurred before and after hospitalization? Would they be covered?

A health insurance policy covers almost all types of medical expenses if they are not incurred for a treatment which is otherwise excluded from coverage. Hospitalization expenses, Day Care treatments, domiciliary treatments, organ donor expenses, ambulance expenses, etc. are all covered in every health insurance plan. Among these coverage features pre and post-hospitalization expenses are also included. Do you know what such expenses are?

Besides covering the expenses which are incurred while you are hospitalized, your health insurance policy also covers expenses incurred both before and after such hospitalization. These medical expenses which are incurred before and after hospitalization are called pre and post hospitalization medical expenses. Let us understand them in details:

Pre-hospitalization medical expenses                                                                                  

When you fall sick what do you do? You visit a physician and get consultation for your sickness. The physician might then ask you for diagnostic tests to diagnose your condition and also prescribe you medicines. If, after diagnosis, your physician advises on hospitalization then the expenses which you have incurred prior to such hospitalization are called pre-hospitalization expenses. These expenses include the consultation fees paid to the physician, the cost of medicines and cost of diagnostic tests done for investigative purposes. In short, all such costs leading up to actual hospitalization are termed as pre-hospitalization costs.

Post-hospitalization expenses

After you are discharged from a hospital do your medical expenses stop? No they don’t. Such medical expenses are called post-hospitalization expenses. These expenses relate to medical consultations, medicines and other tests which are done for monitoring your health after you are discharged from the hospital.

Some important points

Both pre and post-hospitalization expenses are covered by your health plan. However, there are some points which should be kept in mind. Here are the points:

• Both pre and post hospitalization expenses are covered for a specified number of days both before and after hospitalization. Pre-hospitalization expenses are covered for either 30 days or 60 days before hospitalization. Post-hospitalization expenses are covered for 60 or 90 days after being discharged from the hospital. The actual number of days for which pre and post-hospitalization expenses are covered depends on the plan.
• Pre-hospitalization expenses are covered only if they are incurred for the disease or ailment for which hospitalization subsequently occurs. Similarly, post-hospitalization expenses are also covered if they are incurred for the disease for which hospital treatment was taken.

Are pre and post-hospitalization similar to convalescence/recovery allowance?

Convalescence or recovery allowance is a lump sum benefit which is allowed if you stay in a hospital for more than a specified period. This period might be 7 days or 10 days depending on the policy. Pre and post-hospitalization are, therefore, completely different from recovery benefits. Let us see how:

Thus, both these terms are different and cannot be used interchangeably.

By now you must have had a very good idea of what pre and post-hospitalization means. Your health plan provides you an exhaustive coverage option and pre and post-hospitalization expenses are also a part of it.

Read more about Top 5 insurance myths that you need to bust now

Read more about How to save money on health insurance

Read more about How to choose a health insurance plan: What do I look for?

Feel free to leave your thoughts or comments below