FLAME Newsletter - September 26, 2012


“So many people spend their health gaining wealth, and then have to spend their wealth to regain their health” - A. J. Reb Materi

We spend so much time in our lives planning ahead for our education, marriage, house, children etc. that we forget ourselves. We tend to forget that if something goes wrong with us, most of our plans can remain unfulfilled. Thus, like a lion first feeds itself before others to ensure he remains strong, we need to first safeguard our health and life to ensure safety and comfort for our dependants.


What You Should Know Before You Sign on for a Health Insurance Policy

Antony Jacob - Chief Executive Officer, Apollo Munich Health Insurance

In today’s fast paced life where all of us are trying hard to achieve targets or meet deadlines, we often tend to overlook nature’s precious gift to us - our health. Changing lifestyles and erratic work hours have given rise to many health issues and make us vulnerable to many ailments and lifestyle diseases.

With an increase in the number of ailments, the cost of medical treatment and advancement in medical technology is also increasing. Health insurance plays a pivotal role in combating the battle of finances, in case of unforeseen events. According to a survey on consumer behaviour, people want to invest their money in something which fetches them instant return, which is reflected in the fact that the decision of buying a health insurance cover is often postponed. However, people have begun to understand the need for buying health insurance as with health insurance, a person can remain hassle-free while considering the various treatment options available for every disease, ailment or niggling health condition.

There certainly are many more health insurance policies on offer in the market today than ever before. Cashless Mediclaim, room rentals, sub-limits, family floater versus individual plans, exclusions, waiting periods – these are all terms that a person should not only be familiar with, but must understand its implications before signing on for a health insurance cover for oneself and his or her family.

One needs to be mindful while choosing a cover, as it is a long term decision. Here are ten easy-to-follow tips to help you while buying the perfect health insurance plan as per your needs.

Get insured at an early age: Health risks increase with growing age and to be applicable for the pre-existing disease coverage, you would need to spend at least three years as a waiting period. Hence, it is advisable to opt for an adequate health cover at an early age. An early start to a health insurance cover would ensure the completion of waiting periods when you may need it the most, following which you can enjoy the full benefits of your health insurance plan. At this stage you would be able to hedge a larger financial risk for efficient treatment at the best healthcare provider.

Coverage: Ensure that you are adequately covered keeping in mind your age, your family members’ ages, higher health care costs, etc. A person in the middle to young age group should have an indemnity cover of at least Rs. 3-5 lakh. In case of a married individual, it would be wise to choose a family floater plan of Rs. 5-7.5 lakh sum insured, covering an individual and the spouse.

Gradual increase in sum insured. It is advisable to increase one’s sum insured level at regular intervals to hedge against medical inflation. You should consider various policies available on the websites of different companies, or speak to your insurance advisor about a policy that is right for you and your family.

Fill up the proposal form yourself: You should always fill up your own proposal form and not depend on agents or any third party. The information shared through the form should always be correct and authentic. You should refrain from hiding any information or overwriting on the proposal form. Inadequate information or exclusion of medical conditions during the proposal time can lead to issues of delayed or non-payment of claims during times of need.

Know the limits and exclusions: You should carefully note the exclusions and waiting periods applicable by various insurance providers. All insurance policies would have broad exclusions and waiting periods for effective coverage. You should always ask for sample policy wordings and go through its benefits, definitions, terms, conditions and exclusions in detail, while comparing policies of different insurance companies.

Claims related limits. Look for treatment-respective limits in the products which basically cap the amount you can claim for a particular surgery under the policy. Such limits would cap your claim, even if you have a large sum insured under the policy. You need to weigh this in, before you sign up.

Read and understand the policy wordings: Always read the policy wordings and documents carefully. Once you take an informed decision and obtain coverage from an insurer, we suggest you read through the policy schedule and policy wordings document. Understand the claim process, document requirement, payment options, special conditions, coverage and exclusions.

Individual insurance policy Vs family floater policy: In comparison to an individual health insurance policy, the family floater option extends cover for the entire family for the sum insured level at a marginally incremental premium. A family floater policy enables and facilitates optimal utilization of the insurance policy.

Hospital network of the insurance company: You should spend time in obtaining the details of the hospital network of the insurance company. You should consider an insurer that has an extensive list of hospitals in its network across cities.

Choose a policy with no sub-limits: It is always advisable to choose a health insurance plan that has no disease specific or expenditure specific sub-limits to avoid situations at the time of claims.  This may be marginally expensive in some cases, but you will hedge larger financial risk and have freedom for efficient treatment at the best healthcare provider.

Opt for additional coverage: You should consider opting for additional covers such as Maternity and Critical Illness that are now offered along with standard health insurance plans. A critical illness rider offers additional coverage for heart attacks, cancer, diabetes, kidney failure, organ transplant or paralysis. In case any of these ailments run in your family, you can benefit from these riders over and above your existing health insurance policy.

Clear all your doubts before taking the final decision: Before making the final decision, take time to read all the documents once again. Ask your advisor or the insurance company as many questions as you can to clarify all your concerns. It will clear any confusion or doubts that may exist.

Once you have ensured that you have carefully pondered over the above points, you will be in a positive position to choose your insurance provider. Congratulations! You are on your way to a healthier and secure future for the years to come.

How to Decide How Much Health Insurance You Need

Suresh Sugathan - head of health administration team operations at Bajaj Allianz General Insurance.

You may be aware that having health insurance is essential, but have you ever wondered just how much insurance would be enough for you and your family? It may have been a mind-boggling decision until now, but it no longer has to be. A few tips may help you decide just what the right health insurance amount for you is.

Take into account your age

Your age is the first thing that must be taken into consideration since it is one of the most important factors that affect your health insurance. An early start is therefore best advised. For instance, if you start at age 35 years or below, then you should start with a sum insured of Rs. 1.5 lakh and increase it by 10%-15% every year. Taking a health insurance policy when younger, simply means, that you get a better deal while paying a lower premium, as you would usually have fewer pre-existing diseases. In addition to that, some insurers also offer plans that are designed specifically for senior citizens or people aged 46 years and above. Such plans come with special features such as a shorter waiting period than the normal health plans. These are therefore some options you can consider, since they meet age specific requirements.

Consider the life stage that you are at

Insurance requirements change as you progress in your life. This is why you should consider your life stage, so that you can have the right amount of health cover. If you are married, you have the responsibility of your spouse, and perhaps children too. In such a case, you will have to get a plan that caters to the possibility of their health problems as well. Thus, you can consider a family floater plan which would cover the entire family under a single policy. As a result, it will also be easy to manage rather than having separate plans for each family member.

Consider any other health insurance cover that you may have

The company you work at may offer you insurance facilities. While this is definitely a convenient benefit offered by employers, it most often is not sufficient, nor is it long-term. You could lose these benefits upon quitting the job, thus leaving you without any cover, especially in a situation where the group cover is the primary health insurance option. It is therefore advisable to have an individual health insurance plan too.

Considering the rising medical costs, especially with new and advanced procedures being available in India, it is advisable to consider a product which can be taken as a top-up policy (with some deductions applicable). Such a plan would give you continuity benefits over your existing policy at a reasonable premium.

Think beyond your basic health cover

While your basic health cover will offer standard hospitalisation benefits, you should think beyond that too and get something that would cater to specific needs for your family. Certain plans that can enhance your health cover, thus making it a comprehensive cover are good options for you to choose from.

Some choices available in the market for a complete health cover are:

  • Hospital cash will provide you with a daily allowance to meet incidentals that are not covered under the health plan
  • Critical illness covers, which also include women specific illnesses
  • Covers for a second opinion with a medical expert
  • Personal accident cover
  • A special plan for senior citizens

Tax benefit

According to the current tax laws, the premium paid towards health insurance is eligible for tax deduction under Section 80D of the Income Tax Act. This can be a maximum of Rs. 35,000 including premium paid for both parents above 60 years. Hence, this is another reason for you to consider a health insurance.

The author is the head of health administration team operations at Bajaj Allianz General Insurance.

Claiming Health Insurance Successfully

One can avail the insurance claims on hospitalisation in two forms, i.e. planned hospitalisation and emergency hospitalisation. Here, we discuss a step by step procedure to claim the health insurance successfully.

This facility can be availed from both, network hospitals and non network hospitals. In case of network hospitals, cashless treatment is possible while in case of non network hospitals, expenses incurred in treatment have to be reimbursed from the insurance company.

Important documentation

The insured gets a welcome kit which consists of the following documents:

  • A Health Card.
  • Claims and Pre-authorisation forms.
  • The following information is needed while processing the claim
  • The policy number.
  • Name of insured person being hospitalized.
  • Nature and details of accident (location, date of accident or commencement of sickness).
  • Name and address of the treating hospital.

Additional documentation required

  • Policy certificate.
  • Claimant's statement form.
  • Claim form duly filled.
  • Doctor's certificate.
  • Indoor case papers.
  • Hospital discharge card.
  • Medical evidence in the form of diagnostic reports, prescriptions, bills with breakup, any other document to support hospitalisation/surgery.

Cashless Hospitalisation in a network hospital in case of Planned and Emergency hospitalisation:

Planned Hospitalisation:

  • Step 1: Call and inform the insurance company/Third Party Administrator (TPS) four days prior to the commencement of the treatment.
  • Step 2: Get a pre-authorisation form.
  • Step 3: Submit the health card along with duly filled pre-authorisation form at the treating hospital.
  • Step 4: The forms are then scrutinized and processed in case of cashless facility.
  • Step 5: Sign the required documents while getting discharged.

Emergency Hospitalisation

  • Step 1: Inform the insurance company/TPS within 24 hours of hospitalisation.
  • Step 2: Collect the pre-authorisation form.
  • Step 3: Submit the duly filled pre- authorisation form and health card.
  • Step 4: The forms are then scrutinised and processed in order to get the cashless facility.
  • Step 5: Sign the required document on discharge.
  • Step 6: The insurance company will handle the expenses and make the payment to the hospital.

In case cashless facility is not possible, the insured will need to pay the bills for the services availed, collect the bills and apply for a reimbursement from the insurance company.

The claim procedure differs slightly when one is hospitalized in a non-network hospital. The procedure is stated below:

  • Step 1: Pay the expenses which have been incurred.
  • Step 2: Collect all the required treatment documents.
  • Step 3: File a claim to the insurance company and submit all the treatment documents along with the bill within 60 days of treatment.
  • Step 4: The claim is processed on verification.

Read more:

Health insurance for your parents

Frequently asked questions on health insurance

Health Insurance is now portable

Common health insurance mistakes

Health Insurance myths broken


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FLAME (Financial Literacy Agenda for Mass Empowerment) is an IIFL initiative to promote financial literacy amongst the masses in order to make them an integral part of India's spectacular growth story.

In an era of accelerating GDP and rising per capita growth, financial literacy has become more critical than ever before such that we all reap the tangible benefits of the nation's economic prosperity. Financial inclusion has been quite high on the governmental agenda, given its emphasis on widening the Banking & Financial services network across the country. IIFL's FLAME initiative stands committed to complement this effort by helping common people gain financial growth and security though better awareness and education on the variety of financial products while avoiding the lure of and loss from unrealistic claims made by unscrupulous agents and ponzi schemes.

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