Best Possible Bet For A Perfect Storm

We often hear our elders say health is wealth. It is imperative to protect our health and that of our loved ones through a proper insurance plan. The best way to acquire a health cover is to opt for the one provided by your employer, but there are drawbacks to it. One of the biggest disadvantage being, the sum insured often pegged at smaller amounts, can lead to lack of assistance during medical emergencies.

The recent guidelines shared by IRDAI on minor modifications in the approved individual insurance products offered by general  and standalone health insurers on certification basis will help in increasing the penetration and distribution of  the health insurance products.

Some major changes include, collection of premium in various frequencies or installments such as monthly, quarterly or half-yearly, which were earlier collected on an annual basis without filing with the regulator. Minor changes can be made in the policy document to bring in more clarity without making any changes in the policy coverage.

The guidelines are a welcome change. “The regulator has allowed the insurers with their previous experience to make changes in the product to help benefit the consumers. These guideline frameworks have also made the implementing process faster for the insurer compared to the earlier long filing process”, says Dr Rashmi Nandargi, Head – Retail Health, Travel and PA Underwriting, Bajaj Allianz General Insurance.

The regulator has allowed additional distribution channels to be introduced for specific products on certification basis. There is a provision to change the premium by increasing or decreasing by 15 per cent, depending on the loss-ratio range. The maximum age limit of the health insurance policies filed is up to 65 years, however, if the insurer feels that the age limit can be extended then it can.

Hence, the best advisable method to tackle such a concern is to buy multiple health insurance plans, which could provide one with a protection of the desired amount and against all illness intended. Dr Shreeraj Deshpande, Chief Operating Officer, Future Generali India Insurance, says, “Multiple health insurance policies can provide wider protection with various benefit covers, higher sum insured, flexibility of waiting periods and exclusions. This can benefit the customer at the time of claims.”

Once you decide to buy multiple policies, you should go through the policy documents and familiarise with its clauses. Experts recommend to buy a fixed benefit policy along with an indemnity policy, which covers out patient department expenses, providing adequate financial security.

An indemnity plan covers the hospitalisation expenses whereas fixed benefit plans (personal accident and critical illness) provide for a big payment for accidental death or disability or diagnosis of any major critical illness like cancer, heart attack and stroke.

Ashish Mehrotra, MD and CEO, Max Bupa Health Insurance, highlights the benefit of buying multiple health insurance plans, “The more health insurance coverage a person has, the better it would be in the long run. If a person has more than one health insurance policy, then it helps in increasing the overall coverage amount. With increasing medical costs, it is essential to keep adequate health insurance coverage.”

Also, one plan may be different from another. For instance, in a given situation, if a medical procedure is excluded in one plan and covered in another, then the customer can choose the appropriate policy for paying the claim. Therefore, opting for multiple health insurance can act as a hedge against rejection of claims. Purchasing a number of smaller covers can add up to a bigger cover, minus the sky high premium amount.

Also, with multiple health insurance plans, one can obtain greater privileges if insurers diversify across service providers. However, not all claims are payable under health insurance plans.

The purpose of a health insurance plan is to provide financial relief at the time of medical emergencies. “An insured can make a claim from group, family floater and individual plans. But in case of multiple indemnity plans, the insured can choose the plan that will pay claim for any hospitalisation (if required). In case the first policy cover (sum insured) is exhausted, then the insured can take rest of the claim from the second indemnity policy,” adds Mehrotra.

Whereas, in case of indemnity and fixed benefit plans, the insured can get claims from both the plans. For instance, if the insured is diagnosed with cancer and goes for treatment, then the fixed benefit lump sum amount will also be payable under fixed benefit policy, along with hospitalisation expenses covered under the indemnity policy.

However, hospitalisation expenses can be claimed only from one indemnity policy. Take for example, the insured has policies from two insurers – A and B, with a sum assured of Rs2 Lakh each and the claim amount is also Rs2 Lakh – then the insured can claim the amount from either of the insurers.

If the amount to be claimed exceeds the sum insured under a single policy after considering the deductibles or co-pay, one has the oppurtunity to approach other insurers  in order to claim the balance amount.

The insurer(s) shall settle the claim subject to the terms and conditions of the respective policies.

An insured, holding more than one policy, must disclose the material health conditions, pre-existing illness and existing policies if any. This will bring transparency and help to settle the claim at the earliest possible.

It is important to keep in the mind that having multiple health insurance plans does not meant one can make claim from all the insurers.

Multiple health insurance policies bring more than the expected benefits. During emergency, such an arrangement not only provides final assistance but over that it provides for the much-required cushion of assurance and mental peace. However, the right method of using it needs to be known in order to ensure proper benefit.

Trying to subvert the rules and lack of disclosure could lead to rejection of claim and can leave  us bare, missing the utmost important financial tools in time  of dire emergency.