While claiming money from insurance companies during hospitalization, you’ll hear reasons like:
- This is not covered
- Or better still this is covered only after ‘x’ years
- You have overspent; your eligibility was only this – so that’s all you’ll get. (Nobody in the world can understand that calculation)
Premium – This is what you pay
A premium is the “fee” you pay to remain covered in your insurance plan.
Normally, good things don’t come cheap. The cheapest available plan may not be the best one for you or your family. Always look at the premium in return for the benefits or the coverage you get.
Sum Assured – The max you can get
Sum Assured is a fairly simple concept, once understood. As the words suggest it means the maximum the insurance company will pay under all possible heads in case of hospitalization. The heads range from treatment, procedure, or surgery expenses, to room charges at the hospital, to
follow-up treatment after discharge from hospital, ambulance charges etc.
No Claim Bonus – Ensure you get your freebie
Think of no claim bonus as a gift for being a good kid. You don’t do anything bad and still, get a gift. So, you don’t get unwell and don’t claim, you get discounts on your premium or a free increase in cover. This is calculated every year. Every year that you don’t claim, you get a discount ranging from 5% to 50%. Some companies now double your cover in approximately 2-3 years. Medical inflation in India is about 15%. So roughly the cost doubles 4-5 years. A free increase in cover is priceless.
Waiting period & Exclusions – Insurance Company says ‘Don’t cheat us’.
Another important aspect to remember is that none of the health insurance plans ‘start immediately after’ you buy them. This means that all companies make you wait for a defined period of time before you are eligible to claim. This is called the “waiting period”. The waiting period is of various types-
- In the initial waiting period, which is the first 30 days, you remain out of cover in spite of buying the policy, except in the case of hospitalization due to accidents. You can’t fall ill, then buy and then claim. This so that people don’t game the system.
- Exclusion waiting period- Once your cover becomes active, certain procedures or disorders are not covered for a specified period of time- usually 2-3 years. A few of them are cataracts, fibroids, appendix removal, hernia removal, etc. This is for conditions that probably do not require immediate attention and can be lurking for years before you treat them. So, the waiting period clause is to defend the Insurance Company from fraudsters. This waiting period can be as high as 4 years for conditions that already exist (pre-existing conditions) before buying an insurance plan.
So, if you have suffered from any of these or have a family history – check what is not covered and for how long. Don’t assume or ignore, it might bite you.