How to choose Medical Insurance Policy ?

Does premium amount guide your decision on whether to buy a medical insurance policy? No. Premiums are not the only factor to consider when buying a medical insurance policy. These factors need to be taken into consideration before looking at the premiums.

1# TPA (Third Party Administrator)

These days, companies have an in-house settlement process and thus do not outsource their settlement processes to outside TPA’s. Why do we need to look at a companies providing an in-house settlement process? This is very much-needed in case of cashless settlements. Settlement processes are easier when handles in-house. Also make sure, that the company’s in-house settlement process is in your own city or in your own state. (TPA list in India)

Some of the General Insurance Companies having In house TPA’s are :

  • Bajaj Allianz General Insurance Company (Basic)
  • Star Health And Allied Insurance Company
  • ICICI Lombard
  • Max Bupa Health Insurance

2# Network of Hospitals

The next really important factor, is the network hospitals of the company. In case of a hospitalization, the hospital that you would visit should be there on the Insurance company’s network hospital list. Not only the number, but the quality of the hospitals should also be taken into consideration.

Eg:- If you fall ill and need to get admitted, which are the first few hospitals that you would go to in your locality? Check, if these hospitals are part of the Insurance company’s network hospital list.

3# Relation of the Insurance Company with the Network Hospitals

It’s important to note, how fast the Insurance company/TPA makes the settlement with the Hospital in case of cashless hospitalizations. This is a major factor, but only few of us understand its importance. The Insurance company may provide us cashless hospitalization, but if the Insurance does not settle the Hospitals claims on time or only has a partial payout, then there’s an increasingly likely that the hospital will increase your bill to claim the amount. If the company pays the claims on time and in full, then the Hospital would not try to increase the bills as they know, that particular insurance company is a prompt paymaster.

See how your Life + Health Can be covered for less than 5% of your salary

Family Floater or Individual Cover Policy ?

For people who do not understand Individual and Family Floater Policies please read about it here. Most of the people think that Family floater’s are always the best choice compared to Individual health plans, which is totally wrong. Your requirement and your situation, should guide your decision, on which kind of cover, you should choose. There are many problems which buyers do not have any idea of. They do not care to read fine prints and get nasty surprises after many years and at crucial junctures. (compare Health Insurance)

Features of Family Floater Policies

  • Turns out to be cheaper for younger families and less maintenance, as there is just one single policy for every one .
  • Limited cover for other members in family, if one person claims health insurance in any given year .
  • The Policy expires on the death of the oldest member of Family or if he/she reaches the maximum age of renewability, depending on the policy. So other family members will need to take a fresh policy, without having the benefit of their claim history and pre-existing disease coverage that comes from continuous renewal of the policy.
  • Only immediate family members are included in the policy, not your parents or siblings. So it does not suit people with dependent parents or siblings in family.
  • When Children turn 25 , then they are not part of policy and will have to take a fresh policy. Apart from this, any pre-existing disease will not be covered at that time .

Features of Individual policies

  • Extra maintainance of each policy separately.
  • Turns out to be generally costlier than Family Floater plans
  • Lower coverage for each family member at the same cost of Family floater in case of single claim in any given year.
  • There are no age restrictions on the maximum age for the members for renewable.
  • You can avail the benefits of Loading and Discounts until the policy lapses.

Hence, a Family Floater will not suit a Family where the oldest member is in his 40’s and they are more prone to health issues. However, younger families might want to consider Family floater plans as they are less prone to health ailments and can afford lesser premiums in the beginning. Look at Harsh Roongta talking about Family Floater Vs Individual Plan in following Video

How much of Sum Insured would be sufficient ?

Do you know, what disease you could be diagnosed with tomorrow? So you can never say that Rs.1,00,000 cover is sufficient :) The basic rule here, is to take whatever you think you can afford. If a person can afford say Rs.5,000/- as the premium per year, check as to how much of Sum Insured he would get, and take the amount of insurance offered. That would be sufficient to cover at least some risk. So never think, that you cannot afford any medical insurance policy. Take what you can afford, so that at least you know that you can be rest assured, that you have covered some risk.

IMPORTANT: It’s never too early to take medical insurance and critical illness policy, because once you are diagnosed with any illness, then the insurance company will have the liberty, of not issuing you an insurance policy. So take it as early as possible and have your risks covered.

Comments ? What are the other difficulty or doubts from investor point of view to select a medical policy ?

190 CommentsAdd Comment

  1. Sharon

    I have recently taken a policy from BOI, National Swasthya Bima Policy. i wanted to know how their claim settlement process. Has anybody had an experience of the BOI policy claim settlement ? please share

  2. kamlesh M shah

    My age is 61, My wife age is 58 [BOTH RETIRED ] &my son 23; as per IRDA rules & regulation,what is the Best medical insurance policy.Is it better to have individual policy or flotter policy is advisable. How much amount of premium cost to by from Bank of baroda?Let me know about PNB mediclaim policy.

  3. vasantha n k

    Dear Sir,

    I need some clarifications from you, please help.

    My brother has taken mediclaim policy from National Insurance Company Ltd. (tied up with State Bank of Mysore for his customers) since my brother was having savings bank account with SBM. After expiry of 3 years renewal, they told my brother that they have cancelled the tie with SBM, hence, we cannot renew the policy. Policy was in force from 4.11.2009 to 3.11.2012. They have not intimated in writing about the tie-up cancellation. Afterwards, since he is having an SB account with Canara Bank, he has taken a policy from United India Insurance Company Ltd. (tied up with Canara Bank for his customers) w.e.f. 15.11.2012 and got renewed from 15.11.2013 to 14.11.2014. But he has paid the premium amount of Rs.4875 on 9.11.2012. My sister-in-law was hospitalised due Heart Attack on 21.2.2014 at Hassan and shifted to Mysore for Angiogram and Angioplasty at Mysore and totally we have spent around Rs.2.55 lakhs. Which was intimated to United India Insurance Company Ltd. on the same day. After submission of bills for claim, now they mentioning that since, you were having Sugar from past years, since policy switched over from National Insurance to United India gap of (3.11.2012 to 14.11.2012) 11 days, you are not eligible. Still we have not received any communication from them. Are we eligible for Claims. Can we approach court of law. Can you suggest suitable mode of getting the claims.

  4. HARSHA

    Hi Manish,

    I want to buy a reliable and efficient Health Insurance for my mother (aged 59) in India. Following are some of the key requirements to be included as a part of Insurance package:

    1. On-call Doctor availability – At any point of time, 24/7, the doctor / physician must be available to visit Home. Further, regular check-ups to be done at Home

    2. Percentage of Claim settlement to be high

    3. The policy must not come with too many pre-existing disease clauses

    4. Cashless settlement even in the case of Consultation fees and medicines

    Please advice suitable Health Insurance policy along with Annual Premium rates. Thanks

    • Hi Harsha

      I must say that you are over expecting things here, you are “demanding” things . It does not work like that. There is no policy which will fit in your requirement. Health Insurance is just a protection cover, not a facility provider .

      1. This point is hospital specific, not health insurance specific
      2. Yes you can choose a company on this parameter
      3. Again, this is not what you can demand, all the companies have a standard list of pre-existing illness clause
      4. Thats not possible

      I suggest you read this article – http://www.jagoinvestor.com/2014/02/health-insurance-exclusions-waiting-period.html

  5. SONU

    Hi Manish,

    To bother you again –

    Suppose we have taken floater policy for Husband-Wife (2 Adults) and policy does not cover new born child automatically.But we want immediate cover in the same floater policy. Will it be allowed with paying extra premium difference of (2A + 1C) to that of (2A) immediate in same policy year or we have to wait till next renewal ? Any condition of minimum age entry is to be fulfilled in such case ?

    Thanks always.

  6. SONU

    Hi Manish,
    Hats Off !!! So such bundle of hidden facts & situations regarding health insurance policy.

    1) Is there any policy that cover new born child automatically ?
    2) Can that cover the expenses due to pre-born baby to keep in NICU like charges ?
    3) If yes for above, Will above expense be covered if pregnancy is due to result of IVF i.e. child is test tube baby (I know that NO policy covers the charges for cause of such birth i.e. IVF treatment charges)
    4)Min. waiting period in such policy.

    I have heard that Star Wedding Gift has some features but not sure.

    Can anyone throw light on matter as thinking for IVF… Already I have gone Hydro laparoscopy two years back.

  7. Naveen

    Hi Manish,
    I would like to buy health insurance for my family (4 lakhs, 2+2). I need you suggestion on below policy
    Religare (Premium 10226)
    Oriental Family Floater Silver (Premium 7607)
    PNB Oriental Royal medical policy (5780)

  8. srinidhi

    I would like to buy a Health Insurance ( family floater sum assured 2 lakhs )for my family members consisting of self (aged 24) , father(aged 64) & mother (aged 55).
    I also wanted choose Mediassist as Third Party Administrator (TPA)
    anybody suggest me which one should i select ??
    Following Banks have this option for low premium
    Syndicate, Bank of Baroda, Canara, Bank of India can i believe in above bank policy

  9. Ashish

    Hi Manish,

    I am planning to buy Mediclaim policy and i have zeroed on LT Insurance classic with CI included and room rent waived.

    My Queries:

    1) Do family flaoter plan tranfers the policy to the family members incase of the death of the proposer? Is this point covered in LT’s classic ?I couldnt find anything in policy wording or on website.
    If yes, wouldnt it make sense to not to go for an individual policy rather a family floater policy.

    2) Your take on company and policy, Claim settlement et al
    3) YOur take on 10% co-pay feature after 80 years.

    Regards,
    Ashish

    • Ashish

      1. No

      2. there is a good review about the policy overall , but there are other good options also like religare Care , Apollo .. did you look at those ?

      3. I think its overall good ..

  10. AMRESH KUMAR CHAUDHARY

    I am 29yrs old, My wife is 31yrs old and My son is 6months old. I am searching family floter health policy for my family. Please suggest me which is the better in Apollo munich easy health stander and Max Bupa heart beat.

    Please help me by reply…………

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