Make the right choice

Health insurers are offering more and more specialised products. Examine all options before you zero in on the cover that suits you best

Written by Suneeti Ahuja | Published: February 16, 2009 12:06:14 pm

Rising medical costs and lack of a good public healthcare system can put you in a spot in case of a medical emergency. Taking a health insurance policy can save you from heavy expenditure in such times. Here’s a brief of the types of plans available in the market today.

Basic plan

As the name suggests,this is a basic health insurance plan that covers expenses incurred during hospitalisation. Besides regular hospitalisation,such policies also cover pre- and post-hopsitalisation expenses,typically up to a month. You can invoke this plan in case of accidents or on contraction of an ailment. However,keep in mind that this plan will not honour claims in case of any pre-existing disease. Pre-existing diseases are usually covered after four years.

No matter how fit we might think we are,it is always advisable to take a cover at an early age. Doing so has multiple benefits like low premium,and 5 per cent bonus on the sum insured up to a maximum of 50 per cent. That means ten claim-free years can bump up your insurance by 50 per cent. Also,it gets harder to get a mediclaim policy as you grow older as rejections tend to be high.

Floater plan

This is the second-most popular variant of medical insurance. It covers the entire family — usually the policy holder,spouse and two kids — as one unit. Consider a family of four aged 33,30,8 and 5. For a floater policy of Rs 3 lakh,the family would have to pay Rs 7,398 per annum. However,if the family buys individual covers,then it would end up paying Rs 12,180.

However,there is a flip side to the floater policy. In case one of the members of the family gets hospitalised,and uses,say,Rs 75,000,then the cover is reduced for the other members.

Critical illness plan

This plan is offered both as a standalone product and as a rider. Critical illness typically offers you lump sum reimbursement upon diagnosis of typically six critical illnesses: heart attack,major organ transplant,cancer,end stage renal failure,coronary artery bypass graft surgery and stroke. On detection of the disease,the insured gets the benefit amount and the policy ceases to exist immediately.

While this plan is cheaper than a basic mediclaim plan,the sum insured could be as high as Rs 10 lakh. For instance,for a sum insured of Rs 3 lakh a 30-year-old would have to shell out Rs 3,100 in case of mediclaim policy; for a critical illness plan the cost would be only Rs 1,000.

Therefore,it is advisable to buy a separate mediclaim policy and a critical illness policy.

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