In the view of the outbreak of COVID-19, we all are exposed to 1st major risk of our life (i.e. Risk of Illness) out of 3 major risks of our life. You can read more details on the three major risks in below link – https://www.linkedin.com/pulse/manage-your-life-vinod-prajapati/
Most of us live with two beliefs that are “That Everything Happens For A Reason” and “Bad things only happen to others”. This pandemic has made us all realize while these beliefs might help you psychologically a more pragmatic approach would be to ensure you are adequately prepared also.
Ever since the pandemic broke out in the country, insurers are seeing more traction for the purchase of health insurance policies. Insurance Regulatory and Development Authority (IRDA) in a circular dated 4 March said all health insurance policies will have to cover the cost of COVID-19 treatment.
Besides this pandemic, according to a few studies done in the past, the medical inflation in India is around 15% annually, much above the general inflation level. The need for adequate health insurance is increasingly becoming important and so is choosing the right health insurance plan.
Like how you have rationally stocked up essential and avoided venturing out to avoid using exposure. It’s also necessary to review your health coverage for an unfortunate event. We would suggest reviewing your existing policies for few pointers as below –
Estimate How Much of Cover Is Required:
Although there is no simple thumb rule as to how much health insurance is adequate, the coverage should ideally depend on one’s residential city, family medical history, etc. “For people living in Class A cities, the cover amount should at least be Rs 10 lakh given the high cost of living in metro cities. Not only the standard of living, but medical treatment is also quite expensive in metro cities compared with smaller towns.With reference to cost related to Coronavirus, whilst the government allowed private labs to test people for the virus and cap the cost at Rs 4,500, in the case of treatment there hasn’t been any cap issued. According to experts, the cost of treating COVID-19 is expensive due to the antivirals, ventilators, and personal protective equipment kits.
Review of Sub-Limits:
Sub-limit refers to capping the reimbursement limit under each or some of such cost-heads. For example, the room-rent may be capped at 1% of the sum insured. So, irrespective of the total sum insured of the policy, one may have to pay out-of-pocket hospital bills unless the expenses are within the limit. Whilst most of the new health plans with the cover above Rs. 5 lakhs, do not have any such sub-limits. Most of the insurance companies were selling health insurance with sub-limits around 5 years ago. Thus, if you have taken your policy around 5 years before and have been paying premiums regularly, it would more probable to review the terms and conditions with reference to sub-limits.Check for Co-Payment Feature:
While a lot of plans might not have this feature, it’s usually a common feature in Senior citizen health insurance plans. In higher age groups as the premium rates are higher, a co-payment may provide some relief in terms of affordability, as it helps to keep the premium low. Some plans, however, ask for as much as 20% co-payment if the treatment is done at a non-network provider or in a city different from where the plan was bought.Thus ideally recommended reviewing the co-payment clause as you might end up with a high co-payment to save on premium cost.
Delay In Settlement of Claims:
Whilst we all look for claim settlement ratio and incurred claim ratio as they are available readily. Information around the delay in claim settlement doesn’t get usually published in reports, however, it can be checked from public disclosures maintained on individual insurance company’s website. One should avoid taking a policy from insurance companies that have a high number of pending claims for a longer period.There are also other parameters to be checked such as claim repudiation & closed ratios.
While having health insurance is mandatory in today’s environment. We think, ascertaining its appropriateness is even more important to avoid unpleasant surprises in the future.
We at Millionsworth Financial Services, analyze health insurance companies and their policies on multiple parameters keeping our client’s requirements in mind.
We would be happy to review your existing policies and share our findings without any cost till 14th April 2020. Please write us on support@millionsworth.com.
