Here is a list of ‘things to do’ after you buy a health insurance policy. These simple steps would aid premium payment, claim application and hospitalization. This post is a companion piece to Things to do AFTER you take a term insurance policy!
1. Understand claim procedures
In the case of emergency hospitalisation and in the case of planned hospitalisation find out the documents and steps necessary to intimate the insurer.
Copy this information from the insurer or TPA’s website onto a word processor, print it and keep it along with the policy document and policy ID card.
2. Recognise that ‘cashless’ is not a right!
A health insurance comes with a right to claim reimbursement. However, cashless claims are more of a privilege than a right. It is quite possible that the insurer may either deny cashless or allow it partially and ask the insured to claim the rest of the expenses via reimbursement after the hospitalisation is complete.
This implies one may require a much bigger emergency fund than the usually recommended “6 months expenses"!
3. Recognise the impact of non-medical expenses
A hospitalisation is not only about paying hospitalisation fees! There is a huge list of non-medical expenses which any patient would incur. According to United Indias TPA, “Non-Medical expenses are: Admission fees, Registration fees, gloves, blade, water bed, food & beverages, extra bed etc.," Read more: Cashless Mediclaim: A Second Person Narrative
Even if you believe that your corporate cover is sufficient, these expenses have to be paid. Even if you believe an amount equal to 6 months expenses is sufficient for an emergency fund (assuming cashless would always be offered), an additional 10-15% of the health cover should be available for use during hospitalisations.
4. Increase cover or buy a super top-up policy
Individuals with good corporate covers should buy individual health cover for parents and in-laws and consider an individual or large floater cover for other family members as per affordability. Once this is in place, you can either increase the sum insured each year (if the insurer would allow it) or buy as big a super top-up policy as you can afford. This is the only way to protect against big ticket hospitalizations and medical inflation.
For example, if you have a base health cover of 3L and a super top of a threshold (deductible) of 3L and cover of 10L.
Now if you incur two claims of 4L and 3L in a single year, the base cover will handle 3L from the first claim only. The super top-up will cover 1L from first claim and 3L from second claim.
On the other hand, if you only had a top-up with the same deductible, then it will cover 1L from first claim only. That is each claim has to exceed the deductible for the top up to kick in, while super-top has a cumulative deductible benefit for the policy year.
In 2006, I got a United India platinum cover for 50K-1L each (self, spouse, mom). I gradually increased the cover each year and today it has grown to 5L (self, spouse, mom) and 4.5L for my son. During this period, I had made three claims (self, spouse, mom). I will be buying a super top this year.
5. Prepare for the next premium
Even if you choose not to increase the cover each year, do not assume the premium will be the same next year. Although IRDA has mandated that there would be claim based loading, the premium could increase due to other reasons – age of individuals, risk profile of the entire group covered by group, underwriting test and perhaps medical checkups too (see below).
Plan for at least a 5% increase for the same cover. Start an online recurring deposit which matures 6-8 weeks before the premium is due. If you are comfortable, you can choose liquid funds or even arbitrage funds or equity savings funds Even if you wish to port your policy to another insurer, it would give you ample time.
Read more: How my health insurance costs have increased over the years
6. Consider periodic health checkups but …
Most health insurers agree to reimburse costs of periodic (every few years) health checkups. Health insurance or no health insurance, it is common sense to go for periodic health checkups (unless you had an overdose of doctors and hospitals like me).
However, I am not too sure it is a good idea to reimburse these costs from the health insurer. IRDA only said, “do not load premium based on claim history". It did not say, ‘do not load, based on health checkup results’.
By claiming a reimbursement, you are basically updating the insurer about the present state of health when there is no obligation on your part to do so. Don’t think it is a wise idea. The insurer could use this data to refuse a higher cover in future.
7. Recognise that pre-existing clause applies all the time!
Typically insurers have a pre-existing disease clause for 2 -4 years. This applies for all time. Let me quote an example from a previous post:
My current SI is Rs. 5 Lakhs. When I was diagnosed withMyasthenia Gravis (the reason I needed the thymectomy), my cover was Rs. 4.5 Lakhs. This means that for the next two years (according to my policy) any hospitalization arising from Myasthenia will have a limit of Rs. 4.5 Lakhs and not Rs. 5 Lakhs. It is treated as a pre-existing disease and the rules that applied when the policy started also apply here!
8. Understand the implications of sub-limits
There is nothing wrong with buying a policy with room-rent sub-limits. The only precaution is to ensure that the room-rent is always lower than that allowed by the sub-limit. This is because every kind of hospital fee (medicines, doctor fees etc.) is linked to the room rent. So if you choose a room rent higher than that allowed by your policy, you will only be reimbursed (or paid via cashless) a portion of the hospital bill.
9. Prepare for shocks!
Take nothing for granted when it comes to health insurance policies. The premium can be hiked for everybody (that is allowed) in case the company faces higher claims.
In order to circumvent the “no claim based loading” rule of IRDA, the insurer may
- either refuse to increase the sum insured
- or permanently exclude health conditions that you claim for in future!
I know, that sucks!
10. Do not assume portability is easy!
Just because the premium has been hiked by a huge amount, one cannot port a policy! Here is what you need to know before porting your Health Insurance Portability.