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: Do not forget these steps after buying a term insurance policy!
1. Understand claim procedures
Whether cashless or reimbursement, insurers must be immediately intimated (within 24 hours typically) upon hospitalisation. The hospital insurance staff will help you if it is a cashless mode. You or your family should do this if you wish to pay first and then reimburse.
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.
Be prepared to fight for claims at any stage. Sure, the guy who sold the policy will tell you, “I will assist during claims”. This requires considerable competence to write effective rebuttals and a reputation for bringing steady “business” to the insurer. Very few sales guys can pull this off.
Develop a strong relationship with a family doctor and ensure all hospitalizations are through them or their recommended experts. This may ensure less hardship for the patient and probably help with claims. All insurers distrust hospitals. So if a treatment course only includes the necessary investigations, insurers will be happy.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
2. Recognise that ‘cashless’ is not a right!
Health insurance comes with a right to claim reimbursement. However, cashless claims are more of a privilege than a right. 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. This implies that one may require a much bigger emergency fund than the recommended “6 months expenses”!
This is an important consideration in the case of top-up policies. We must expect them to be processed in reimbursement mode only (even if both base and top-up policies are from the same insurer). Therefore sufficient liquid net worth is essential. See: Are you aware of this restriction about super top-up insurance policies?
While you must be ready to pay out of your pocket, always try to avail the cashless option. This is simpler and avoids the paperwork necessary to claim the reimbursement. Also, insurers may not appreciate it if we choose reimbursement for admissions in a network hospital due to suspicions of fraud etc.
3. Recognise the impact of non-medical expenses
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 India’s 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 non-medical expenses must 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 during hospitalisations. Be mentally prepared for this.
4. Increase cover or buy a super top-up policy
Individuals with good corporate covers should at least buy individual health covers for parents and in-laws and consider an individual or large floater cover for other family members as per affordability. Of course, a private policy along with corporate cover is always the safest option.
Once this is in place, you can either increase the sum insured yearly (if the insurer would allow it) or buy a super top-up policy as per your affordability. 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 only handle 3L from the first claim. The super top-up will cover 1L from the first claim and 3L from the second claim.
On the other hand, if you only had a top-up with the same deductible, it will cover 1L from the first claim only. 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 25L (self, spouse, son) and 6L for my 75-year-old mom. I made four claims (self, spouse, mom(2)).
In addition, we also have a United Super top-up plan 15L cover for all four of us with a 5L deductible. Hopefully, I will be able to increase this cover for myself, my wife and my son this year. See related links below.
- New features introduced in United India Insurance Family Medicare Policy
- United India launches Super Top Up Policy with 95 lakhs sum insured
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 no claim-based loading, the premium could increase due to other reasons – age of individuals, the risk profile of the entire group covered by the policy, decreasing profit margins o the insurer, 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. Much of this increase was due to an increase in cover. Once, United hiked premiums to cover their losses.
6. What about periodic health checkups?
Most health insurers agree to reimburse costs of periodic (every few years) health checkups. Via Health insurance or not, it is common sense to go for periodic health checkups. There is also a tax benefit (up to Rs. 5000 under 80D).
However, I am not 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 updating the insurer about the present state of health when there is no obligation on your part to do so. I don’t think it is a wise idea. The insurer could use this data to refuse a higher cover in future.
So we recommend paying for a comprehensive master check-up once a year. Avoid using the health insurance policy for this.
7. Recognise that pre-existing clause applies all the time!
Typically insurers have a pre-existing disease clause for 2 -4 years. This applies at all times. 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.
Almost all private insurers offer policies without sub-limits. This is primarily because their market share and claim payment experience are considerably lower than the PSU insurers. So it must be viewed as an enticement to buy the policy. Features are subject to change at any time. The easier it is to buy health insurance, the more cautious you must be!
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.
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!
10. Do not assume portability is easy!
Just because a huge amount has hiked the premium, one cannot port a policy! Only applying for portability is a right. The other insurer need not accept your application! Here is what you need to know before porting your Health Insurance Portability.
Remember that the other insurer may hike the premium for you based on your application or after you port to increase the premium for all much higher than your older insurer! A case of from the frying pan to the fire!
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 7000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 2,500 investors and advisors use this!
Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)