Last Updated on April 23, 2025 at 9:17 am
Many people have insurance policies from nationalised companies or other private companies purchased 5 to 10 years ago or earlier. At that time, insurance policies were very standardised, and the major choice that had to be made was about the insurance coverage amount.
Over the past few years, private insurers have developed policies with innovative features that cater to the different needs and requirements of various groups. In this article, I am going to discuss a few innovative features that Clients need to check if their policy offers. If those features are relevant to them, it is time to port their policy to a new age policy offering these features.
About the author: Jay Sheth is a SEBI-registered investment advisor and a member of fee-only India because he charges a fixed flat fee independent of the client’s net worth and receives no commissions from any product manufacturer. He can be contacted via his website, shwealth.in
- Policy coverage multiplier: Older policies had a no-claim bonus feature of 10% to 20% per year. This meant if you had a policy of INR 10 lakhs, every year of having no claims would increase your coverage by INR 10 to 20 lakhs up to a specified upper limit. The latest policies of a few companies provide coverage increases of up to 100% per year for a specified number of years. This feature ensures your coverage increases multi-fold to counter the high rate of medical inflation.
- Restore benefit: If your health policy has a restore benefit, it would mean if your coverage is extinguished with one hospitalisation during the year, the policy coverage would be restored to its original amount in case of another hospitalisation during the year. Some policies give a restore benefit once during the year, while some offer the benefit multiple times during the year. In older policies, if you had a coverage of INR 5 lakhs and if your first hospital bill was INR 5 lakhs, your coverage for the remainder of the year would be zero. In a policy with restore benefit, your coverage after the first hospitalisation would again be reset to INR 5 lakhs. This feature is valuable for a family floater policy where multiple members could get hospitalized more than once in a year.
- Coverage for consumables: Expense on items such as gloves, cotton, masks, syringes, PPE kits, etc were never re-imbursed in older insurance policies. New age insurance policies cover these expenses as part of the policy or have to be taken as an add on. If consumables are covered, there is a good chance you may not have to shell out any money for your hospitalization.
- No cap on room rent limit: This critical feature ensures the Client does not have to pay out of pocket during hospitalisation. In older policies, especially from nationalised insurers, there was a capping on the room rent, typically 1% of the insured amount. This meant if you had a policy of INR 3 lakhs, you could take a room for rent of only up to INR 3,000. If the room rent was exceeded, then the Client would have to pay proportionately for the entire hospital bill, even if the overall claim was under INR 3 lakhs. The latest policies instead specify the room you can rent, i.e. single private A/C room, deluxe room, etc, and the rent does not matter. In some policies, there is no restriction on the class of room selected. This ensures that even after a few years when room rents have increased, it would not impact the Client as far as the hospital bill is less than the insurance coverage.
- Premium lock: Premiums increasing every year or a few years once you cross an age bracket is very frustrating especially when you have not made any claims. With this feature, your premium gets locked at your age of entry until you make a claim. This helps save on medical insurance premiums and is also very relevant for professionals who have good corporate insurance and are expected to make claims from their private insurer only when the limit of their corporate insurer expires.
- Robotic surgeries / Organ transplant: Robotic surgeries though not very prevalent right now, could become more common given the pace of technological advancements and adoption of AI. The organ transplant rate is also increasing with advances in medical technology. Given this, it is better to have a policy that covers robotic surgeries and organ transplants, which the older policies would not have a provision for or have a sub-limit.
- Day Procedures: Many older policies require an overnight hospital stay for reimbursement. Medical advancements have made it possible to perform a small procedure during the day and discharge the patient the same day; the latest insurance policies also provide coverage for such day procedures.
Apart from this, there are many more features, such as air ambulance coverage, Aayush treatments, attendant expense reimbursement, number of days coverage for pre and post-hospitalisation, domiciliary treatment, etc., offered in the latest plans of insurance companies. It is essential for clients not just to sit on their old policies but also to re-evaluate their coverage and policy features when the time comes for renewal. Please note that it gets very difficult to port your policy if you have been hospitalised during the year or developed any medical condition.
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