Insurance Awareness: How to choose health insurance in time of Covid

Lets look at a few questions which come to mind when "insurance" is mentioned, particularly health insurance? It may set some doubts to rest and give new food for thought. After all a few basic insurance policies in your portfolio will only add to your financial security, in these uncertain times.

Will I get a renewal notice at the time of renewal?

You should not expect renewal notices as a matter of right. It is only an act of courtesy of the insurers. It is possible that you may not receive them regularly. Even your regular agent may forget to remind you to renew your policy. Rather, depend on your own system of reminders, electronic or otherwise, for timely payment of renewal premium.

I did not pay my renewal premium in time. How will I renew my cover now?

Don't worry. You can still make the payment within the Grace Period. That is usually a thirty day period, from the date of renewal, within which you should pay your renewal premium. The benefits of your insurance policy will then be restored. Continuity benefits under your health policies, like waiting periods for different diseases, will also remain intact.

However, in case of general insurance policies, the insurance cover will not be in force and your claims will not be paid until the renewal premium is received by the insurer. Hence, please make a note of the renewal date in your personal financial list of things-to-do. Try to make the renewal premium payment a fortnight before the renewal, to avoid complications later on.

How do Free Look Periods help?

Free Look Periods are for you to use judiciously. They are a customer friendly feature in life and some general insurance/ health policies. Make the best use of them. It refers to a period of usually fifteen days commencing from the date of issuance of the policy. Study the policy carefully. You may not have been communicated about all the terms and conditions properly. If you now feel that they don't suit you, then you can immediately ask for policy cancellation, within this period, with only a minimal deduction.

Should I buy the new Arogya Sanjeevani Health Policy?

Yes. And these are the reasons why you can go in for this product: It is a good vanilla-product, a standard comprehensive health policy mandated by the Insurance Regulator. It is a low cost comprehensive health product, with life-long renewability. Apart from the standard coverages, many new age treatments are also covered under it.

There is no difference in the fine print in this policy across all insurers, but there is a variation in pricing. So you do not need to compare terms and conditions of this policy across insurers.

There are two basic variants of the policy. You could opt for an individual cover for each member of your family under this policy. Or you could take a floater policy for your family where one or more persons share a common Sum Insured. The Sum Insured starts from Rs. 1 lakh and goes upto Rs. 5 lakhs. It is an indemnity based product.

A customer-friendly feature of this policy is that the premium can be paid in monthly, quarterly or bi-monthly instalments. In the current environment of pay cuts and job losses, this feature can be quite useful for you.

Though the policy terms and conditions remain unaltered across insurers, the premium varies from insurer to insurer. Find an insurer whose premium is low but whose loss ratio is also encouraging and cover yourself and your family, without any hesitation, if you do not have a health policy yet.

What are the new Covid health policies?

It would be pertinent to clarify at the outset that your standard health policy also covers Covid related hospitalisation expenses. Hence, there is no need to panic.

However, if you do not have a health policy yet or if you are no longer covered under your employer's health policy then you could buy either of these Covidspecific policies. In case you have a health policy with a low sum insured of Rs. 1 lakh or 2 lakhs you could also buy this as a supplementary policy, to cater for Covid expenses, which can be quite high.

Two standard Covid-19 products, have been launched by insurers at the initiative of the insurance regulator. They are Corona Kavach and Corona Rakshak. They have standard terms and conditions across different insurers, albeit with varying prices.

Corona Kavach is a short term Covid-specific health policy covering only Covid related hospitalisation expenses upto a maximum Sum Insured of Rs.5 lakhs. A minimum of 24 hours hospitalisation is required for payment of your claim.

If you are 18 years or above and not yet 65 years of age then you can purchase it for yourself , with or without family. Its main advantage is that it covers a lot of other Covid related expenses like PPE kits and other consumables which may not be covered in your standard health policy. Pre and post-hospitalisation, Domiciliary or Home care expenses, tele-medicine or e-consultation will also be covered.

Corona Rakshak is also a short-term Covid-specific health policy which can give a maximum one time payout of Rs 2.50 lakhs on being detected with Covid. The positive identification of Covid must be from a government authorized diagnostic centre. Claims will be paid only if you have been hospitalized for at least 3 days. The full sum insured of the policy will be paid out regardless of the quantum of hospitalization expenses. You can purchase the policy for yourself if you are 18 years or above and within 65 years of age. However, it cannot be purchased for the entire family, like Corona Kavach.

Please note that there are only variations only in pricing across insurers. Otherwise all general and health insurers are selling this policy on identical terms. Search for an insurer with a good claims settlement ratio and reasonable pricing to buy a product of your choice.

How do TPAs help?

TPAs or Third Party Agencies are entities registered by the Insurance Regulator and licensed to work in the health insurance sector. They have a code of conduct and are engaged by insurers issuing health policies to service clients.

The name of your servicing TPA will be printed in your health policy with their address and contact particulars. Please make a careful note of it and save the number in your mobile phone. Check their website too for the list of network hospitals allowing cashless hospitalization, from time to time.

The servicing of the health policies are outsourced to these entities for a fee paid by insurers. This fee is incorporated in the premium paid by you. You do not have to pay them anything yourself. TPAs run their own 24 hour tollfree numbers for you to report your claim. They also authorise your hospitalization on cashless basis, based on your prior intimation to them.

You will find a TPA Help Desk now, in all empanelled hospitals, to facilitate this procedure.

They also authorise your discharge from the hospital and make the payment as per your entitled Room Rent etc under your Policy Sum Insured.

Reimbursement Claim documents are also submitted to them for processing. Pre and post hospitalisation payments are also processed by them.

Please note that they are not authorised to settle or reject claims. These decisions are made by the insurers and only conveyed to you by the TPA.

What is a floater health policy? Is it useful for me and my family?

A floater health policy is earmarked for families. It is not suitable for single individuals. It is nothing but a cheaper variant of a standard health policy for a family.

It is unlikely that two or more family members will require hospitalization simultaneously. Hence rather than cover themselves separately it is possible to have a single Sum Insured in the policy, for the benefit of the entire family. The hospitalised member then utilises the policy, as per his requirement. The unutilised policy Sum Insured can be utilised by any other family member, during the policy period, as per his requirement, subject to the policy terms and conditions. As a single Sum Insured 'floats' over the entire family, hence the name-Floater Policy.

It is useful, as it is cheaper to cover an entire family under this kind of policy rather than cover each and every person separately.

Which is more useful for me? Top-up Health Policy Or Super Top up Health Policy.

Both Top-up Health Policy and Super-top-up Health Policy cover hospitalization and other related health claim expenses over and above a certain threshold amount. This threshold amount can be your standard health policy Sum Insured or your Sum Insured under your corporate health policy.

Say, your standard health cover is for Rs. 5 lakhs, you could take a Top-up or a Super-top up Health Policy for another Rs. 20 lakhs.(It could even be a floater cover for your entire family). It could have a deductible or threshold limit of Rs 5 lakhs. Then you could enjoy health coverage of Rs. 25 lakhs, in all.

Top-up and Super-top up covers are cheaper than standard health covers, and it is more economical to combine your covers like this, for a high coverage at a relatively lower cost. A standard health cover for Rs. 25 lakhs would be more costly.

To continue with the aforesaid example, the main difference between the captioned covers is that a Top-up Cover will cover expenses over and above your standard health policy, provided that there are hospitalization expenses for an individual claim, which will exceed Rs. 5 lakhs, in all, However, if you have successive claims for say, Rs. 3 lakhs each, since they are each below the threshold limit of Rs. 5 lakhs, the Top-up Policy will not help.

But the Super- top -up Health Policy covers such a contingency. It is thus more useful for customers to opt for this policy.

To sum up, it would be advisable to combine your standard health policy with a Super-top up health policy and enjoy an adequate and affordable coverage, conveniently. A word of caution, try to opt for both policies from the same insurer for your convenience. It would be useful during claims.

Is a critical illness health policy useful?

To debate this point, one needs to understand about the nature of a critical illness policy. A critical illness policy gives a lump-sum payout on detection of a specified critical illness. It could be heart attack, stroke, carcinoma, endstage renal failure, organ transplant, paralysis or blindness in both eyes etc.

Usually, a list of critical illnesses and their severity are specified under the critical illness policy, concerned.

A waiting period of 90 days is specified, from the commencement of the policy in respect of claims. A survival period of 30 days is also required after detection/manifestation of the disease for payment of claims. Medical and pathological reports, along with other supporting documents have to be submitted in support of the claim. The policy comes to a close once the specified sum insured is paid out.

These policies are normally available upto 65 years of age. Their main advantage is that the claimant is usually not required to submit proof of hospitalization. There is no headache of room-rent capping, policy sub-limits, deductions for consumables, policy deductible etc.

The entire sum insured is paid out at one go and can be utilized in any way which is convenient for the claimant. For example, it can be used to supplement hospitalization costs which may have been partially reimbursed by insurers under the standard health cover. It could also be used for medicines and prolonged care at home, air-fares and accommodation costs at other cities for treatment.

Hence, with the propensity for critical illnesses increasing in younger persons and their high costs of treatment, purchasing such a policy (over and above a standard health cover) would amount to good financial planning for financing unforeseen health requirements.

Critical illness riders are also available in many standard health covers and life insurance policies and could also be availed of with some additional premium. They can also be utilised rather than an independent policy.

The writer is Former Manager, National Insurance Company Ltd