Take a medical cover early in life

Age is no bar for illnesses and accidents

MUMBAI: The concept of medical insurance needs no introduction. Anyone whose family member or friend has been admitted for illness or accident would probably be aware of the financial stress that accompanies the emotional trauma. Yet, it is amazing how few people are actually adequately insured for medical care for themselves and their families. This may have to do with the myths about medical insurance that people harbour.

Myth 1: I am too young for a medical cover
There are three reasons why nothing could be farther from the truth. For one, age is no bar for accidents.

Second, it is likely that you have other dependents (children, elderly parents,), who are more vulnerable to illness. It is convenient then to cover the entire family under a single plan.

The third reason is slightly more involved. Mediclaim policies do not cover pre-existing illnesses. However, if policies are renewed continuously without a break, any illness that develops subsequent to commencement of the policy is also covered. Thus, it makes sense to start your cover when you are hale and hearty.

Myth 2: My long-standing cover should suffice
People often have long standing policies that provide covers as low as Rs 20,000-30,000. While this may have been a good policy in the early 90s, the healthcare costs in the last decade have galloped. Moreover, the probability of illness and cost of treatment rise with advancing age. Thus, a cover of at least Rs 2-3 lakh would be prudent.

Myth 3: Application process is time-consuming
In today’s fiercely competitive insurance environment, companies have made the application process painless and simple. As an applicant, all you need to do is fill up the application form and provide proof of age.

Health check-up, if applicable, is freely arranged for by the insurer at a location convenient for the applicant. Policy renewals are straightforward and require not much more than a signature. If you miss renewal premiums and allow the policy to expire, then reviving the policy would require medical tests again.

Family floater policies cover all members of the family, thereby reducing the documentation and involvement needed. In this case, the insured amount of, say Rs 5 lakh is available to one or more members of the family, who need to be hospitalised and treated. For the member who contributes the premium, an income tax benefit of up to Rs 10,000 of premium p.a. (Rs 15,000 for senior citizens) is available.

Myth 4: There are too many hassles with claims processing
Yes, it is true that claims processing requires a diligent process of going to approved hospitals, preserving bills and getting requisite certificates. It is also true that disputes arise on the nature of the disease. However, several insurance firms have now made claims processing smooth and with minimal hassles. There are insurance ombudsmen who are known to speedily and effectively resolve any dispute.

There are mediclaim schemes that pay a flat compensation on illness or accident. They are distinct from reimbursement type Mediclaim policies in that they do not require detailed bills and reimbursement. On diagnosis of a disease among the covered set or on accident, a flat amount is paid to the insured, irrespective of how much he/she spends on the actual treatment.

This further reinforces the point that mediclaim should be started before a person contracts any chronic illness. If a person starts a mediclaim policy after contracting diabetes, it is not uncommon for the insurer to attribute almost any problem to diabetes and thereby disqualify claims.

Now, policies are available that cover hospital room and operation theatre charges, diagnostic tests, cost of medicines, blood transfusions, oxygen cylinders as well as cost of appliances like pacemakers, artificial limbs, etc. A majority of policies cover medical expenses 30 days prior to hospitalisation and 60 days post-hospitalisation.

It is important to know the terms of the policy while entering into one. Pre-existing illnesses and those that occur within the first 30-90 days of a new policy are excluded. Insurance firms exclude any illness where the patient may try and delay the treatment till he starts an insurance cover - since this obviously defeats the spirit of insurance.
 
Diseases like cataract, benign prostatic hypertrophy, hernia, hydrocele, congenital internal disease, fistula in anus, sinusitis and related disorders are excluded in the first year. Use of intoxicants is not covered; and many schemes exclude terrorism/ war related cases, too.

In summary, a mediclaim policy for an informed policyholder is a great protection against unforeseen expenses on the health front.

www.parkfinadvisors.com info@parkfa.com