What to do if health policy is discontinued?

Earlier this month, Bank of India (BoI) sent a letter informing its customers that the National Swasthya Bima Policy of National Insurance Company that they had purchased from the bank would no longer be available to them. This was a customised retail health insurance specially designed for BoI's bancassurance customers.

In its place, the bank is offering customers a choice between two products of National Insurance Company (the original insurance partner), namely, National Parivar Mediclaim Policy and National Mediclaim Policy.

Since BoI has also tied up with New India Assurance, Reliance General Insurance and Star Health & Allied Insurance, customers have the option to choose between health insurance products of any of these companies as well. The new tie-ups are following the opening up of insurance distribution, wherein banks can tie up with three general insurance companies and one specialised health insurer.

This definitely means more choice for customers. But there are certain conditions that customers must keep in mind while choosing a new insurance plan or a new insurance company.

According to Vaidyanathan Ramani, head - product and innovation, Policybazaar.com, "For customers, it is a matter of two choices - either they had something and now want the same features, or now that they have a choice, can they get something better? Most people want a continuation of what they had before."

When you look for a new policy from the same company or a policy from another company, there are five predominant factors that one should look at:

Sum insured

Sometimes, the sum insured in your existing policy will have bonuses. Since you are buying a new policy, one must ensure that the new sum insured is better than or at least equal to that of the original policy. The old balance with the bonus may get changed into base amount in the new policy, so your premium could increase since now you have a higher base amount. But the advantage is that any new bonus you get is over and above that.

Coverage terms, room rent

Look for coverage terms and what the exclusions are. This varies from company to company. Some policies may cover certain chronic ailments, while others may not. So be clear about that before you select the plan.

Also, look at room rent. Most old policies had a cap of 1% on the room rent. This means that all other charges, such as doctors' charges, charges for diagnostic tests, etc, were capped as per the room rent. However, most new policies have done away with this condition. So you can select a policy which does not have a room rent capping.

Co-pay/deductible

Check if the new policy has any conditions with regard to co-pay or deductible, especially for senior citizens. If so, then be prepared to pay from your pocket or select another policy.

Waiting periods

Waiting periods for pre-existing diseases are very crucial. Customers get continuity benefits while shifting the policy. But there could be a case where the old policy had, for example, three years of waiting period, of which you have served two years, but the new policy has four years. So you may have to wait for two more years to get coverage for the ailment.

OPD benefits

Not too many of the older health insurance policies had coverage for out patient department (OPD), whereas many new policies offer it. So customers can check if the new policy offers it and choose accordingly.

Hospital network

While choosing the policy, the network of hospitals for cashless treatment is another important thing that customers should look at, said Anand Prabhudesai, co-founder of online insurance aggregator Turtlemint. "Check if the network includes hospitals in the city or town you live in. If not, you will not get cashless treatment but will have to apply for reimbursement, which could take time,'' he said.

"The choice is between continuing with new policies of the same company and choosing a new company. If customers opt for the former, then they will get all continuity benefits. But if they choose a policy of a new company, then it is a case of portability and rules of underwriting will apply. The new insurer may even ask customers to undergo a medical check-up before issuing the policy. In such a case, if there is not sufficient time, I would advise customers to choose one of the two policies of the existing insurer for now and stick with it for one year,'' Ramani said.

TAKE YOUR PICK

• National Insurance Company’s customised product for Bank of India customers, National Swasthya Bima Policy, has been discontinued
   
• It has been replaced with National Parivar Mediclaim Policy and National Mediclaim Policy
   
• Customers can also choose from products of New India Assurance, Reliance General Insurance and Star Health & Allied Insurance