One of the most frequently used insurances of all, the health insurance also involves a lot of terms and conditions which most of us must understand.
Here are a list of such terms that every owner must understand before buying a health insurance.
If you have an employee health insurance there are a few information about how you can migrate it to personal health insurance if you think of taking a break in your career.
Copay
Many cheaper health insurance have a copay clause with 10-30% copay. What a 10% copay really means is that for every 100 rupee spent through health insurance 10 is spent by you.
Most of the employee health insurance that you get from your employer has this copay clause in it. To put things into perspective you should always have the copay amount in liquid form for your health emergencies and that is the reason I don’t like such kind of insurance.
Because for ₹5,00,000 health insurance with 10% copay you need to have ₹50,000 in cash to claim the entire sum. This defeats one of the most important Benefits of having a health insurance is that you can put your money to better use or investments.
But if it’s an employee health insurance there is little you can do. I would suggest to have the copay amount in a very liquid forms like debt (FD, MF etc)
Family Floater
This is a kind of insurance where the entire family of say 4 is given a limit say ₹5,00,000. The problem is that if you have an elderly in this insurance plan or if a member is suffering from a long term ailment they may end up using most of this limit with other members having almost no insurance.
That’s the reason I would prefer individual insurance for every family member. But such family Floater insurances end up saving a lot of money for a usually healthy and active family. In this case you can increase the insured amount, but arriving at that number is difficult.
Also if a family encounters a communicable disease it might end up straining your family floater insurance beyond your normal insured amount.
Pre Existing Illnesses
Having an illness like asthma or more serious forms of illnesses of heart is generally covered after a waiting period of 2-4years. These are classified as pre existing illnesses.
However your group insurance that is provided by your employer generally has pre existing illnesses covered from day 1. Therefore the employee health insurance covering pre existing illnesses even with a copay is very beneficial.
Declaring Pre Existing Illnesses
If you are unsure that your illness comprises as a pre existing illness or not, correspond with the insurance provider over a mail asking if your illness constitutes a pre existing illness.
Never ignore this part as the insurance providers are empowered to deny your claim later if they find that you did not declare your pre existing illness.
Another point to keep in mind is that the insurance provider will try their level best to deny your claim before approving it. So if you have a pre existing illness of say lungs, anything remotely related to lungs may be attributed to your pre existing illness and your claim will be denied.
So it is important that you have enough cash for treating such illness during your waiting period. That is the reason you must migrate your employee health insurance to yourself for such a time period that your personal health insurance doesn’t cover it.
Migrating Employee Health Insurance to Personal Health Insurance post termination
You can continue having a health cover provided by your employer after you resign from the company by paying the premium yourself.
However a few of the clauses change when you migrate this policy. Pre existing illnesses are not covered from day 1 but the waiting period can be wavered by the number of years you have held the policy for.
Example if the pre existing illness waiting period is 2 years and you have been an employee for 2 years and the company has not changed the insurance provider for that period you get the pre existing illness cover from day 1.
You can also upgrade this insurance to suit your needs. Just keep in mind to ask for what clauses will be changed when you upgrade it. Because at many places the upgraded amount may not come with the waiver of pre existing illnesses.
Critical Illness Insurance
Unlike your general health insurance that covers most of the illnesses where you are admitted to hospital for more than 24hrs or some illnesses that do not require hospitalization, the critical Illness Insurance covers only some expensive and life threatening illnesses like organ failures, cancers or organ transplants.
These insurances have very high insured amount to the tune of ₹ 10 Lakhs to ₹ 1 Crore. The reason for that is because such illnesses are quite expensive.
In my opinion your employee health insurance along with a critical health insurance should cover most of your health needs.
Many employers now a days provide a critical health insurance over and above your health insurance. Read your health insurance policy to unlock these benefits and plan accordingly for such illnesses.
If your family has a history of such illness look up the cost of treatment and ensure that you have the required insurance to tide over such times.
Hope this helps, in case you feel that I missed any important section of health insurance feel free to add it in the comments. I will try to keep this one updated.