Health Insurance Policy Explained - Part II

Health Insurance policies have different built-in features, features that vary from company to company and from product to product. Features are those elements that are in-built into a policy, while covers are additional elements one can opt for. As an analogy, let us say you are considering a phone with a built in camera and an option to add a memory card for external storage. The camera is the “feature” in the phone and the external card option is the “optional cover”.

Let us discuss some features in Health Insurance policies today. Some are useful and some are quite superfluous. The decision to select these features must be based on your life situation and your personal preferences.  

Policies that Pay/Permit/Arrange Health Checks: Periodic health checks are useful in today’s context. Insurance companies pay for these checks. These are usually part of the features within a policy. However most companies will require continuous insurance for at least 2/3 years before one can avail reimbursement for a health check-up. Amounts reimbursed can be much lesser than what you would normally incur, hence it is important to know limits. Certain companies specify the hospital where you can get this done, the number of members who can avail this feature, and the kind of tests that you are eligible for. If pre-arranged, this option is especially useful because no cash need be paid up front. We feel this is a useful feature to look for in your policy.

Policies that Allow a Non-TPA Discount: Most insurance companies have tied up with third party associates (TPAs) to help them process claims. It is obvious that a fee needs to be paid to them by the company. Thus if you opt to not use the TPA’s services, and deal with the insurance company directly, you can get a discount in the premium. We are divided in our opinion on this issue: you may save some time if you use the TPA, however the TPA does not do any function which you personally cannot execute.

Policies that Permit Optional Deductibles: Insurance companies are happy to insure clients that have a skin in the game. If you opt for a deductible, which are usually fixed amounts, the insurance company will reimburse claims for amounts over and above the fixed deductible. For example, let us say that you have opted for a fixed deductible of Rs. 10,000. If you have a claim for Rs. 12,000, the insurance company will pay you Rs. 2000 only. If your expenses in hospital were Rs. 8000, there will be no reimbursement from the insurance company. Deductibles can be per claim or per policy. Choose deductible plans wisely, depending on your life situation. Premiums can be significantly lower; however claims could see you going out-of-pocket.

In our next blog, we shall discuss “nice-to-have” covers.

You can find the best health insurance policies for you   at www.policylitmus.com.

Amit KumarHeart