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Why Your Health Insurance Cover Could be Insufficient?

dateKnowledge Centre Team dateAugust 02, 2021 views114 Views
Health Insurance Plan | Buy the Best Health Plan Online

Life is full of uncertainties. In the journey of life, you may come across some unplanned turns. The best way to face unexpected events in life is to be prepared for them in some way. When you are prepared, the impact lessens since you have resources to handle the situation.

One such unexpected situation that you may come across is health emergencies. In a health emergency, you have to:

a) Arrange a large sum of money
b) Arrange money in a short time
c) Use your health insurance plan

Different Types of Health Emergencies

Health emergencies are of multiple types depending on the cause. For example, the following three are most common types of health emergencies:

a) An illness which needs hospitalization and treatment
b) Accidental injuries disabling the bodily functions temporarily c) Life-threatening diseases with unpredictable growth and treatment results

The first kind of health emergencies may need you to be hospitalized and will include the cost of hospital care as well as medicines and surgeries.

Accidental injuries may require only monitoring and in severe cases emergency surgeries. For the time of recovery you will need to stay home and away from work for a while.

Both accidental and normal hospital emergencies are covered by your Health insurance. Health policy will either reimburse part of your bills or simply offer a cashless treatment benefit. However the life-threatening emergencies may cost a lot more than the other two.

The treatment cost of life-threatening health emergencies is higher than other two emergencies. For example, the cost of open-heart surgery can be somewhere between Rs 1.75 lakh to Rs 4.25 lakh in a private hospital in India. Cancer is another health emergency that can break you financially if you are not prepared for it. Depending on the type of cancer one has, the cost of treatment can range from Rs 1.75 lakhs to Rs 5.5 lakhs.

Learn when is the right time to buy a health insurance plan.

How To Prepare For Life-Threatening Health Emergencies?

Your entire emergency planning is to handle such emergencies only, and it has three important parts to it:

a) Emergency Funds
b) Health & Life Insurnce plans
c) Line of Credit like bank credit cards etc.

While emergency funds can take care of your family’s important needs and household expenses while you recover, the insurance will take care of the medical costs. However, in the case of critical illnesses, your Health and emergency funds will not suffice.

Critical health insurance plans can help you tackle such medical emergencies better. Here’s why:

a) Defined benefit on diagnosis
b) Amount covers all needs and you are free to use it for treatment and other expenses
c) Provision for long-term regular income for family

What Does a Health Insurance Plan Cover?

Health insurance cover is a good option to deal with basic health-related issues. If you have one, you should know its benefits and limitations. Health insurance offers you specified financial protection against health-related expenses. In general, a health covers the following:

1) The cost of hospitalization that includes room charges, oxygen cylinders, tests, etc.
2) Day Care treatment cost, when you don't need to be hospitalized and released in less than 24 hours
3) Consultation and doctor fee

Health insurance will cover a part of the cost of treatment. For example, if you spent Rs. 10,000 on a treatment for a covered diease

Critical Illnesses & Treatment Costs

Critical illnesses such as heart diseases, kidney ailments, stroke, etc can come unannounced anytime. The approximate cost of treatment for some of the critical illnesses are as below:

1) Angioplasty: The angioplasty with a single stent can cost you between Rs 40,000 and Rs 2.5 lakhs, depending on the city you take treatment and the type of hospital you get treated.
2) Kidney transplant: The cost of a kidney transplant for both the donor and patient can be as high as Rs 7 lakhs.
3) Stroke: The cost of treatment in case of a stroke can go up to Rs 10 lakhs. It can vary a bit depending on the hospital and the technology used.

These numbers should give you an idea where the need stands compared to the normal Health cover.

How Will a Critical Health Insurance Work?

It provides you with a lump-sum amount in case of covered life-threatening disease. Health First plan is one such critical health insurance plan where you get the following two cover options:

- Major critical illness plan
- Specific Critical Illness covers for Cancer and Heart

The Major Critical Illness covers 26 pre-defined critical diseases in advanced stage. Before the insurance cover starts working for you, you need to select the plans:

1. The Health First Plan’s Major Critical Cover comes with two cover options

A. Level major critical illness cover
B. Increasing Cover (preferable to keep up with the inflation)

2. Return of Premium Option: Critical health insurance is a pure protection plan. Meaning, if there is no claim until the maturity, the policy simply expires without anything in return. If you choose this option you can practically ensure a free of cost protection in case the policy happily expires.

3. Regular Income Option: You can also choose the Monthly Income Benefit option that will give you 1% of the initial sum assured every month for 5 years after you are diagnosed with a disease. This benefit will be important for your family if your income is affected due to the illness.

Once you have the policy in force, here’s how both covers will work to protect your family financially in case you are diagnosed with a covered illness:

(Assuming you select an increasing cover option and regular income benefit under both the plans)

Major Critical Illness Specific Cover for Cancer or Heart Ailments
Cost of the Cover A nominal annual premium is payable for a large cover amount.
e.g. Approx Rs. 320 p.m. for a 30-year coverage of Rs. 20 lakhs for a 30 year old male
A nominal annual premium is payable for a large cover amount.
e.g. Approx Rs. 689 p.m. for a 30-year coverage of Rs. 20 lakhs heart cover for a 30 year old male & approx. Rs. 373 for cancer cover.
Keeping Up with Inflation The cover will continue to increase at 10% of the initial sum assured every year, until either:
- A claim is filed on the policy
- The total sum assured reached 150% of the base sum assured
The cover will continue to increase at 10% of the initial sum assured every year, until either:
- A claim is filed on the policy
- The total sum assured reached 150% of the base sum assured
Minor Conditions No claim is payable if you are diagnosed with a minor condition for a covered terminal disease. The plan will pay a 25% of the applicable sum assured on diagnosis of a covered minor condition
Premium Waiver Not Applicable In case of a claim for a minor condition the policy continues without the need of extra premiums. Growth of sum assured will also stop.
Major Condition 100% of the sum assured applicable for the claim year is paid to the family or policyholder 75% in case of a previos minor claim or 100% of sum assured as applicable for the in case of no previous claims is paid to the policyholder or family
Regular Income 1% of the initial sum assured is paid to the family for 60 months 1% of the initial sum assured is paid to the family for 60 months

iSelect Star Term Plan is another plan you can select. It is a term insurance plan that gives you some benefits of health insurance. You get a sum-assured, in case you or any family member is diagnosed with a terminal illness.

How to Choose the Best Critical Health Insurance?

If you are looking for the best health insurance plans, look for the below features:

1) Cover early stages: You need money for treatment as soon as you are diagnosed with the disease. The best health insurance plan is one that gives a lump-sum amount as soon as you are diagnosed with a critical illness.

2) Provides regular income for the family: If the bread-earner in the family is diagnosed with a critical illness, the situation gets tougher for the family. So you have to ensure your health insurance plan gives you a monthly income when you are diagnosed with a critical illness and the regular income stops.

3) Premium waiver on diagnosis: The health insurance plan should waive off the premium once the insured person is diagnosed with a disease. It is all the more important if the person is the only one earning in the family.

4) Increasing cover option: Your medical expenses and treatment costs are going to increase with time. To keep pace with healthcare inflation, the health insurance plan should increase the sum assured every year.

5) Return of Premium Option: Return of premium option is an attractive feature for those who like to keep every penny accounted for in their purse. It also helps to add a little more to your kitty at the time of retirement.

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Frequently Asked Questions (FAQs) for Health Insurance

Buying health insurance online is cheaper and more convenient than getting a policy through an agent. Insurance companies work on the premise that people who have access to the internet and are willing to buy policies online are more likely to be better-off and healthy. Moreover, online plans save a lot of money for the companies as the administrative costs such as documentation and office space get eliminated. The insurance companies pass on the savings to the customer and offer lower premiums on online health insurance plans. With online plans, you do not have to visit the bank of the insurer’s branch and can buy the policy sitting in the comfort of your home.

Canara HSBC Oriental Bank of Commerce Life Insurance provides a comprehensive health insurance plan named Health First. It is a fixed benefit plan that provides a lump-sum amount on the occurrence of heart or cancer-related conditions, besides 26 other major critical illnesses. It is a flexible plan that gives you the freedom to choose the cover you need along with various options to customize the plan according to your requirements.

Diseases can strike without any warnings. Having a health plan protects you from unforeseen financial hardships and helps you lead a stress-free life. A health plan also ensures that you receive quality treatment in case you are diagnosed with a serious illness. A health plan creates a buffer around your savings, which remains unscathed even in cases of substantial treatment costs.

There are no uniform rules to select an insurance policy as the needs and medical history of people vary. However, Health First plan from Canara HSBC Oriental Bank of Commerce Life Insurance offers comprehensive coverage, which could be adequate to take care of all your health insurance needs.

The health insurance premium depends on a variety of factors such as age, geographical location, lifestyle habits and occupation. The best way to calculate health insurance premiums is to use a good online premium calculator which is easily available.

With the change in lifestyles, the incidence of diseases has increased drastically. Health insurance is necessary to cover against lifestyle diseases, which are on the rise due to poor nutrition, lack of physical activity and pollution.

A health insurance policy ensures that you and your loved ones do not have to think about the finances while opting for treatment. In the event of hospitalisation, a knowledge of the claim process saves the policyholder from undue hassles. A hospitalisation can generate reams of bills and documents. The claim process of fixed-benefit health insurance is very simple as the payout does not depend on the cost of treatment. In case a critical illness is diagnosed you just have to intimate the insurance company. The insured just has to fill a claims form and attach the doctor’s report on the illness. One doesn’t need detailed bills and prescriptions to claim the sum assured. The entire process is very simple and hassle-free.

Health insurance premiums can help you in reducing tax outgo, as it is eligible for tax deduction under Section 80D of the Indian Income Tax Act, 1961. If you choose a health insurance plan for parents aged 60 years and above, you can claim Rs. 50,000 as a tax deduction. Senior citizens up to 60 years can also claim up to Rs 25,000 as a deduction for the health insurance premiums paid for themselves, or for their spouse or children. This deduction will be available with respect to payments towards annual premium on a health insurance policy, or preventive health check-up of a senior citizen. It is also available for any other medical expenses related to senior citizens. In such a case, if you are paying the health insurance premiums for your senior citizen parents, the total deduction you can avail is Rs. 75,000 per year.

There are no fixed guidelines for choosing adequate health insurance cover, but the cover should depend on factors such as income, family history of diseases and geographical location. Considering the high cost of medical care in metro cities, one should have a minimum cover of Rs 10 lakhs. The cost of hospitalisation and associated costs are higher in large cities. Smaller cities have lower cost of living and a cover of Rs 4-5 lakhs would suffice.

Health insurance plans do not cover all the diseases and certain conditions are excluded from the cover. Some of the common exclusions are:

  • 1.Pre-existing medical conditions
  • 2.Alternative therapies
  • 3.Cosmetic treatments
  • 4.Pregnancy and child birth
  • 5.Diagnostic expenses
  • 6.Dental
  • 7.Injuries caused due to a suicide attempt
  • 8.Waiting period clause
  • 9.Permanent exclusions: Injuries due to war, HIV, intentional injuries, congenital diseases, and others are permanent exclusions

Diseases can strike without any warnings. Having a health plan protects you from unforeseen financial hardships and helps you lead a stress-free life. A health plan also ensures that you receive quality treatment in case you are diagnosed with a serious illness. A health plan creates a buffer around your savings, which remains unscathed even in cases of substantial treatment costs.

Employer waiting period: Waiting period is the length of time that an employer will make a new hire wait before the employee is eligible for coverage access under the company's health

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