Be Money Aware

For most people, the primary motive behind buying a health insurance plan is reducing income tax liability. However, your decision to buy a health plan in haste just to save tax can cause you more loss than benefit. In the future, it may happen that you or your family member need some medical attention but your policy doesn’t cover the medical condition. The possibility of this happening to you increases if you are not cautious enough to pay attention to every aspect of a health plan and its exclusions and inclusions.

But, in the midst of countless terms and conditions that these plans come with, how to choose the right plan? Enlisted below are 3 deciding factors that can help you pick the best health insurance plan:

1.      Room Rent Sub-Limit in Health Insurance Plan

• Provision of room rent is actually an in-patient hospitalization benefit. The rent for the room in which you stay during hospitalization is covered by many plans. However, most insurance companies impose a limit on room-rent; this means that your insurer will only pay the rent up to the policy-specified limit.
• Typically, the room rent sublimit is fixed at 1-2% of the sum assured and is offered on a per-day
• Charges above and beyond the said limit will be borne by the policyholder.
• There are some plans that provide an option to choose your room type at the time of purchasing the policy.
• Usually, if the sum assured is higher, the room rent is covered by the plan.
• Also, there are some plans which, regardless of the coverage amount, offer to cover the rent of a single private room.

Below are few of the best health insurance plans offering room rent Benefit:

• If you opt for a sum assured up to Rs. 3 Lakh in Religare Care Health Insurance Plan, you are entitled to get 1% of your sum assured as room rent.On the other hand, for a sum assured of Rs. 5 lakh or above, you will get the rent for a single private room.
• With Activ Health Enhanced Health Insurance Plan of Aditya Birla Health Insurance Company, you can get the option to choose the room type at the time of buying the policy.
• Apollo Munich Optima Restore plan comes with no cap on the room rent, regardless of the sum assured.

2.      No Claim Bonus (NCB) in Health Insurance Plan

• As its name indicates, No Claim Bonus (NCB) is a benefit offered to you if you haven’t made any claim during a policy year.
• In lieu of NCB, you are either given a discount on the premium at renewal or your sum assured is increased.
• As it is offered in percentage, it’s important to confirm the percentage offered by your insurance provider beforehand and the maximum cap on it.

Illustration of No Claim Bonus:

Let’s say, a health insurance policy offers the NCB at the rate of 10 per cent per annum, max 50% of the sum assured.

So, if you haven’t made any claim in your last policy year and the sum assured of your plan is of Rs. 5 lakhs, the NCB (at 10% of 5 Lakhs) will be Rs. 50,000. It means that your sum assured will now be Rs. 5.5 lakhs.

The maximum NCB that you can receive in this scenario is Rs 2.5 Lakh which is 50% of the sum assured. It further means that the sum assured can reach only up to Rs 7.5 Lakhs.

It’s important to understand that while in some plans the NCB reduces in the same proportion as the claims made, there are certain health plans in which the accumulated NCB isn’t reduced.

Below are a few plans offering NCB benefit:

• The maximum NCB offered in Religare Care plan is 100% of the sum assured. You can also receive 150% of the sum assured as NCB under the Religare Care NCB Super plan.
• Activ Health Enhanced offers NCB at the rate of 20% per annum with a maximum limit of 100% of the sum assured.
• HDFC Ergo’s Health Suraksha plan comes with an NCB of up to 50% of the sum assured.
• Cigna TTK’s Pro Health Protect plan offers NCB at the rate of 5% per annum with a maximum limit of 100% of the sum assured.

3.      Co-Payment Clause in Health Insurance Plan

Co-payment is a clause in a health insurance policy which states that a certain portion of the total medical bill will be borne by the policyholder. This percentage may vary from 10% to 50% depending on the health policy.

Illustration of Co-payment Clause:

Let’s say, the co-pay of your health insurance plan is 10%. In this case, for an Rs. 1000 bill, your insurance provider will pay Rs 900 and the remaining 1000 will have to be borne by you.

The health insurance plans that have a higher co-payment generally have a lower premium. This is because the risk and the incurred amount are shared between the insured and the insurance company.

There are two types of co-payment:

1. Voluntary co-payment:
2. Mandatory co-payment

Usually, mandatory co-payment is applicable for elderly people due to the higher risk associated with senior citizens.

Co-payment clause of some Health Insurance Plans:

• Star’s Family Health Optima Health Insurance Plan has 10% co-payment clause for senior citizens.
• Activ Essential Health Insurance Plan, offered by Aditya Birla Health Insurance Company, has a mandatory co-pay clause of 20%.
• Health plan from New India Assurance comes with an optional co-payment clause.
• HDFC Ergo’s Health Suraksha Health Insurance Plan offers optional co-pay option to its customers.

All About Insurance : Life Insurance, Health Insurance, Car Insurance, LIC

Wrapping it Up:

The ‘one-size-fits-all’ approach doesn’t work with health insurance plans. Hence, make sure to check a health plan against the above-mentioned factors before you buy it.  An ideal health insurance plan should not only offer you ample tax benefits, it should also cover all your fundamental health-related requirements.