You might have a health insurance policy with an INR 10 lakh cover, but if you do not understand it, or have not taken the time to go through the policy in detail; you will find it difficult to claim even INR 10,000 when calamity strikes. And while reading policy documents is not an easy task, it is important nevertheless.
Here are some terms and features that you need to know to get the benefits of the policy better.
Indemnity policy versus defined benefits policy
There are two types of health insurance plans. The first one is an indemnity policy, which pays for hospitalization, etc. The other is a defined benefit plan, that pays a defined sum on a defined medical procedure. First, you need an indemnity policy that will pay for your hospitalization expenses, listed day-care procedures, as well as pre and post-hospitalization expenses. The policy will pay an amount that is up to a sum insured in a policy year, mostly through a cashless procedure. The same policy can be renewed the next year.
A defined benefit plan pays a lump sum in the case of a specific medical event, irrespective of the medical bill. The policy then terminates.
At the time of taking a health insurance policy, there are some diseases that a person might have. These are excluded from the cover during the waiting period. This pre-existing ailment is defined as a condition, injury, or ailment for which the insured did have symptoms, and was diagnosed within four years before buying the policy.
Thus, if you suffer from a pre-existing ailment, the insurer might agree to offer you a health insurance policy, depending on the severity of the situation. Most, however, will not cover this pre-existing ailment or the hospitalization that has been associated with it for at least four initial years. Some insurers might even offer you a shorter waiting period.
Pre-existing ailments have a waiting period, and there are two other types of waiting periods too. The first is the initial waiting period of 1-3 months, while the other is a disease-specific waiting period of 1-2 years on certain ailments like hernia and cataract. This inclusion helps to rule out fraud or a pre-existing condition. However, in the case of an accident, the insurer will provide cover during the initial waiting period as well.
Co-payment and sub-limits
These features help to bring down the liability of the insurer as well the premium.
As per co-payment, the insurer will not pay the entire amount, but only a certain percentage. This exists mostly in health insurance plans for senior citizens.
For example, if a policy offers medical insurance worth INR 2 lakhs and there is a co-payment clause of 10 percent, the policy will pay only INR 45,000 should the total hospitalization bill come to INR 50,000.
Co-payment also applies to certain specific ailments, and insurers might ask you to pay extra to waive off this co-payment clause.
Also, go through the sub-limits in the policy. There is one that applies to room rents, which means that the insurer has capped the amount that is eligible for the room rent per night.
Be careful about this. This is not just about the room rent, but also associated costs like the doctor fee, which then automatically gets capped.