In the past, we have compared and drawn similarities of financial planning to various aspects of life - to movies, to health and to accounting, to name a few. As many of our readers take an avid interest in sports, this post draws a comparison between sport and planning your finances. Here are a few similarities:

• Goal based actions: When you play a sport, the aim of the sport is to achieve a certain goal, which ultimately results in a victory over the opponent. In Financial Planning, you don't aim to win over someone else; rather, you seek to achieve the goals you set out in the first place. For example, buying an insurance cover, making goal based investments or managing your liabilities in a better manner are instances of achieving the respective goal in financial planning. 
• Need for commitment: Both in sports and in Financial Planning, you need to have commitment. Great sportsmen like Sachin Tendulkar or Leander Paes have become what they are only because of their commitment to the sport. Similarly, in order to lead a comfortable financial life, you would need to be committed to the Financial Planning exercise. 
• Get better with time: It is said that 'Practice makes you perfect'. This holds good in the case of both sports and Financial Planning. The more you practice, the better you get at your game. In the same way, over time, you get better at identifying the right investments and taking the right financial decisions. 
• Identify mistakes and learn from them: When a sportsman loses or performs badly in a match, it is logical that the reason behind this is that he committed certain mistakes in his game. A true sportsman identifies these mistakes and learns from such mistakes. Similarly, when you start off Financial Planning, it may happen that you commit some mistakes. An expensive ULIP policy, spending excessively on your credit card or taking a personal loan which is not necessary may have happened. These mistakes can prove to quite expensive, especially if they are repeated. Therefore, the more important thing is to learn from these mistakes and to not commit them again. 

1. Exclusion - The promotional and marketing material will always tell what is included in the policy but exclusions are never properly highlighted. You should read the policy document thoroughly to ensure what is excluded. You should keep the policy document safely. You should keep relevant hospitalization bills, prescriptions and reports properly so that the claim process will be easy.

2. Sub-limits – Insurance policies cover the room rent but up to a limit. Many times, the limit is not just on the room rent but on all other expenses incurred. So if you go for a room that’s higher than the limit in your policy, there can be a huge deduction in your claim amount. Again, IRDA wants no such sub limits to be applied by insurance companies. We have seen that the top players have already introduced products that comply with this requirement. So it’s better to buy a policy without any sub-limits to avoid unpleasant surprises.

3. Cashless Hospitalisation – Many insurance companies provide the facility of cashless hospitalisation. But you cannot claim this if treatment details are unclear or the hospital does not allow cashless facility. Ensure that you know the regulations of the insurance provider and the hospital policies.

4. Premium Loading – Some insurance policies are very cheap when we buy. This is a marketing ploy. Once we make a claim, the renewal premium becomes high because of the clause of loading premium. Of course, today there is portability and lot of choice for the customer. But one has to check if this condition is applicable and how and to what extent it is applicable. If you are older, the portability won’t be very easy nor will all insurance companies be ready to provide you medical insurance. Keep in mind that the IRDA regulation prohibits insurers to apply claim loading at individual policy level.

5. Co-payment – It means a part of the claim amount needs to be paid by the insured. This clause is present in some insurance policies like if the policy is for a person who is 65 years or older. You should be aware if your policy has this condition. This can be avoided sometimes by paying a higher premium amount.


6. Accidental Insurance – Many health covers offer accident insurance for a slightly higher premium. You should check the accident cover and clauses attached to this feature. Many times, the cover is not sufficient if there is a hospitalisation due to accident. In most cases, this does not include protection for partial disability, permanent disability and temporary total disability. If required, you should take a different policy for accidents.

7. Domiciliary Hospitalisation –  Sometimes the patient is unable to go to the healthcare facility and the healthcare facilities are brought home and the patient is given treatment for many days continuously. It is important to confirm with the insurance provider if this will be considered as hospitalisation for claim purposes.

It is important to have a health cover policy for yourself and your family. But before you buy one, read all conditions thoroughly and get all your questions/ doubts answered so that the claim process becomes easier.

The author can be reached at vidya@gettingyourich.com

Health inflation continues to be very high. Experts estimate this to be in the range of 15% to 20% p.a. Based on one’s health, location and age, a family floater cover of Rs. 10 Lakhs to Rs. 20 Lakhs can be a minimum need for a health cover at the moment and this can easily touch Rs. 50 Lakhs with inflation in the retirement age in the years to come. Not everyone can afford to take a sizable health cover with say ICICI Lombard or Apollo Munich etc. The nationalized health insurers anyway don’t offer covers beyond Rs. 10 Lakhs. The senior citizens often don’t get a health cover even if they are ready to pay high premium.

As the penetration improves, we can expect better features, possibly reduced premiums and availability to senior citizens. IRDA seems to be doing a decent job with customer friendly measures (e.g. Life loan renewals, no individual claim loading, no sub-limits). At some point in time, we can expect government to roll out health care schemes for masses, in line with the Western and European countries. So we can expect lot more good things in the years to come. But then lot of this is futuristic and wishful. How do we handle it today?

One way to address this is look at group health insurance schemes. The health covers offered by employers normally have better features and higher chances of claim getting paid. This is obviously possible due to the volumes that the corporate clients can offer compared to a standalone retail client. The Army and Central Government too offer Group Health covers and especially the Army Health Cover seems to be working well with lifelong support. Individuals can take advantage of Group Health cover schemes facilitated by most Nationalized Banks.

Punjab National Bank, Union Bank, Bank of Baroda, Canara Bank, Indian Overseas Bank, Syndicate Bank and India Bank provide affordable group health cover to the customers who hold account with them. The Banks tie up with Insurers and due to the scales, they are able to offer very competitive rates. In most of these schemes, there is no age wise premium but just an average premium is applied across all the ages. So for senior citizens and people in 50’s, this can be inexpensive option. For a couple with two minor age child, the premium for 5 Lakh family floater can be ~ Rs. 7,000 in most of these schemes.

This does come with its own limitations. For the price one pays, the service expected cannot be great. Also, an individual cover is always safer than a group cover. In a group cover, there is a dependency on the facilitator. As an example, based on the cost structure or regulations, the banks may change the design of the scheme, make it expensive or may discontinue for new clients or stop it altogether. But then, it’s better to have some cover rather than having no cover at all. Such group health covers can be particularly helpful for senior citizens, those with health history or those who cannot afford regular covers.

The challenge is that few options available today are grossly insufficient. On the other hand, at every corner in this country, we have some or other association. Rather than waiting for regulators to improve the offerings or the Government to bring in revolutionary changes, Citizens should start group health cover initiatives within their own groups. Even a size of 50 people is a good start though for long term stability, the group sizes should be much higher. This is easier said than done but than if we all go back and push to our society, community, area, college, school, business and professional associations then at some point in time, this revolution can start.

One challenge observed is that in most cases people are managing such associations on honorary, and hence on a best effort basis. For an initiative like group health cover, a professional approach should be taken. Investment may be needed to appoint right intermediaries, research on available options, negotiate best possible deal with best insurers and then to keep an eye for quality checks.

This article was originally published on FPG, India. The author can be reached at rohit@gettingyourich.com

As a health insurance strategy, one can either use the health insurance provided by the employer or also buy a personal secondary health insurance on a safer side. A majority of employers provide for a group health cover. This corporate health cover is a huge benefit. But is having only this health cover sufficient? Personal Finance experts believe that it is far better to have a secondary health cover. Here’s why:

Job change: A change in job results in the health insurance provided by the previous employer coming to an end. The new employer may not offer a health cover, or may have lower sum assured or sub-standard features or poor services. That said, now, in the group health cover, insurance companies have also started giving an option for the employee to move to the normal health cover by the same insurance company. This is an early trend and needs to be watched carefully how this works out.

Start of own venture: If one starts on his own or joins a start-up, then he may not have any health cover. A secondary cover helps in this case.

Time between job changes: A cooling period of 1 or 2 month break in between job changes means that you neither have health cover from the old company, nor from the new one. Even when you join the new company, the claim may not be admissible for the first 30 days. It may be possible that during this interim period, there is a hospitalization in the family for which you need health insurance cover. A secondary health cover can help to meet such needs.

Cost cutting by the company: If your employer decides to lower the amount of health cover, features or flexibility, then it can be a risk exposure for you. It’s very difficult as an employee to negotiate against such changes.

Working abroad: If you move to a foreign location, you may get a health cover. But will this cover your family, back home? Maybe or may not be.

Cover for Older Parents: If one has older parents, it may be difficult to get a health insurance cover for them. The personal cover can be used for self & family and office cover can be reserved for parents.

Get in early: Given the standard waiting periods for specific diseases and for pre-existing diseases, opting for a secondary health insurance at an early stage will help as one may develop ailments at a later stage in life.

Retirement: There are very few corporates who extend medical cover benefits post retirement. If your health is not good, you may either have to pay a higher premium, or may even be declined a health cover. Thankfully, the maximum entry age is typically 65 years. However insurance companies are very conservative while extending the health cover at this age. Taking a new health cover while you retire may not only prove to be expensive, but may also not be possible in some cases.

Relying solely on a corporate health cover can therefore be a risky proposition. The main advantage of not taking a secondary health insurance is saving on premium costs.

Alternate way: If you are just starting your career in your late 20s and do not have a huge family responsibility, you can stick to a corporate cover and take a top-up cover with the deductible being equal to the corporate cover. Another scenario is if both the husband and wife are working with sufficient individual corporate covers which also include the parents, then you can opt for a top up cover for now. A top up cover is an additional insurance, over and above the existing health cover.

Top-up Covers

The Top-up health cover as a product is still evolving in the Indian markets. Although a top up plan is less expensive, there are some drawbacks. A top up health plan comes into force only above a certain limit, known as the ‘deductible’. If your corporate health cover amount is lower than this deductible amount, then you will have to pay the difference from your pocket. Further, top up plans usually work when the claim amount exceeds the deductible in a single occurrence of hospitalization by a single member.  Some of the top up covers have provisions to convert to a nil deductible policy at the time of retirement. Some of the super top up cover products also allows you to make multiple claims during the year.

Apollo Munich’s Optima Super is a Super Top up plan and can be converted to a full-fledged health insurance plan close to retirement. On conversion, you do not have to undergo the waiting period requirements. While this is a benefit, be aware that the premiums will increase on conversion, as you are moving from a ‘deductible’ to a ‘nil deductible’ plan. 

Conclusion

The question of whether or not a secondary health insurance is needed should therefore be analyzed carefully, keeping in mind individual requirements and financial situations. As a best practice, it is strongly suggested to have a secondary health cover in place.

The analysis is valid only on the day being published. Readers should study the prospectus of the insurance company for further analysis and consult an adviser before making any decision.

The author can be reached at smitha@gettingyourich.com

Coverage: All policies cover the spouse and the dependent children of the policy holder. Oriental Insurance policy covers parents in laws too. The Heartbeat Family Floater variants allow coverage for self, spouse and upto 4 children in various combinations.

Entry age and age on renewal: The higher the maximum entry age and maximum age on renewal, the better it is for you, as this gives coverage in old age when the medical expenses are the highest. Of the plans compared, the maximum age is highest at 65 years for New India Assurance and Apollo Munich policies. However, 65 years is not very high. Nevertheless, a positive in New India Assurance policy is that there is no maximum age for renewal.

Sum Assured: In today’s age of rising medical expenses, a high cover is preferred by many families. Private players like Apollo Munich and Max Bupa offer a higher sum assured option. Max Bupa Family Floater Gold plan offers a sum assured as high as Rs. 50 lakhs. The maximum sum assured option is lowest for Mediclaim 2012 policy.

Premium per annum: For a lower sum assured option, the premium is lower for the public sector policies and higher for the other two policies. However, the benefits available in the Optima Restore policy and Family Floater Heartbeat policies are also higher.

Co-payment requirements: Lower the co-pay requirement; the better it is for you as this is the amount you will have to give from your pocket in case of a claim. This is the highest in the New India Assurance policy, with co-pay clause applicable on age as well as location specifications (Refer the table below). Max Bupa’s plan has a tapering co-payment feature which provides an option of reduced and subsequently zero co-payment, subject to continuous renewal for a period of 4 years. Co-payment feature is absent in the Apollo Munich Plan and the Gold variant of the Happy Family Floater plan of Oriental Insurance.

No-Claim Benefits: The public sector policies we have analysed in this discussion come with no-claim discounts on premium with a ceiling of 15% for New India Assurance 20% for Oriental Insurance policies. Apollo Munich policy gives a 50% enhancement on the basic sum assured for every year you do not claim, upto 100%.   The Max Bupa plan offers a health relationship loyalty programme, wherein the policy holder can choose one of the two options - (a) Earn points worth 10% of the last paid annual premium on renewal of the policy (b) An increase of 10% of the Sum Insured every year of expiring base sum assured, accumulated upto 50% of renewal base sum insured. The loyalty program is irrespective of the claim.

Other Benefits: The pre and post hospitalization time periods are the highest for the Optima Restore policy by Apollo Munich. The Max Bupa policy (Gold variant) covers upto 20% of Base Sum Insured under this head. The Max Bupa policy offers maternity benefits, which is generally disallowed by most health insurance policies. Health check up benefits is another positive in Max Bupa. The two private sector policies also offer day care procedures as a part of the claim even though the hospitalization is for less than 24 hours and also cover organ transplant costs. The Apollo Munich policy has the benefit of automatic re-instatement of the basic sum insured, if the basic sum insured and multiplier benefit has been exhausted during the policy year, which is beneficial too. The extent of benefits is lower for the public sector policies.

Which policy should be chosen?

The most striking feature in the comparison below is that the premium for the 2 public sector policies for a lower sum assured is much lower than their private sector counterparts. So if you are concerned about paying a high premium, are not particular about extensive benefits and do not mind the co-pay clause, you can pick these two policies. However, remember that you cannot opt for a very high Sum Assured amount and the New India Assurance policy has an entry load if you are above 45 years.

Among the two private sector policies analysed, the premium as you can see if higher for the Family Floater Heartbeat plan of Max Bupa. You can take it if you want a high Sum Assured option or the extra benefits listed. The Apollo Munich plan does not have the co-pay clause and comes with restoration of Sum Assured and multiplier benefit as well. These can be positives in times of rising healthcare costs. Nevertheless, keep in mind the higher premium.

You can opt for either of the public sector policies if you wish to take a lower Sum Assured. On the other hand, if you want a higher cover, you can opt for the private sector policies. Your specific needs determine the choice of the policy.

A detailed comparison is available below. For more details, refer to individual company’s prospectus. Kindly note that this analysis covers major offerings from the insurers only & this is not an all-product comprehensive comparison. The analysis is valid on the date being published.

The natural course of action to combat rising medical costs is to take a health insurance. Most employers provide a health cover to employees, which cover the families as well. But such medical insurance does not cover Out Patient Department (OPD) expenses, preventive health check-ups and costs of medicines. Besides, OPD expenses are more recurrent and commonplace than hospitalizations which health insurance covers.

In order to manage such expenses, people opt for secondary health insurance which has OPD cover. However, the options are restricted in this space and the few options which are present are expensive. Besides, the OPD spend on such health covers come with a cap, meaning only a certain amount can be claimed every year. The question then arises if there is a better alternative to combat the ever rising healthcare expenses. 

Health Cards or Healthcare Discount Cards are schemes started by companies or hospitals which offer discounts on medical expenses in select facilities on payment of a monthly or annual fee. Note that this is not a health insurance. It is simply a format to get a discounted rate on various medical benefits in exchange for a membership fee. Here are some things one should understand in a health card scheme.

What are the benefits? A health card offers discounts which range from 10% to 100% over many medical and allied expenses. Introduced typically to bridge the gap between what is spent on healthcare and what is covered by insurance, a health card can get one discounts on OPD fees, doctors’ consultations, ambulance charges, medicine costs, diagnostic services and dial-a-doctor facility. Dental treatments and alternative treatments such as homeopathic and ayurvedic treatments which are generally not covered by health policies are also covered. Further, there are no expense caps or sub limits like a health insurance, as it is mainly a discount oriented benefit. Note that the health card scheme is offered by many players in India. The range of benefits covered and the amount of discount varies from one player to another. Some companies also cover wellness services like spa treatment, online symptom trackers and health logs, diet plans and give free second opinion before a surgery to the card holders. The benefits also differ depending on the plan opted, which differs according to the membership fee.

Where can the benefits be availed? Companies offering health cards collaborate with hospitals and clinics in the country. This is similar to network hospitals which are covered by insurance plans. The health card will only work if the member avails services from the hospital, clinic or diagnostic centre which is covered by the scheme. Different companies have tie-ups with different hospitals.

What is the fee? This again depends on the provider one chooses to go with. The fee varies depending on the plan and the number of members. It can vary from Rs. 1000 to Rs. 8000 a year. Logically, the plan which charges Rs. 8,000 covers a wider range of services compared to lower priced plans. There are options for an individual, couple and large families as well, and the fee varies accordingly.

Who are the players? The health card scheme is offered by both independent companies and hospitals. Hospitals offering health cards allow a person to use them only in their chain or in a group facility. As a result, the use of such cards is restricted. However, if a person visits only one hospital in the vicinity for all the medical needs of his family, then such a loyalty card may be beneficial. So, one can check out if the nearest hospital offers a scheme like this. Hospitals which are a part of a large hospital chain like Max, Fortis or Apollo are more often seen to offer a loyalty card like this. Independent companies also offer health cards. This may be better compared to standalone cards offered by hospitals, as the user has more choice on the back of tie-ups with multiple hospitals. This increases options for the card holder. Some such providers are the Indian Health Organization (IHO) which is a part of Aetna Inc US, Sharak Healthcare, Wizzcare and EasyLife Care which have various plans in place. In 2013, E-Meditek Global, the holding company of E-Meditek TPA launched a prepaid card for medical needs in association with VISA and Ratnakar Bank.

What are the drawbacks? While everything looks good, a health card also has some drawbacks. An important aspect to keep in mind is that unlike the health insurance sector which is regulated by the IRDA, this is not a regulated industry. So if one has a problem with the services of a health card provider, he can only approach the consumer court for solving the dispute. Also, the network of hospitals and clinics may be limited when compared to insurance providers. Further, if one opts for hospital promoted loyalty cards, the options will be even more limited.

Should one consider a health card? A health card definitely looks cheaper when compared to health insurance offering OPD benefits. However, one must do an analysis of the individual needs before deciding on a health card. Remember that in most cases, the member will only get a discount on the bills and not a full reimbursement. So it is important to first estimate the family’s annual medical expenses on medicines and doctor consultations, apply the discount and then calculate if the savings will be more than the annual cost of the health card. If this is not the case, it is better not to opt for a health card and only take a secondary health insurance to cover hospitalization expenses. Further, before choosing a provider, the background of the company must be checked, if it is an established name in the healthcare sector. An experienced company is always better than an unrelated provider. It is also important to check the hospital network of the provider and how this suits individual requirements.

Disclaimer: Information about the health card offer has been taken from various online sources. Individual company products will need to be checked before opting for a scheme.


The author can be reached at smitha@gettingyourich.com

There are four public sector players in the country with health insurance policies - United India Insurance Co Ltd, National Insurance Co Ltd, New India Assurance Company Ltd and Oriental Insurance Company Ltd. The greatest benefit of taking a policy with these players is the cost benefit, as you will need to pay lower premium for the same coverage when compared to a private sector player. However, there are some drawbacks also, like a co-payment clause in many policies and also limited option of choosing a high cover. ​

Our earlier analyses on health insurance policies have received positive feedback from our readers. We have discussed health policies offered by Nationalized Banks, those offered by top players in the private sector and policies offered exclusively for senior citizens. Today, we look at health coverage offered by public sector players only.  

We have analyzed the Family Medicare Policy from United India Insurance Co Ltd, Parivar Mediclaim Policy from National Insurance Co Ltd, Family Floater Mediclaim Policy from New India Assurance Company Ltd and Happy Family Floater Policy from Oriental Insurance Company Ltd. Let’s look at some features of these 4 policies.

Coverage: All policies cover the policy holder, spouse and dependent children. However, parents are covered only by New India Assurance and Oriental Insurance policies. Further, parents in laws are also covered by the Oriental Insurance policy.

Entry age and age on renewal: This becomes critical when you consider health cover for old age. National Insurance and Oriental Insurance score poorly on these counts. The policies by United India Insurance and New India Assurance are better, as the maximum age on renewal is very high, thus making it ideal if you look at the long term.
Sum Assured: This is a weak point in general, for most public sector health policies, with that offered by National Insurance Company being the poorest at maximum Rs. 5 lakh. Others have the maximum Sum Assured option up to Rs. 10 lakhs. But Oriental Insurance has come up with a variant which has a maximum sum assured of Rs. 20 lakhs. However, there are some private sector policies which offer up to Rs. 50 lakhs coverage also. The amount of coverage you need depends on your needs, family size etc. If you feel you need a higher overall cover, you can also consider splitting across 2 policies or looking at a top up cover option also.


Premium per annum: This is a positive feature for public sector policies, as the premium is lower when compared to private policies for the same amount of cover. The amounts are almost comparable across all the 4 policies analyzed.
Co-payment requirements: This is the amount the policy holder will have to shed from his pocket in case of a claim. It is the highest in the New India Assurance policy, with co-pay clause applicable on age as well as location specifications (Refer the table below). The other plans have co-pay requirement of 10%. The Gold variant of the Happy Family Floater plan of Oriental Insurance does not come with this condition.
Benefits: No claim discount works out to be the best for the Oriental Insurance policy, ranging up to 20%. Further, there is a discount of 5% in TPA services are not opted and 15% on Overseas Medical Policies. There is also a discount if you purchase the policy online. Again, this policy comes with additional covers like daily cash allowance, attendant allowance, personal accident cover and cover of life hardship survival benefit, albeit at a cost. Domiciliary hospitalization is also possible. Some other policies have a no-claim discount up to 15%, subject to certain conditions. Free health check up benefits is available under United India Insurance. The latter also offers discount on family members’ premium. . The National Insurance policy seems to be restrictive in terms of extra benefits offered. Refer the table below for other benefits of the policies.
Claim Settlement Ratio: The higher the claims settled, the better it is for the policy holder. In this respect,all the companies have done pretty well. Most are above 100% indicating that they are clearing the backlog of claims. The ratios for all of them have improved over the last few years.
Other features: Pre and post hospitalization time period is 30 days and 60 days respectively for all policies, except the National Insurance policy, where it is 15 days and 30 days respectively. This is again restrictive. Pre-existing diseases are covered only after 4 years of the policy for all the policies analyzed. The exclusions are also pretty standard across all the policies.

​Which policy should be chosen?
Each policy has both benefits and drawbacks and you should choose based on your unique requirements. The policy by United India Insurance comes with high age and sum assured options. However, there are not many extra benefits available in this policy and claim settlement ratio is also low. The policy by New India Assurance can be considered for high settlement ratios and also high renewal age. But again, you should consider the co-pay clause and entry load for higher age brackets. The Oriental Insurance policy can also be considered for high settlement ratios and the gold and diamond plan variants comes with higher sum assured option and more benefits. But this may not be suitable for higher age brackets as the maximum age for entry is comparatively lesser. You can avoid the policy by National Insurance Company although the premium is comparable, if you wish to take a higher sum assured or are in the higher age bracket. There is also a restriction on total expenses payable for one illness.
As mentioned earlier, your specific needs determine the choice of the policy. Go by the benefits you can get, as the premium charged is almost comparable across all the four policies.

A detailed comparison is available below. If you prefer to download the excel file, please click here. For more details, refer to individual company’s prospectus. Kindly note that this analysis covers major offerings from the insurers only & this is not an all-product comprehensive comparison. The analysis is valid on the date being published.

This article was originally published on Moneycontrol

The author can be reached at smitha@gettingyourich.com

Bajaj Allianz General Insurance Company recently launched a health insurance plan know as “Surgical Protection Plan” which assures a guaranteed benefit depending on the surgical treatment out of 600 covered surgeries.  The policy has 11 plans ranging from 1lakh – 10lakh. Each plan has 5 grades which has pre defined cover for each surgery. The policy is a benefit policy which can be opted over and above normal health insurance policy.

Salient Features of this policy: -

• This one-of-its-kind policy provides you with a fixed benefit amount for specified surgeries and helps you to take care of the expensive medical treatment in a hospital.
  
• Comprehensive coverage for around 600 surgeries, with guaranteed benefit amount.
  
• This policy can be opted in addition to the hospitalisation policy
  
• The only benefit plan with cashless facility in around 3700 network hospitals all over India
  
• Very competitive premium rates with comprehensive coverage like Hospital Cash Daily Allowance, Critical illness and Personal Accident Cover.
  
• Total 11 Plans available with Rs.1 Lac to Rs.10 Lakh sum insured options under surgical benefit section
  
• Benefit amount will be payable, as per grade of surgery and plan opted
  

The following table shows 11 plans:-

The above fixed cost is payable for the surgeries which are divided under 5 grades as per the below table. The total list of surgery is available on company’s website.

Understanding the Policy - Now suppose, someone has opted for the plan 6, which is for Rs. 5Lakh. There can be two ways of using policy, either cashless option or claiming for reimbursement after getting discharged from hospital.

 Now suppose patient has undergone a Cataract Surgery which is a Grade 3 surgery, the benefit amount is Rs.85000. Let’s say the total cost of the surgery is Rs.50,000 in a Tier 2 city. If the patient goes for cashless treatment the company will pay the bill of Rs.50,000 during discharge and will pay Rs.35000 to the patient thus completing the benefit amount of Rs.85.000. And if the patient goes for reimbursement option the company will pay whole benefit amount of Rs.85000. 

Exclusion under this policy:-

• Abuse of intoxicant or hallucinogenic substance like drugs and alcohol.
  
• War or act of war, nuclear, chemical or biological weapon and radiation of any kind.
  
• Non-allopathic treatment.
  
• Cosmetic or aesthetic treatments of any description, treatment or surgery for change of life/gender.
  
• Intentional self-injury.
  
• Fertility, sub fertility, impotence, assisted conception operation or sterilization procedure.
  
• Weight management services and treatment related to weight reduction programs
  

 Advantages of this policy:-

• 15 days Free Look period for new policies
  
• 30 days grace period for renewal, from policy expiry date
  
• Pre-existing conditions shall be covered after 4 continuous renewals.
  
• In-house claims processing by Health Administration Team of Bajaj Allianz
  
• No pre-policy medical tests up to 45 years of age (subject to no adverse health conditions)
  
• Income Tax Benefit under Sec 80 D of the IT Act on the premium paid for Surgical Protection Plan except premium on personal accident cover
  

 The premium for this policy starts with as low as Rs.636 for a male in the slab of 3 Months – 25 yrs who is insured for Rs.1 lakh. The company offers a 5% family discount as well as extra 5% for maintaining good health. Also, if you buy this policy online you will get additional 10% discount. Also women enjoy a lower premium in comparison with men. So overall a family can claim maximum of 20% discount.

The entry age is 3months for dependent child and 18 years for proposer. It comes with the lifetime renewal facility which is good for the policy holders.

Riders:

There are few riders available with this policy:
1.       Daily cash allowance
2.       Critical illness.
3.       Personal Accident cover

How this policy is different from Critical Illness policy?

Critical illness policy covers some of the major illness mentioned in the policy. It pays a lump sum – one off payment in case you are diagnosed with one of the serious illness. Surgical protection plan also covers only those expenses which are due to be paid for a surgery mentioned in the policy.

There are 2 differences in both policies. First one is that the diseases covered are different in both the policies. Another one is that, in critical illness the patient gets the reimbursement only after he survives for 1 month once the critical illness is diagnosed. While in Surgical protection plan the money is reimbursed as soon as the bills are submitted in the company.

What is the tax treatment for the money received in access to the actual expenses?

Let’s once again consider the above example where actual expense are Rs.50,000 and company will reimburse Rs.85,000 as according to the grade. Now, as in the case of Critical illness policy the amount received is tax exempted through Sec10 (10D), in the same way the amount received in this policy will be a part of reimbursement and thus will be tax exempted.

Should you opt for this policy?

This particular policy covers about 600 surgeries and can be used with the existing health insurance policy.  A normal policy covers the OPD charges, Nursing Expenses, room rent, etc. While this policy will reimburse you the amount indicated in the grade for the surgery. That’s why a person can use this policy as an add on policy. The policy is one of its kind which is launched first time in the country. One can read the wordings of the policy on the company’s website and if find suitable one can opt for this as add on cover over their existing health insurance policy.  

Disclaimer: Since this is a new product, we are not sure how exactly claim logistics may workout. If you are considering buying such a policy, it will be a good idea to ask the Company representative to walk you through the illustration and policy wordings. 

As you know there are various types of Insurance policies available in the market today. In addition to Life and Health (Mediclaim) insurance, you get Critical Illness, Personal Accident, Home Protection, Hospital Daily Cash and Employment insurance. Let’s understand Hospital Daily Cash Insurance policy in detail.

The purpose of Hospital Daily Cash Insurance policy is to reimburse you a lump sum amount of money towards expenses that are incidental to hospitalization. When you get hospitalized, someone in the family needs to stay with you or visit daily. They spend money on travel and their food at hospital. The objective of Hospital Daily Cash policy is to reimburse you for such expenses. 

The way this policy is structured is that you have to select the amount of the daily cash and the total no. of days. For e.g. you can select a plan for a daily cash of Rs. 1,000 for a maximum of 45 days. If you are hospitalized in ICU then some plans give you double of the normal daily cash limit in the plan however, total no. of days eligible may be capped around say 7 days or so.

Some Health (Mediclaim) Insurance policies include a small component of Hospital Daily Cash in the main policy. However, generally this is not included.  So please check if your existing Mediclaim policy has this cover available and if not, can this be added as a rider at the next renewal. If not, you can buy a separate policy. To avoid managing large number of policies, try and combine this cover along with Critical Illness and Personal Accident in the same policy.

For a male of age 30, Hospital Daily Cash for Rs. 1,000 for a maximum of 45 days will cost you around Rs. 1,200 p.a. So this cover is very affordable and comes handy to curtain incidental costs when you actually get hospitalized. It’s a good practice to have a hospital cash policy for yourself and your spouse. It may not be necessary to take this cover for your children. The premium usually works out expensive for senior citizens.

Before you take this policy , we suggest that you first have a health (Mediclaim) cover at a personal level and adequate life insurance cover. This is because we consider Health and Life insurance as your core protection need and hence the same must be fulfilled first. Once these are in place, you can then buy Hospital Daily Cash insurance cover.

Before you buy this policy, please check the specific terms and conditions. There may be a clause linking benefits to a minimum hospitalization of say two days. The Pre-existing diseases are not covered for a period of 2 to 4 years. There may be a waiting period for specific illnesses. Of course, there will be an initial waiting period of 30 days. 


This article was originally published in Dainik Bhaskar on 21st Feb 2014.

Charges structure: ULIP Policies normally levy Premium Allocation & Policy Administration Charges. The extent of these charge vary in each policy. From the premium you pay premium allocation charges are deducted and net premium is invested in the fund as per options selected by you. Policy Administration Charges are normally levied on a monthly basis. If your policy was taken few years before, it is likely to be a high cost structure. Generally, if these charges are exceeding 1% of the annual premium, then it makes us uncomfortable and we normally raise a red flag.

Lock in Period: Normally most ULIPs come with a lock in period of at least 3 years. So even if your cost structure is high, but lock in period is not over, then you would need to continue the policy at least till the lock in period is over.

Surrender Charges: While you make a decision if you should continue your policy, please also have a look as to how much surrender charges you will have to incur. Your policy may have zero surrender charge after about 5 years. So based on the surrender charge currently being applicable, it may be a good idea to wait for a year or so and then surrender your ULIP policy.

Fund Performance: Your policy is costly but is your fund is doing well? If yes, then you may end up with a positive ROI, depending upon market situations. If your policy is costly and the fund is not doing too well, then this may further worsen the situation. Please also check if your funds are invested appropriately mapped to your risk profile? Say if you are in early 30’s and have 5+ years to go before this policy matures, then it’s likely to be a good idea to invest a major part of your fund corpus in this ULIP in Equity. Most ULIPs allow 4 fund switches free in a year. So you could accordingly switch your funds

Insurance Cover: Do you still need the Life insurance cover available in the ULIP policy? Your Life Insurance corpus is a function of your financial liabilities. If you have sufficient assets to take care of your financial liabilities, then you may not need a life insurance cover. On the other hand, if you have a sizable cover in the ULIP policy, then you should check your overall need of Life insurance and assess if you will be able to get a new life insurance cover. If you have a medical situation (e.g. Diabetes) then getting a new cover may be difficult or expensive.

Expected benefits: Some ULIP covers give Sum Assured+ fund value. Some ULIP covers provide Highest NAV guarantee. Some ULIP covers have a premium continuance option i.e. the policy continues even if you die mid-way, no further premiums are to be paid and the policy cash flows are paid to the nominee. Some ULIP covers provide additional benefits like 102% premium credit after 10 years. Some ULIP covers allow you to take a loan against fund value. So, please consider such factors while you make a decision to continue or surrender the policy.

If you do happen to take a decision to surrender or go for a premium holiday, then please communicate your decision in writing to your Insurance Company, fill up required forms and follow up with them to get a confirmation response. You may seek help from the Advisor or Customer Support Executive from the Insurance company to guide you while you make this decision though they may be biased in you continuing their policy. Alternately, you can consult your Financial Planner. 

PS: This article is originally published in Dainik Bhaskar on Fri, 8-Nov-2013 in Hindi. Please see the original article here. Please note that there may be differences in two version due to translation. 

As the popular saying goes, “Health is Wealth”, it is a known fact that the healthier one is, the wealthier he/she feels. If you are healthy, you can automatically work efficiently to earn more money and build your wealth. You also get to build your wealth by not spending on medicines and doctors. However, have you realised that there are several aspects which are common to being healthy as well as building money? Let’s look at some common factors between the health and money:

There is no short term solution: Good health is built over a long period of time. When you give up on habits like smoking and drinking, exercise regularly, have a proper diet and lead a healthy lifestyle, you will witness the positive effects on your health over a long period of time. Good health cannot be obtained overnight, and you need to give yourself considerable time to see it happen. Similarly, building wealth also happens over the long term. Investing in equity gives the best returns over the long term, and this will happen only if you are not swayed by short term volatility and instabilities in the market. The money you earn can be built into a sizeable corpus only when you give it sufficient time to grow.

Discipline and regularity is of utmost importance: Most of us begin exercising or following a healthy diet ambitiously, only to give it up within a short span of time. Following a healthy lifestyle religiously under all circumstances is very important to remain healthy, and this is possible only if you have discipline and commitment. The same applies to building money as well. You cannot build your wealth if you are irregular in your saving and investment habits or if you do not maintain budgets regularly.

Investing time and money is of equal importance: When you wish to be healthy, you must invest sufficient time to exercise, go on walks and follow healthy diets. Most working professionals cite unavailability of time as the reason to remaining unhealthy. Spending money in the form of enrolling for gym classes or dance classes is also sometimes necessary; although you can remain healthy even without this if you have a good lifestyle. Investing money is of more importance when it comes to building wealth. With a plethora of investment products available today, it is very easy to get lost and make worthless investments. Invest in a good financial planner who will help you with your personal finances. Also invest in good books and attend programmes which help you build your wealth. All this also necessitates spending adequate time and energy.

Have a good mix of everything: You cannot achieve good health by doing only one activity - like eating healthy or working out. It requires a combination of several things like following a good diet, having a healthy lifestyle, getting sufficient sleep, being stress free, exercising regularly etc. Following only one of the above and not doing other things will not give you the desired results. Similarly, when you want to grow your money, you should have a healthy mix of investments in your portfolio like debt, equity, gold, real estate etc. It is important to have a balanced asset allocation in place, which suits your risk and return expectations.

The earlier you start, the better: We all know that it is never too late to start anything good. Nevertheless, the earlier you start working towards a healthy lifestyle, the better it is for you and the easier it is for you to reach your goal. In the same way, the earlier you begin saving and investing, the more you build your wealth, in a shorter span of time. Read our blog here on why it is better to start investing early in life.

Small mistakes prove to be costly: Both in getting good health as well as building wealth, you realise that small mistakes you commit regularly can balloon into big complications later on in life. Whether it is eating unhealthy food regularly or spending more than saving, you will realise that these stop you from reaching your goal. It is for this reason that both health and wealth are taken as priorities usually when it is too late and you do not see any other way out.

It is known that enjoying good health as well as building huge wealth leaves all of us energetic and fresh in the mind. So start today, and work towards building both a healthy and wealthy life.                                                                                      #gettingyourich

Smitha Hari
Team GettingYouRich.com

In a major step to regulate the Health Insurance industry, the Insurance Regulatory and Development Authority (IRDA), brought about elaborate guidelines in February 2013. In addition to bringing about changes in various health insurance provisions, these guidelines also define 46 commonly used terms and 11 critical illness terms, with a view to standardize these definitions and thereby reduce ambiguity. The move is also aimed at streamlining many aspects of health insurance and increasing efficiency levels, thereby aiming to protect consumer interest. 
Covering all health insurers, life insurers and non-life insurers which are in the business of health insurance, these guidelines are applicable from February 16th of this year. Any product not complying with the regulations will need to be withdrawn by 1st October 2013 in the case of retail/individual health policies (this date reads as 1st July 2013 for group health insurance).

Let’s look at some important aspects of these guidelines - 

The much needed guidelines is hoped to bring in better efficiency levels in claims processing as well as to bring about clarity to all stakeholders. The table above is a gist of some important provisions. If you wish to read the complete regulations, you can do so by clicking here.                                                                                                                                                                                   #gettingyourich

Smitha Hari
Team GettingYouRich.com

Health is Wealth. I would not be exaggerating if I say there is not a more truthful phrase than this. One has to be healthy to acquire wealth and enjoy it as well. Our body and mind are our assets and we have to ensure that we invest in them so that they are healthy. Yoga is a tool which can help us to invest in our health. Practising yoga correctly and regularly gives us life long benefits. Yoga also teaches us many breathing techniques that give us lot of benefits.

Just like the right investment approach to be used depending on various factors, you should select the type of yoga that is most suitable to you. There are different types of asanas that offer different benefits like flexibility, strength, relaxation etc. There are specific yoga exercises for different parts of the body.
 
For example if your day consists of long hours in front of a computer/laptop screen, it takes a toll on the eyes. There are some asanas to help your eyes relax -

• Blinking - Sit comfortably with your eyes open. Blink around 10 times very quickly. Close your eyes and relax for 20 seconds. Slowly take your attention to your breath. Repeat this exercise about 5 times.
  
• Another exercise is to look at some object which is far away every 15-20 minutes. This would help exercise the eye muscles which are otherwise constantly seeing near sighted objects.
  

If you are a marathoner or a runner, you can practice relaxing, restorative yoga asanas that will help runners recover fast after long races and intense workouts. You can benefit from breathing exercises as well even if you take a short break from your busy schedule to follow them.

Yoga puts a lot of emphasis on breathing properly and other breathing techniques which will prove beneficial to your health. Breathing exercises are called Pranayam. It is an important aspect of yoga. It aims at increasing energy by controlling inhaling and exhaling.  There are different types of pranayam –

Alternate Nostril Breathing
Close the right nostril with your right thumb and inhale through the left nostril. Do this to the count of four seconds. Immediately close the left nostril with your right ring finger and little finger, and at the same time remove your thumb from the right nostril, and exhale through this nostril. Do this to the count of eight seconds. This completes a half round. Inhale through the right nostril to the count of four seconds. Close the right nostril with your right thumb and exhale through the left nostril to the count of eight seconds. This completes one full round.

Bhastrika Pranayam
Sit in the simple cross legged position and take a deep breath such that the lungs are full with fresh air. Hold your breath for a few seconds and release it through nose. Repeat this for 5-10 times till your breathing system is perfect.

Kapalbhati Pranayam
Sit in the simple cross legged position and take a deep breath. Exhale the air by contracting your stomach and let the process of inhaling be done with least effort. Repeat this process of exhaling the air by pushing the stomach inside and inhaling fresh air with least efforts for about 15 minutes.

There are some precautions to be taken while doing yoga –

• Pranayam should not be done immediately after meals.
• There should be proper warm up and cool down sessions while practicing yoga.
• If you experiences pain or hurt while doing any specific exercise, you should stop doing it.
• Yoga should be done only after consulting the health care provider if you have certain medical conditions like pregnancy or high blood pressure etc.

Let us know about your experience of doing yoga.

Note-Please note that you should go to a qualified yoga instructor to get the exact method of doing the yoga asanas mentioned here.
                                                                                                                                                                                                            #gettingyourich
Vidya Kumar
Team GettingYouRich.com

We are sure you all agree that medical expenses have been continuously escalating. While dealing with the stress of poor health is itself harrowing, exorbitant medical bills can give you sleepless nights. A health insurance helps you mitigate the financial pressure by paying for your hospitalisation expenses. However, the multitude of options available in the market, offered by both public as well as private players, often leaves one confused as to which policy to choose. Individuals sometimes make a wrong choice by choosing a policy for which they may be paying a huge amount, but which may not even cater to their needs.

What to look for in a Health Insurance Policy?

One of the important things to look for in a health insurance policy is the age till which you can renew the policy. The higher this is, the better it is for you; as healthcare costs tend to increase with an increase in age. You should also look for the limits on expenses and co-pay clause. The more the sub-limits, the more detrimental it is to you. Most private players do not have expense limits. While premium should not be the sole consideration factor, it is needless to say that you should not end up paying abnormally high premiums for a low coverage. Hence zero in on the coverage you need, keeping in mind the needs and size of your family and also your premium paying capacity.

Dynamics of a Health Insurance Policy:

Sometimes, it may work out to be less expensive to split the policy cover among your family members, rather than take a single family floater policy.  For example, instead of taking one family floater policy covering yourself, your spouse and 2 children, you can take 2 policies - one for you and one child and another for your spouse and your other child. Work out the different options by adopting some smart engineering while making your decision.

With increasing medical expenses, it is recommended to take a family floater cover of atleast Rs. 10 lakhs, as hospitalization expenses tend to be very high, especially in metros. In addition, you can opt for a super top up cover, with a deductible which can be met from your existing policy. As top up covers come with various restrictions, readers are recommended to explore super top up strategy, depending on your family requirements. Also, when you opt for a super top up cover, it is better to take it from the same insurer as your base cover, as this will make logistics easier.

Many people tend to ignore purchasing a secondary health insurance cover and rely solely on the insurance cover provided by their employer. However, remember that this can be dangerous, as factors such as change of job, waiting period between job changes, cost cutting by employers, retirement or the initiative of starting your own venture will necessitate a secondary insurance. Read our article on why you need a secondary health insurance.

Important parameters in a Health Insurance Policy:

Age of insured: As mentioned earlier, the maximum age of entry and the renewal age are critical aspects, as healthcare costs shoot up after you become 60 years. Policies by Cigna TTK, HDFC Ergo and ICICI Lombard have no limit on the maximum entry age. In addition to the entry age, also look at the maximum renewal age. Many policies offer a lifelong renewal which is good for you.

Sum assured: You have to decide the coverage you require based on the number of members in your family, as well as your family needs. In today’s scenario, a family coverage of even Rs. 5 lakhs or Rs. 10 lakhs looks low. Choosing a high sum assured also means paying a high premium. Therefore you must choose your coverage based on your premium paying capacity as well.

Premium amount: Most companies offer premium based on the age of the insured. We analysed premium amounts for 11 companies, for an individual aged 30 years, his spouse and 2 dependent children, for a Sum Assured of Rs. 10 lakhs. For those insurers where the maximum sum assured option was less than Rs. 10 lakhs, the premium for this maximum amount offered was calculated. While taking a health insurance policy, it must be remembered that the premium cost differs across age brackets. It is important to note how the price changes across age groups. One should also try to ascertain how the premiums have been increased in the past by the various insurers. While premium increase needs to be done in accordance to IRDA, it is seen that the rate and frequency of premium increase is usually not disclosed on the websites of the insurers. You should ascertain this with the company itself or with any insurance broker, who can help you understand if the historical premium increase has been arbitrary.

Pre- and post-hospitalization time period: Generally, companies cover medical bills for 30 days before the hospitalisation and 60 days after the hospitalisation. However, policies by Apollo Munich, Bajaj Allianz, Cigna TTK, HDFC Ergo and Reliance offer a higher pre hospitalization period of 60 days. Similarly a higher post hospitalization period of 180 days is offered on policies by Apollo Munich and Cigna TTK, while it is 90 days for policies by Bajaj Allianz and HDFC Ergo. Understandably, the higher the time period covered, the better it is for you.

Sub-limits and Co-Pay: Sub-limits mean expense heads have a capping, and you will have to shell out beyond this limit from your pocket. Co-pay requires you to bear a part of the claim, while the insurer will only consider, say 80% or 90% of the amount claimed. This is usually characteristic for claims of people beyond a particular age or if the treatment is in particular areas or in non approved hospitals. Companies like New India Assurance, Oriental Insurance (silver plans), Bajaj Allianz, Religare, Star Health and Universal Sompo have this clause. If you fall under their criterion for determining Co-Pay, it is better to avoid such policies.

Major Exclusions: All policies give a list of items which are specifically excluded from coverage. All pre-existing diseases are generally excluded for a period of 4 years (in some cases 3 years) from the policy start date. Policies also specify an initial waiting period of 30 days (90 days for Max Bupa), during which all diseases are excluded. Understand exclusions and see if you may need any of those exclusions in future (eg; maternity benefits); if yes, it is better to avoid such a policy.

Additional benefits: It is best to choose a plan which is comprehensive and covers the maximum risk possible. Even if the sum insured is the same, there are other benefits you must check, which include OPD cover, maternity benefits, personal accident-death benefits, health check-up and domiciliary hospitalization benefits. Nowadays, there are policies which will restore your Sum Assured amount to original levels and offer no claim bonuses, which can be very beneficial. It is recommended to analyse the additional benefits in detail, by going through the company website or the product brochure before making the choice of policy.

Our observations on the policies analysed:

We have analysed health insurance products of 12 companies on the basis of several parameters. Apollo Munich’s Optima Restore and Cigna TTK’s Prohealth Insurance Plus Plan have decent benefits , although the premium for these plans is on the higher side. Policies by ICICI Lombard and Star Health have comparatively lower premium, but additional benefits are limited. The Health Companion Plan by Max Bupa and Religare’s Care Health plan are suitable if you are looking at no claim bonuses or restoration of sum assured amounts. However, higher coverage amounts in Religare attract co-payment. Although Oriental Insurance has a low premium, the silver plan comes with restrictions. So it may make sense to opt for the Gold variant. Reliance’s health plan has some unique benefits like a call option, policy service and claim service guarantee and free renewal (once in the lifetime) if the policy holder has a named critical illness. However, the sum assured option in this plan is limited. Universal Sompo’s plan has attractive benefits, some of which are generally not covered by health policies. These include maternity and child benefits, alternate medicine treatments, cover for people with AIDs and OPD treatment. In addition, features like No Claim Bonus and restoration of Sum Assured are also present.

HDFC Ergo’s health policy has a high premium and the sum assured option is also limited. Although Bajaj Allianz has some good benefits, the premium is among the highest of the policies analysed. Similarly, although the New India Assurance may be economical, there is a high co-payment of 20% in some cases, entry load applicability and a limitation in maximum sum assured.

Please note that we have only considered certain products offered by insurers. The above insurers may have other plans which fall under the health insurance category, which we have not considered. Readers are advised to check out all plans and choose the most appropriate one.

A detailed comparison of the policies analysed is available below. If you prefer to download the excel file, please click here. For more details, refer to individual company’s prospectus. Kindly note that this analysis covers offerings from major insurers only & this is not an all-product comprehensive comparison. The analysis is valid on the date being published.  

Last Updated on: 28 March 2015

Smitha Hari
Team GettingYouRich.com