Medical Insurance for Beginners | Basics of Mediclaim

All of us would’ve witnessed at least one Ad featuring a popular star on TV, briefing us all about taking up Insurance as early as possible. But have you ever thought about taking one? Even the most stable and strongest willed people from any walk of life will reel back in despair if met with Medical emergencies. One cannot anticipate the occurrence of an emergency situation, but one can very well be prepared to tackle it if the need arises. Vittae has attempted to explain the nuances of Medical Insurance for Beginners.

With the emergence of new diseases and a rise in Medical inflation, the cost of Hospitalization and Treatment has skyrocketed in recent years. In order to counter it and be prepared for any adverse situation for ourselves & our loved ones, “Medical Insurance” is a must have. One cannot afford to take chances over life!  

What plan is right for me? 

There is something for everyone here, for there are plenty of scenarios. And each plan has various particulars catering to the scenario. 

• If you want a plan just for yourself, an individual plan will cater well to your needs. Want to increase your claim amount? Upgrade to a top-up policy. 

• Have a family? Want to insure each member of it?  The family floater plan exists! Planning for a baby? The maternity plan can ensure a good beginning.

• Want to do something for your employees? To assure that you care for them, ensure that you get them covered by setting up a Group Insurance plan. 

• Want to ensure better health coverage for your parents after their retirement? The senior citizen plan can surely be of help. 

• Who could’ve guessed that COVID would suddenly come out of nowhere and cause chaos all over? Want to be ready to face another one? [ No, we don’t want one more to pop up, but still ] A disease-specific plan might help.  

Other than these, there is Term insurance, which facilitates the coverage of financial expenses of one’s family, once the insurer is no more. 

Knowledge of particulars 

Let’s understand this with an example,

You are standing in your Insurance Agency, to claim your insurance amount of, let’s say ₹1,00,000. Your vendor suddenly mentions that you will be sanctioned only ₹85,000. 

One can easily picture your confused face. But your policy has a particular called the Deductible amount, which you did not pay attention to earlier.

A deductible is simply an amount that you are responsible to pay towards an insured loss, where the amount will be deducted during a claim. 

If you haven’t checked this before, please check it going forward.

More such terms

• “Sub-Limit” –  a limitation in an insurance policy on the amount of coverage available to cover a specific type of loss.

•  “Room Rent Cap” –  In Health Insurance, coverage for Hospital room rent expenses are restricted to a certain limit as per the insurers’ terms and conditions. 

• One more example can be the “Waiting period”, which is the period of time the insurer has to wait for the Policy to become active for a claim to be done. 

As you can see there are some Cons, But the Pros exist too!

In order to avoid the hassle of Insurance claims during critical times since the mental state of the insurer may be at its best, options such as Cashless Facility and Third Party Administrators exist.

 With these options, all claims and settlements will be directly done between the hospital and the policy vendor, and these procedures will be handled by the Third Party Administrator, so the insurer can be at peace if he/she has a provision for these in his/her policy.

That is why it is also very important to look through the list of partner hospitals for each policy vendor. Cashless Facility is an essential term to look for within a policy and only partner hospitals have the provision to do so, so be sure to look at this carefully.

POV – You are India in “India vs USA” comparison:

Let the numbers talk, 

India	USA
514 million people in India have at least one form of Health Insurance	300 million people in the US are covered by Health Insurance
Mostly govt schemes are opted for Health insurance	Mostly private schemes are opted
An increase of 40% of insurance premium collection was seen in 2020 owing to COVID-19	Demand for COVID disease cover increased as most people were already under normal insurance coverage
Around two third or 41% of the population is insured	A whopping 92% of their population is insured

 It is safe to compare the statistics of the US and India in-terms of  Medical Insurance for both the countries are powerhouses who need to take their Health Care Budget seriously. 

Though the US has a lower population compared to India, the lack of awareness and knowledge is the reason why India lags behind the US in terms of the overall percentage of insurance holders.

COVID-19 proved to be an eye opener for Indians. But the need for awareness is now more than ever, as most of the population is still not under insurance cover. 

What to observe while opting for a Policy?

Since not all people are educated regarding the particulars and niche details to observe while opting for a policy, proper efforts need to be taken to read the terms present in the policy. But most often they are ignored as they are quite a dry & cumbersome read. Something like your terms & conditions.

* Investing in a policy at a young age can be very beneficial, as companies face a lower risk when compared to offering policies for middle age or senior citizens.

Premium: The amount paid every recurring period of time by the insurer towards the Insurance company, based on the type of policy.

* Domiciliary or Home Hospitalization coverage must be checked. 

* The waiting period must be low.

* Provision for a Cashless facility to avoid the hassle. 

* Network Hospitals in every city.

* Limits and Exclusions such as the deductible amount and waiting period.

* The claim settlement ratio of the vendor must be high, for maximum benefits through the policy. 

Claim Settlement Ratio: No. of Claims Settled  / Total No. of Claims 

Going through these points can help you take a policy that matches your needs. Similarly you can check for mutual funds

Conclusion 

As the saying goes “Prevention is always better than cure”, there isn’t a more apt line to stress the importance of taking up a health insurance policy. With the right thinking and right guidance, one can benefit more than the amount which they have invested. 

It’s never too late to opt for essential things. One also cannot afford to take second chances with certain things, so choose wisely.