Health Insurance: What You Need To Know During COVID

Health Insurance: What You Need To Know During COVID

These are cloudy, stormy times and it doesn’t look like the sun’s going to come out any time in the near future. This article -tough as it is to write- is important because we need to be ready for what is happening and what the future could possibly hold for us. Let us try to keep finances out of the worries mounting us, and look at ways in which we can strengthen our financial shield.

Let’s start with the basics:

1. Have some money in your bank account: Have at least 10%-15% of your salary in your bank account in case you need to make any urgent payments.

2. Have some cash on you: We’ve more or less lost the habit of keeping cash with us, but keep around INR 10,000 – INR 50,000 (depending on your income & needs) for unforeseen expenses

3. Do not rush to invest in Equity: Even though it is tempting to invest for quick results, but at the moment, liquidity is key.

Moving on, to the most important point: HEALTH INSURANCE.

It may seem expensive, but at this juncture, you need one. If you don’t have it yet, don’t wait around, get one immediately. Let’s go through some health insurance basics. How does it work and what do you need to know?

· You take health insurance for yourself and you pay a premium for the same (it’s like motor/car insurance), where you get sick & hospitalised, the health insurance company pays your bills for you and you do not have to worry about it.

· Type of Health Insurance:

1) Individual - You can take health insurance only for yourself or 'one single' person like either of your parent/sibling.

2) Family Floater Plan - You take one insurance cover for all your family members.

· Things to keep in mind: You must disclose all your existing health issues in the insurance or they may reject your claim on the basis of incorrect/incomplete information.

It doesn’t end with just having health insurance you must know its features as well. Most Insurance policies provide COVID cover; check the features and confirm it with your insurance provider. In case it doesn’t, you should consider porting it to another insurer that has this feature. Corona Kavach or Corona Rakhshak Policies will cover COVID care at home.

Prerequisites for using your insurance policy for home care under COVID:

· A COVID positive report from an ICMR-approved lab

· Doctor's prescription for home isolation and treatment

· Note that antigen reports are not honoured by the insurers. The reports have to be RT-PCR having Specimen Referral Form (SRF) ID.

· There are two conditions when domestic hospitalisation is recommended. First, no medical facility available at the hospital, and second, when a patient's condition is too serious to visit a hospital. So, this is not really a COVID specific thing. In normal cases also domestic treatment is covered under health insurance policies

· This involves medication, nurses' and doctors' visit at home to measure vitals and tests such as CT scan X-ray and of course COVID. Essentially, all medical expenses until the person tests negative are covered. However, there is no concept of pre- and post-hospitalisation expenses in home treatment.

· Also, note that for mild COVID cases where you're treating it at home using antibiotics, you cannot claim insurance on the same.

You should also know that hospitals cannot deny cashless Health Insurance claims. If they do, here’s what you must do:

· IRDAI directed Insurance companies to ensure the availability of cashless facilities with all empanelled network hospitals by putting in place a continuous communication channel with all the network providers.

· Cashless claim is available only at empanelled hospitals/network hospitals which come under your respective insurance provider. You can check this by visiting the website of your insurance company.

· Keep a list handy of all network hospitals for your insurance provider, so that if the time comes you won’t have to run around in search of a hospital.

Finance Minister Nirmala Sitharaman had asked IRDAI chairman SC Kunthia to “act immediately” to address the complaints of denial of cashless claims by insurance companies. She also mentioned that more than 9 lakh COVID-related claims for Rs 8,642 crores have been settled by insurance companies.

In the meantime, you can reach out to us and we shall help you plan it out better. We want to help you sort your financial stress one day at a time. Let’s be strong and take care of each other.

Uncategorized - 05/09/2021

Things To Do After You Buy A Health Insurance

Hi there

Usually, we have health insurance and discuss how to get health insurance. In this article, we discuss things to do after you buy a health insurance plan.

1. Understand claim procedures

In the case of emergency hospitalization and in the case of planned hospitalization find out the documents and steps necessary to intimate the insurer. Copy this information from the insurer or TPA’s website onto a word processor, print it, and keep it along with the policy document and policy ID card.

2. Recognise that ‘cashless’ is not a right!

Health insurance comes with a right to claim reimbursement. However, cashless claims are more of a privilege than a right. It is quite possible that the insurer may either deny cashless or allow it partially and ask the insured to claim the rest of the expenses via reimbursement after the hospitalization is complete.

3. Prepare for the next premium

Even if you choose not to increase the cover each year, do not assume the premium will be the same next year. The premium could increase due to other reasons – age of individuals, the risk profile of the entire group covered by the group, underwriting test, and perhaps medical checkups too. Start an online recurring deposit that matures 6-8 weeks before the premium is due. If you are comfortable, you can choose to put money aside in a liquid fund for your insurance.

4. Understand the implications of sub-limits

There is nothing wrong with buying a policy with room-rent sub-limits. The only precaution is to ensure that the room-rent is always lower than that allowed by the sub-limit. This is because every kind of hospital fee (medicines, doctor fees, etc.) is linked to the room rent. So if you choose a room rent higher than that allowed by your policy, you will only be reimbursed (or paid via cashless) a portion of the hospital bill.

5. Recognize the impact of non-medical expenses

Hospitalization is not only about paying hospitalization fees! There is a huge list of non-medical expenses that any patient could incur. There are some administrative expenses, household expenses (while you are hospitalized), support staff expenses, and some expenses which get rejected in your insurance. Even if you believe that your health insurance cover is sufficient, these expenses have to be paid. This is where your emergency fund will come in handy. So ensure that you have one in place.

6. Health Cover for family members

If you are the earning member it is very crucial to have your own insurance but it is equally important to have health insurance for your family members, as any medical emergency for them would result in a financial setback for you and the entire family.

If the budget is a constraint you can consider taking up a family floater plan - watch our youtube video on this.
https://www.youtube.com/watch?v=F0JNvA5a_eQ&ab_channel=WealthCafeFinancial

Health Insurance could be considered as one of the trickiest insurances to buy as the health issues are very different for each person and then each insurance company has varied insurance needs. As a practice, do understand the various clauses of your insurance and have an emergency fund in place to be stress-free of any unforeseen health issues.

Disclaimer: - The articles are for information purposes only. Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. You must consult a financial advisor who understands your specific circumstances and situation before taking an investment decision.

To learn more - you can check our course - NM 102: Build a Safety Net. Use code SAVE20 for 20% off.

Insurance - 10/09/2020

Health Insurance: Single Plan or a Family Floater Plan?

Hello fellow investors

With COVID-19, the one thing that everyone has realized is Health insurance is a must! We all need adequate Health Insurance cover and at a good price. Because whether to have Health Insurance or not is no longer a point of discussion. In fact, now we want to ensure that everyone in the family also has Health Insurance.

We have been asked many questions about whether you should opt for a stand-alone health plan or a family health plan; and whether to opt for a top-up plan afterwards. We are going to break down these concepts for you.

How much Insurance should you have?

Before getting into the discussion of what type of plan, it is important that you know how much insurance is enough for you. Ideally, if you live in a tier 2/3 city you must have a cover of at least 5 lakhs and if you are in a metro/tier 1 city you must have a cover of at least 10 lakhs. These are indicative numbers based on the cost of health incurred in different places and you can always take a higher cover.

What is an Individual Health Insurance policy?

In the case of individual cover, the policy provides specific health cover for each member covered in the policy. You can decide to have a higher cover for the working member and a smaller cover for the children. Each family member will have a dedicated sum assured under the policy.

For example, you can buy an Individual Health policy that gives a cover of INR 10 lakhs each to yourself and your spouse and INR 6 lakh for your elder kid aged 15 and INR 3 lakhs for your younger kid aged 10. The cover amount is specific to each person and not shared among the different members.

What is a family floater plan?

In the case of a family floater policy, all family members are covered in a single policy. Unlike individual policies where there is a dedicated sum assured, here there is a single “floater” sum assured which is shared between all members of the family.

For example, if the family in the above example takes a family floater policy with a sum assured of INR 10 lakhs, all the four members of the family share the INR 10 lakhs sum assured. That means the insurer’s maximum liability towards the entire family for a particular year (irrespective of which individual gets hospitalized) stands at INR 10 lakhs.

Under the family floater policy, medical reimbursements can be availed by any or all of the members subject to the total sum Insured.

Let us compare the prices of family floater and individual policies to understand better:

Case 1 - A couple

Family floater plan premiums are determined based on the age of the older person. Given that this is a relatively younger couple, their premiums are not very different.

Case 2 - Parents with 2 children

In case 2, for older parents, there is a significantly higher premium being paid for a family floater plan. In case there is a predetermined illness that would further push the premium for the entire family. However, the 20 lakhs cover under the floater plan would be available to each family member thus increasing the cover amount at a higher premium.

However, where you have a cash crunch, you can go for a floater plan of 5 lakhs wherein the cover of 5 lakhs is available for all members with a reset clause for a cheaper price. You save around 10 K per annum in the premium costs where you go for a floater plan of 5 lakhs for the family.

The reset clause: Family floater plans come with a reset clause that allows for a 100% reset of the sum insured once in a policy year. This option automatically comes into operation when the sum insured (including the accrued additional sum insured, if any) is already used by one insured person and hence is insufficient for the other. The reset of the policy happens only for an unrelated illness.

For example: In the case above if the husband is sick for malaria and makes a claim of 3 lakhs in a year and later wife gets admitted for a different health issue like blood pressure and has a hospital bill of 4 lakhs. The floater plan will cover it as it would have reset the sum assured. But if the wife is admitted for malaria itself and the bill is of 4 lakhs, only 2 lakhs (to the tune of the original sum assured of 5 lakhs less 3 lakhs claimed by husband) will be payable by the insurance company.

A Family floater policy is value for money and comes a bit cheaper compared to individual policies and that’s a plus, especially for young families who are tight on budget for their insurance spending.

No claim bonus: If you do not make any claims under the policy any year, a percentage of your sum insured, say 10%, is added each year to your sum assured. So if in 2019, I do not make any claims under my policy which has a sum assured of INR 5 lakhs, in 2020 when I renew it, my sum assured is increased to INR 5.5 lakhs without any increase in my premium amount. The negative of a family floater plan is that in case of a claim by even one member under a family floater, the entire No Claim Bonus (NCB) is nullified for the year under the policy whereas the same is not true for individual policies.

Top-Up Plan

A top-up plan is a regular health insurance policy that covers hospitalization costs but only after a threshold limit, known as a deductible, is crossed. A deductible is that portion of the claim amount that is not covered by the insurer and has to be paid by the policyholder before the benefits of the top-up policy can kick in.

A top-up plan, therefore, is a cost-effective way to increase your health insurance. You can take a base policy and a top-up over above that policy. This way you can use your base health insurance policy to make a claim up till the deductible amount and use your top-up plan for any payments over that.

Where you want to increase the sum assured of your policy, you can do that only when the policy is due. Top up gives you the option to increase the sum assured at a minimal cost during the year. Hence, Top-up helps you to increase the base sum assured amount for your insurance needs.

What should you do?

The health insurance that you would take would depend upon the age of the oldest member in your family, the number of members, and the premium you are comfortable paying for the same. It would be interesting to check various options and choose which one best suits your needs and pockets.

It is advisable to have separate health insurance for older people or those who are susceptible to illness/hospitalization. By doing that, you are protecting the no-claim bonus clause of the policy and also not paying a higher premium for other insurance.

Hope this helps you understand your insurance needs better.

Happy Investing!

To learn more - you can check our course - NM 102: Build a Safety Net. Use code SAVE20 for 20% off.

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Insurance / Money tips - 08/12/2020

6 things to note before buying a Health Insurance

Health Insurance is one of the most important insurance products to own. In fact, it is a mandatory financial product to own after-term insurance to achieve your financial well-being.

We have listed below the things to note before buying health insurance.

1) Decide the Sum Insured from the Long-Term perspective

The biggest mistake one makes when buying Health Insurance, is to consider the expenses that you may incur today. However, in reality, health insurance is bought for 20-25 years from now.

Hospitalization costs today would be ranging from 50,000 INR to 300,000 INR. Assuming you are 30 today, at modest average healthcare inflation of 7.5% for the next 20 years, single hospitalization bills will range at around Rs. 13 Lakhs when you are 50 years old.

It is very important to think in the long term while deciding on the cover of the policy and hence, you must take a higher cover.

2) Know about the things that you must ignore and consider.

There are many features in a health insurance policy. You must have read the same in the insurance brochures and pamphlets. It is important to be able to distinguish between the features that must be considered versus the add-on features which should not be your deciding factor.

Features like Ambulance, Daily Hospital Cash, Domiciliary, and any other benefits that don’t get used often, have low consequences in your health planning. These should be overlooked so that you could focus on the main features like the network of hospitals, fees for a doctor consultations, Room rent Limit, and ICU charges. Check if they are paying for medicines or not and these kinds of expenses make the major part of your overall bill.

Things like Ambulance charges are not more than Rs 2,000, if you have to pay it from your own pocket, even that it's totally fine. Why choose a policy based on this feature? It's always a bonus advantage and nothing else.

3) Know about the Sub-limits in your health insurance.

Many Health Insurance policies have room rent capping, which means you are eligible to claim expenses of the room renting up to the decided cap limit. In case you opt for a room above this cap, you will have to bear the additional proportionate expenses on your own. Let me give you an example

Let's say, as per your policy you are room rent limit is Rs 4,000 per day. Now if you get hospitalized and you choose a room that has room rent of Rs 10,000. You might think that you will just get 4,000 per day for room rent from the insurance company and other charges you will get as per the limit. But that's not true.

Other hospital expenses such as doctor's consulting fees, medicines, reports, scanning fees, etc are also dependent upon the room that you opt for. If you select a room that is higher than the room cap set. The expenses based on the room rent cap will be reimbursed not on an actual basis but based on the cap set. Other expenses are also proportionate to the room capping

Hence, your preference for health insurance should be in the following order:

Policies with Private Room eligibility.
Policies with No Room Rent capping.
Policies with Room Rent capping.

4) Check for the cost-sharing issue or the co-pay

Many private health insurance companies have a co-pay policy where you have to bear 10%-20% of your health bills. With a big surgery or a huge expense, this amount can also be huge and you may not be in a position to bear it when the time comes. Hence, ensure that all the major expenses of your health bill are covered in your insurance.

5) Tax deduction under section 80 DD of the Act

Ensure that your children, spouse, and parents are also covered by appropriate health insurance. Anyone can suffer from any health issue and insuring them will reduce your personal financial burden. The benefits of getting your family covered do not end at the level of security rather it offers great tax benefits as anyone paying premiums for parents, apart from themselves, spouse, and children can claim deductions up to INR 55,000, according to Section 80D.

6) Don't be late in buying a health insurance

We always advise that term insurance and health insurance should be bought at the earliest possible. These financial products are obtained when you are in good health and young age to reduce the cost of them, After you have developed any health issue it will be very difficult to obtain a health insurance policy without co-pay criteria.

To learn more - you can check our course - NM 102: Build a Safety Net. Use code SAVE20 for 20% off.

Insurance / Tax - 01/11/2019

5 Myths about buying insurance online

Nowadays, people are buying houses and booking vacations across the world online but are skeptical about buying an insurance product online. People are not very comfortable to go online and purchase insurance. This is not your mistake; the community of offline insurance agents in India is huge and strong, that it is very difficult to get past them to take a decision for your own good. In this article, we have discussed buying insurance only directly through the insurance companies' website. In my article 'What are the insurance aggregators and are they really helping you?', please read about my reasons to avoid them generally. To help you do the same, we have listed below a few lies/myths which are often told to you and thus, you believe in them while buying insurance online. They are as under:

You can read details about term insurance in our article http://www.wealthcafe.in/things-to-note-before-buying-a-term-insurance/

Myth 1 - Buying policy online is too difficult. There are many complicated terms that you will not understand Buying policy online does not involve too many steps anymore and there is an explanation for each step. If that does not help you, there is a chat box or help guide on each website which shall answer most of your questions making it a very simple process for you to buy the policy online. There are features like premium calculator, payment of premium monthly, some discounts etc, which are generally not offered to you by your offline agents as that would reduce their commissions.

Myth 2 - You will not be able to cancel your policy if you buy it online. The terms and conditions of a policy document remain constant whether you buy it online or offline. You will always get a free-look period of 30 days to decide whether you want to cancel the policy or not. You can use it irrespective of the mode of purchase of the policy. We have specified about the same in our article - Free-look period in Insurance.

Myth 3 - If you are buying online, your claim will not be settled. Recently, when I was hospitalized, my agent did not help me with anything for the claim adjustment but gave me the number of my relationship manager (who is an employee of the insurance company) who helped me file my claim and go through the entire process of claim settlement. Thus, there is no guarantee that your agent will be able to do anything extra for your claims. Most of the insurance companies have a very robust customer care service nowadays. Where your claim is genuine and you have all the required documents, it should not be a great problem to claim your money from the insurance companies.

Myth 4 - My personal information and payment details are not secured. When you are booking international hotels, expensive electronics, even your house through the internet and not worry about the payment so much. then why such worry for buying insurance online. All the insurance companies also have a reputation and clientele base to maintain, they cannot risk developing an insecure online platform for the purchase of insurance.

Myth 5 - There is no guidance on which policy is apt for you Our blogs have enough content to guide you on which insurance policy you need and how much cover is apt for you. Refer to our Article. If required, consult a financial advisor to understand the same. An insurance agent is not an advisor and he/she may not sell you what is apt for you but what will get them a higher commission. This is why insurance agents do not sell Term plans but are always selling endowment plans. At least when you buy online, you do some research yourself and then take a decision on what is good for you but are not influenced by marketers. Buying an insurance product is so easy and it does not take much time. In fact, some insurance companies, give additional discounts when the insurance is bought online (as they do not have pay commission to anyone on the same). All your bank details get verified easily, you don't have to go through the hassle of giving a cheque, sign so many documents or the worry of incorrect details going anywhere. Next time when you are renewing your premium, or are planning to buy insurance, take that plunge and purchase it online to experience the benefit of the same.

Insurance - 11/30/2018

Health Insurance for a New Born Baby

The insurance policies that cover the child from their day of birth are rare. Once the baby completes 90 days, they become eligible for health insurance. Adding the child to the health policy of their family is also an available option like a family floater health insurance policy.

Age: Children cannot be insured from day one since that involves a lot of risks. But to cover them, one can add them to their parent’s policy which can cover early vaccinations and postnatal care. After completion of 90 days, the baby is eligible for insurance.

Options: The insurance company must be made aware of the child’s birth, within the seven days of birth. Then the insurance provider lets you know the applicable plans to cover the baby. The plan advised offers insurance cover to the baby after 90 days, and more options can be added while renewing the policy.

Required Documentation: While renewing the policy, a set of documents like a birth certificate and discharge card are to be included for submission.

Premium: After the submission of the required documents, the premium will be calculated and informed that when paid the health insurance policy will be covering the child.

It is very important to add your child to your health insurance. The costs related to the newborn baby can be huge and can shift your entire financial planning. A small increase in your premium can secure you from unforeseen financial expenses of your newborn and lets you enjoy the time with them carefree.

To learn more - you can check our course - NM 102: Build a Safety Net. Use code SAVE20 for 20% off.

Insurance - 08/19/2018

Is your employer’s Health insurance sufficient?

I was personally always covered by the health insurance/medi-claim provided by my previous employer and thought that there is no need to have health insurance coverage for myself separately. The same even covered all my family members. It catered to all my health needs so I never looked around for additional health insurance.

There was some amendment in the health insurance scheme provided by my previous company and we were asked for our approvals on the same. During this time, I actually read the medi-claim policy of my employer. I noted the following points.

The medi-claim was a 20% co-pay health insurance (i.e. every time there is any claim to be recovered, I have to personally bear 20% cost of the medical bills as the insurance company will reimburse only 80%).
Siblings are not covered under the health insurance policy (my younger sister did not have a health insurance cover).
I was paying INR 350 per month towards critical illness diseases and an additional cover of my parents (i.e. INR 8400 per annum towards a health insurance premium which did not even give me a 100% cover).

I knew there were certain immediate action points that I must take.

I took a basic health insurance policy for my sibling.
I also got a health insurance policy for my mother. I had been delaying it for the pre-existing clause and the policy was expensive due to her age and blood pressure issues. However, I realized the more I push it, it is going to become more expensive.
When I decided to quit my job, I bought a health insurance policy for myself even before I put in my papers. In fact, I should have bought it the day I realized it was 20% co-pay. Nonetheless, later than never. I had quit my ex-employer in January 2016 and in February 2016, I had to be hospitalized for typhoid and all the expenses of my hospitalization were taken care off by my health insurance. Some may call it lucky, I call it smart financial planning.

Thus, one cannot completely rely on the health insurance provisions of the employer. I have listed below various reasons why you should not rely 100% on your employer’s health insurance policy.

When you change your jobs – The earlier you buy insurance, the better and cheaper it is for you. Thus, if at the age of 40, you wish to change your job or retire early, your new employer may not provide your health insurance and buying one now could be very expensive or not possible.
An employer may decide to change the configuration of the health insurance: The employer may even decide to reduce the members of your family to be covered at its expense or update certain conditions like introduce co-pay, refuse to cover pre or post hospitalization expenses etc. In such a scenario, though you would still be covered, the expenses to be incurred by you will definitely increase.
Post-retirement: The health insurance provided by your employer shall in majority cases not extend post your retirement. Health Insurance may not be available for you in the years where it is most needed and you may not be able to obtain one during your retirement. Hence, buying a basic health insurance plan today itself (in spite of having one from your employer) is one of the major steps you can do for your financial plan.

Many of us do not buy the right financial products merely out of laziness, endangering our savings and future financial plan. Almost everyone knows the cost associated with a sudden health problem, in spite of that many of us refuse to obtain good and appropriate health insurance for self.

Read more about health insurance and things to focus on in our Article http://www.wealthcafe.in/health-insurance-things-to-note/

To learn more - you can check our course - NM 102: Build a Safety Net. Use code SAVE20 for 20% off.

Insurance - 01/13/2018