DO YOU HAVE HEALTH COVER?

As medical needs and emergencies come unexpected, it's better to take a health insurance cover to tide over the expenses

 An increasing trend among nonlife insurers is to avoid selling health insurance policies as profits are declining in this business. This is seen more in the case of select public sector companies.
    On the other hand, life insurers like LIC are busy advertising the benefits of their newly-launched health plans. As a consumer, you are bound to be confused. So, let us throw some light on this situation.
    Health insurance is a catch-all term that covers three distinct policies. A health policy reimburses you the actual hospitalisation cost for treatment of any disease and is offered only by non-life insurers. Such policies are popularly called "Mediclaim" policies (Mediclaim is actually a brand name, which has now become a general term).
    The other two plans are offered by both life and non-life insurers.
    One can be loosely referred to as a "Hospitalisation Policy," where you primarily get a daily allowance for every day spent in the hospital. Some policies also provide higher daily allowance for stay in intensive care unit (ICU). Others have a provision for lump sum payment if you undergo any of the surgical procedures covered in the policy.
    The next type of health insurance covers critical illness. Given the increased stress and strain of modern life combined with unhealthy and sedentary lifestyles, most of us are prone to serious illness. But advances in modern medicine ensure that most of us survive these. This, however, comes at a cost and makes a serious dent in our ability to pay, either from salary or business. This is where a critical illness cover can step in and pay off a lump sum benefit.
    Most life insurers have for long offered these covers as riders (riders are covers for additional risks or to enhance the existing risk covers).
    Now, these critical illness covers are also being offered as standalone policies for specific illnesses like cancer. These policies are recommended for salary earners.
    A relevant question would be whether one would need a hospitalisation policy if s/he already has a Mediclaim policy?
    A Mediclaim policy only reimburses the expenditure incurred in the actual treatment of the disease/illness at a hospital. There are several other expenses that are typically incurred, which the Mediclaim policy does not reimburse. Expenses such as travel, attendant's lodging, loss of income (for both the patient and the attendant), pre-hospitalisation diagnostic tests, medicines among others can run up to as much as 30 to 40% of the total treatment cost. A hospitalisation policy takes care of these.
    You will find that the policies offered by life insurers are actually an addition and not replacements for Mediclaim policies.
    Remember, it is an absolute must that you and your dependents have adequate cover on your Mediclaim policy. It cannot be replaced by any other kind of policy.
    When it comes to hospitalisation and critical illness policies, life insurers offer excellent products. Such policies should be a necessary part of your risk cover portfolio.
    Our recommendation is based on the fact that policies offered by life insurers cannot be cancelled during their tenure. Non-life policies can be cancelled.
    Non-life insurers normally retain the right to terminate any contract of insurance, even during the tenure of the policy, by sending you a 30-day notice. In such cases, the insurer will then refund a pro-rata premium for the unexpired tenure of insurance. This right is exercised rarely but is not unknown for corporate insurance policies.
    Also, policies issued by life insurers guarantee a cover during their entire tenure. Non-life insurers may not agree to renew the policy at the end of tenure.
    Thus, if you intend to buy a Mediclaim policy, there is no choice but call a non-life insurer. For other two types of health insurance policies, our recommendation is to choose a suitable non-savings product offered by a life insurer.
    Harsh Roongta is CEO, Apnainsurance.com 

Fran Lebowitz  - "Life is something to do when you can't get to sleep."