Tag: critical illness

Know the two circumstances under which insurers waive premium

Personal Finance

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Two neighbours’ daily routine of watering plants leads to an interesting conversation.

Sindu: The hydroponic farm is open for everyone and they have waived the entry fee too. We should go visit the farm.

Bindu: I am not sure. I think the farm will not charge an entry fee provided we make a purchase for at least ₹3,000.

Sindu: So what? We get nice plants. It is always about cost versus benefits. Just like in life insurance.

Bindu: I get your point. That is for plants but how so for a life policy?

Sindu: Life insurers offer ‘waiver of premium’ clause where they waive the premium if the person insured meets with an accident resulting in disability or if he/she falls critically ill.

Bindu: Interesting. Can we waive the premium? I mean can we choose not to pay the premium?

Sindu: No. Waiver is something that is offered by a life insurance company. If you stop paying the premium, that will lead to termination of your policy and you will not be given any life cover. Premium is waived only under two circumstances as I just mentioned. A few insurers do waive the premium if you report any terminal illnesses as well. The list of illnesses (both critical and terminal) will be available with the insurer. So, be sure to check it.

Bindu: For how long do I get the waiver?

Sindu: Your outstanding premium gets waived for the entire policy period. As a policyholder you continue to enjoy the life cover until the policy term.

Bindu: I am assuming this is available only with term policies?

Sindu: Mostly yes. But since it is a rider, life insurers may provide it with other life policies as well. This will be mentioned in the policy document. This rider may be available with a few child insurance policies as well. The ‘waiver of premium’ rider gets activated when the parent passes away. It ensures that the policy continues to be in force and insurers invest the premium regularly, and the maturity amount is given to the child after the promised number of years.

Bindu: Is this an in-built clause in life policies?

Sindu: No. Mostly, insurers offer this as a rider, which means, you will have to cough up additional premium for it.

Bindu: Of course I should pay extra. So, how do I decide if I should go for this rider?

Sindu: It depends on how much premium you can pay comfortably. This rider will cost you extra. There are products in the market that come with built-in riders. You can consider such policies as well, if you want to opt for this rider. But here too, the policy will cost you extra when compared to a plain-vanilla term cover.

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Should you buy a critical illness cover for yourself and family?

Personal Finance

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We are looking for a suitable critical illness policy for our son (39 years) and his wife (32 years). Both have independent term plans for ₹1 crore and ₹50 lakh, respectively. They also have a medical insurance plan with a base plan for sum insured (SI) of ₹3 lakh and top- up plan for ₹15 lakh which also covers their eight-year old daughter. We are now looking for a suitable critical illness policy to cover both the husband and wife for an insurance of ₹50/25 lakh and request you to suggest a policy that is rich in features but does not pinch the pocket.

Meenakshi Guar

Your son and his family are adequately covered for health. Given their young age and a small daughter, a health insurance cover with total SI of ₹18 lakh should suffice. If they want to buy a critical illness (CI) plan as it will provide a lump sum in hand at the very diagnosis of a critical illness, it is suggested that they first think through the purpose of buying the cover. If they fear any particular illness, they should go for disease-specific covers. There are special diabetic covers and also heart and cancer care plans in the market. ICICI Prudential Life’s Heart and Cancer Protect (covers 18 major and minor hearts ailments cancer including carcinoma-in-situ and early-stage cancer) is a good option. On the other hand, if they are looking for a plan that would cover all major critical illnesses, they can choose from a bunch of plans in the market that include products from life and general/health insurers.

Critical illness policies offered by general and health insurers come with life-long renewal option as per guidelines of IRDAI. Life insurers can’t offer life-long renewal ; their CI plans would end after a specific term. That said, note that life-long renewability is valid only till the policyholder is in good health. Once she/he gets diagnosed with a major illness and makes a claim, be it a policy with a life insurer or a general/health insurance company, she/he can’t renew it again. Future Generali Life’s Heart and Health plan (covers 59 critical illnesses) is an option they can consider here. It offers cover of a maximum of ₹50 lakh. Aditya Birla Health’s Activ Secure Critical Illness plan that covers 64 critical illnesses (including angioplasty and pacemaker insertion) can also be considered.

HDFC ERGO’s my: health Women Suraksha, is the only comprehensive women health policy in the market (covers osteoporosis too). Your daughter-in-law can consider this. It offers six different plans. One of them is a comprehensive critical illness cover that will pay for 41 chronic illnesses, including kidney failure, end-stage liver failure, Parkinson’s and Alzheimer’s along with cancer and heart ailments. The policy is offered with multiple SI options, ranging from ₹1 lakh up to ₹1 crore. The policy allows all women in the family including mother and mother-in-law to be covered under a single plan.

All suggestions mentioned above are comprehensive insurance plans. So, in terms of premium they may not be the cheapest in the market.

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₹1-crore health plan is a sensible idea

Personal Finance

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Until a few years ago there were no options to get a sum insured (SI) of over ₹5 lakh in health insurance in India. Today, there are a handful of insurers offering ₹1-crore health cover for self and family. However, is there a need for ₹1-crore health insurance? Also, will one get benefits such as treatment outside India and a deluxe room while in hospital?

Before we delve deeper into this topic, note that health insurance plans are indemnity covers that pay for the medical bill on hospitalisation up to the sum insured. They are not like the critical illness insurance plans that pay the full amount of SI at the first instance of hospitalisation irrespective of the hospital bill.

There are still reasons for you to go for health insurances plans and not critical illness plans if you want to cover hospitalisation expenses and ₹1-crore health cover makes more sense.

 

The logic

In regular health insurance plans, you can make claims on the policy as long as there is SI left in the plan; the cover is renewable life-long. In contrast, the critical illness (CI) plans are one-time covers; once claimed, the policy pays the full value of cover and terminates; you can’t renew the policy again the next year. But most critical illnesses recur after a few years and by that time if you had exhausted all the money form the first claim, you will be without any back-up to pay for hospitalisation. So, it is recommended that you buy a health insurance policy that by regulation is renewable life-long and can take care of the recurring medical expenses throughout your life time.

The next question is how much cover? Treatment cost of chronic ailments, including cancer, run into lakhs of rupees. Rather than guessing how much cover you would need, you can take a ₹1 crore cover at the age of 35-40 years for your peace of mind.

As you age, if you find the premium expensive, you can reduce the SI by a few lakhs, but you would still continue to enjoy a large cover without fresh underwriting. On the other hand, if you had say ₹5-10 lakh cover and in your mid-40s want to increase the SI to say ₹25-30 lakh, there will be fresh underwriting and waiting period, and it can’t be easily done.

Currently, the ₹1-crore health plans are not expensive at all. Check this: For a 35-year-old male, in case of Max Bupa, the annual premium for ₹25 lakh SI plan is ₹14,626 and the cost of ₹1 crore plan is a lower at ₹10,992. Similarly, in case of Aditya Birla Capital, while the annual premium for ₹25 lakh SI is ₹11,245, the premium for ₹1 crore cover is ₹9,557.

Insurers price the ₹1-crore plans cheaper, assuming there are rare chances of claims over ₹25 lakh.

One thing to note that both the above ₹1-crore plans are combo plans – of base policy of ₹5 lakh and a super top-up of ₹95 lakh. The super top-up will get triggered the moment the base policy SI is exhausted. Since both the base and super top-up covers will be with the same insurer, there will be hassle-free claims process.

For a single plan of ₹1 crore, you can go for Care Health Insurance’s Care Advantage, but it is more expensive than both plans mentioned above.

A ‘no-frills’ plan

If you think that the ₹1-crore health plans will come with benefits of international coverage and high-end deluxe rooms in hospitals, sorry. There are no added frills in the ₹1-crore plans. These plans have the bare minimum necessities for someone looking for a hospitalisation cover. That said, they cover single private room accommodation, come with NCB, and cover all-day care procedures as regular plans and pre/post-hospitalisation for 30 and 60 days respectively, as usual. In Care Health’s Care Advantage plan for ₹1 crore, however, all category rooms, including suites are covered.

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Tips for buying a good health cover

Personal Finance

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The Covid-19 pandemic has taught people the importance of insurance . If one falls sick and is in need of hospitalisation, not having an adequate health insurance plan can impact your finances . Also, the financial setback that comes with pre-hospitalisation costs, OPD expenses, medicines, diagnostic tests, etc. can be avoided if one has a comprehensive health insurance plan. Here’s a checklist on choosing a health insurance cover:

Extent of coverage

One should choose a policy that covers not just hospitalisation, but also related medical costs, together with outpatient treatments and check-ups. Besides, check for policies that boost sum insured for every claim-free year. Also, there are policies that increase the sum insured every year even if there is a claim. These features will help you be in tune with rise in future medical treatment and hospitalisation costs.

Be sure to check exclusions, specific waiting periods, conditions for pre-existing diseases as well as other things such as number of daycare procedures included or specific benefits like maternity, depending on one’s life stage.

Disease-wise sub-limits

Different plans will have specific limits on the benefits that can be claimed. These can vary from a limit on sum insured for specific diseases or limits on amounts payable towards certain medical expenses. This is termed as sub-limit. So, an insurance plan with a sub-limit will impact one’s out of pocket expenses, as a policy holder will have to bear the expenses. Thus, it is advisable to opt for a plan with no disease-wise sub-limits.

Take note that hospital charges are linked to the type of room or the room rent you have taken. It is important to check the room rent and ICU sub-limits of various health plans before finalising on one. Generally, sub-limits in the plan makes the insurance policy look cheaper.

Restoration benefits

You may claim for an illness and, God forbid, there could be multiple unrelated illnesses or injury that require you to get hospitalised.

Restoration cover restores the sum insured any number of times under the policy (for unrelated illness/injury) to additional 100 per cent in a policy year. This is provided the existing sum insured, including cumulative bonus, is insufficient to settle a claim.

Ease of claim process

Select insurers whose claims processing service is fast and accurate.

A simplified claim filing process can help you to conveniently access digitally and on phone for expeditious cashless and reimbursement claims settlement

Network of hospitals

Check the network of hospitals under the policy that offers cashless facility and the proximity to one’s neighbourhood. In case one travels frequently, check hospital network across the country so that a policyholder can continue to get treated from his/her preferred choice of hospital.

Critical illness cover

With non-communicable diseases, including cancer, cardiovascular diseases, stroke and diabetes on the rise, it is always prudent to choose a health policy that could help cover critical illnesses. However, this comes with a price and the decision needs to be made based on its affordability.

It’s also important to look for additional benefits and riders such as cumulative bonus booster and rewards for healthy lifestyle, among several other factors.

These tips can come in handy while investing in a health insurance plan that is comprehensive and best-suited for one’s family. After all, an economical and comprehensive health insurance plan is much better than inflated medical bills.

The writer is MD & CEO ManipalCigna Health Insurance Company Limited

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