Tag: health cover

Demystifying restore benefit in health insurance

Personal Finance

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Since the outbreak of Corona virus many people have filed health insurance claims, resulting in partial or complete exhaustion of their sum insured (SI) or health cover amount. While the claim would have reduced the policyholders’ SI, most health policies in the market come with a built-in back-up option. In other words, insurers fully reinstate the original SI once it is exhausted. This means after the entire cover amount is used up in a policy year, there will still be a cover available to the extent of the SI.

The reinstatement of SI feature is also known as restore, recharge, refill or reload feature across insurers and is available in case of hospitalisation. But there are minor drawbacks to this feature. Here is all what a policyholder should know about this benefit.

How does it work

Almost all health insurers offer to refill your original health cover amount post a claim but the process varies across insurers.

A restoration of SI in your health policy can happen in two ways. One, an insurer refills the used-up portion of SI only after complete exhaustion of the policy amount. Say suppose, your health cover is ₹10 lakh and during the policy period you utilise the entire amount. Then, the refill feature come into play and reinstates your cover up to ₹10 lakh, which was your original SI. But if you claim only ₹5 lakh in this scenario, your SI stands at ₹5 lakh only. For instance, policies including Manipal Cigna’s Pro Health Insurance plan, Activ Health from Aditya Birla Health insurance, ICICI Lombard’s Complete Health insurance and Star Health’s Star comprehensive plan offer this benefit.

Two, there are some policies in the market which offer to reinstate the cover even if there is partial utilisation only. That is, if you claim ₹5 lakh out of ₹10 lakh (SI), then the SI is reinstated up to ₹5 lakh and your total health cover is ₹10 lakh post the claim. Policies that offer this feature include Max Bupa’s Go Active, HDFC Ergo’s Optima Secure plan, Arogya Supreme plan from SBI General and Lifeline plan from Royal Sundaram General Insurance.

Take note

While with the restoration feature, you and your family will never run out of health coverage during any policy year, policyholders should be aware of three key points.

One, typically, the restore benefit is available only once during a policy year where 100 per cent up to base SI is reinstated after complete or partial exhaustion of base SI. If there are multiple claims during the policy year, then the restore benefit may not help. However, there are a few policies in the market that offer unlimited restoration benefit during the policy period if you exhaust your health cover completely or partially. Care Plus plan from Care Health Insurance, Max Bupa’s ReAssure plan and Manipal Cigna’s Pro Health Insurance plan are a few examples.

Second and one of the most important points to remember is that, an insurer reinstates the SI and the same will be available only for subsequent claims. That is, if you make a claim for ₹5 lakh for heart-related ailments (SI is ₹10 lakh), the insurer will restore ₹5 lakh that you have claimed but it can be utilised only on your next claim and not for your current claim. So, even if you exhaust ₹10 lakh and the total claim amount works to ₹12 lakh, the balance ₹2 lakh has to come from your pocket. This is because the ‘restored’ SI will be available from next claim onwards.

Also, most policies do not offer the ‘reinstated’ SI for the same illness for which you had made the claim in a policy year. Say, you have claimed for one specific heart-related illness, then the ‘restored’ or ‘reinstated’ SI may not be used for the same ailment by the policyholder. However, there are a few policies in the market such as ReAssure (Max Bupa) and Care Plus (Care Health Insurance) that do cover for the same illness subsequently.

And lastly, the restored or reinstated SI if unutilised during the policy year, expires. That is, it cannot be carried forward for next year. It will also not be considered for no claim bonus (a reward that policyholders receive from the insurer for staying healthy and not making any claim on the policy in a year) calculation.

In case you have an older health policy which doesn’t have a restore or refill feature, then you can consider migrating, though ‘restore’ benefit shouldn’t be your only criteria for policy selection. If the policyholder feels he/she is missing out on the new features such as restoration, then one can consider migrating or porting to a new policy. Indraneel Chatterjee, Co-Founder, RenewBuy says “The decision for migrating or porting should be based on three key factor – premium comparison, room-rent capping and co-payment clause. Only if these factors are favourable, one can check other features such as restore or refill”.

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3 add-on health insurance covers to consider

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A health insurance policy plays a significant role in providing financial stability for an individual and his/her family at the time of medical emergencies. Typically, a health policy offers to cover hospitalisation expenses along with pre- and post-hospitalisation expenses, day care treatments (treatment procedures that require hospitalisation for less than 24-hours), and accidental injuries, among others. While it is important to have sufficient coverage amount at all times, sometimes a base policy may still not be enough to cover other expenses. You can then consider going for one or two riders/optional covers, depending on the need. Keep in mind that these add-ons involve payment of additional premium. Here are a few riders worth considering.

Hospital cash benefit

While a health policy takes care of hospitalisation expenses, you may still end up paying for certain charges while are still hospitalised. These expenses are usually inadmissible at the time of filing a claim, and include the cost of hospital gowns, gauzes, adhesive bandages and maintenance and housekeeping charges and conveyance charges. This is where the hospital cash or daily cash benefit comes in handy. It means, if the policyholder gets hospitalised, your health insurer will pay you a lump sum amount for every day of hospitalisation up to a certain number of days up to a maximum limit (varies with insurers). For instance, in ICICI Lombard’s Complete Health Insurance plan, the hospital daily cash made available is ₹3,000 per day for up to a maximum of 10 days of consecutive hospitalisation (minimum 3 days) for sum insured (SI) of ₹15 lakh and above. The daily cash limit is ₹2,000 per day if the SI is less than ₹7 lakh.

Most insurers including Tata AIG, ICICI Lombard, HDFC Ergo Health, Max Bupa, Bajaj Allianz, Star Health and Digit, offer hospital cash benefit as an optional cover for additional premium, while some insurers offer this as an in-built cover.

Tata AIG’s Medicare, for instance pays 0.25 per cent of SI up to a maximum of ₹2,000 per day of hospitalisation for shared room accommodation.

Critical illness

A critical illness (CI) cover is offered as a rider or as an optional cover by many health insurers. Under this, the insurer will make a lumpsum payment at the time of diagnosis, after which this cover terminates. Remember that, there is no restriction on the usage of the amount received. Primary breadwinners of their families, who don’t want to take chances on their health can consider this rider. Do note that the insurer will make payment only for certain diseases mentioned in the policy document and the payment varies across insurers and diseases. For instance, HDFC Ergo’s Optima Secure plan offers critical illness cover with SI of ₹10 lakh to ₹2 crore CI. Similarly, 100 per cent of the SI opted is paid out in case of Manipal Cigna’s ProHealth plan. Both policies also offer expert opinion if the insured requires it for the CI.

OPD benefit

Another rider cover to consider is OPD (outpatient department) where it covers expenses such as doctor’s consultation fees, pharmacy bills, dental treatment expenses and non-allopathic treatment. Most of the health policies offer OPD in-built in the policy but there are a few that offer this as an optional or add-on cover. Policies including ICICI Lombard’s Complete Health Insurance plan and Max Bupa’s Go Active offer in-built OPD cover while policies such as Activ Health from Aditya Birla Health and Care’s Care Freedom offer it as optional cover. Ideally those who go to the pharmacy or consult doctors often can go for an OPD cover.

But, if your plan already has OPD in-built there are other optional covers to consider. One is a maternity cover, offered by many insurers, which can be considered if a couple plans to have a baby.

Alternatively, reduction in waiting period cover can be opted. This comes in handy for those who are already suffering from pre-existing conditions such as asthma or diabetics. Generally, the pre-existing disease waiting period ranges from 2-4 years across insurers. With this rider cover, upon payment of additional premium, your waiting period of say, four years, will come down to say 1-2 years. You can also use the cover to reduce the maternity waiting period (usually 4 years), if the insurer offers it.

Hospital cash can pay for inadmissible medical expenses

Critical illness cover offers lumpsum payment

OPD benefit is useful to pay for doctor’s consultation fees, non-allopathic treatment

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How you can insure yourself from Covid

Personal Finance

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With the second wave of Covid raging across the country, many are looking to buy a health cover or enhance the same. According to data from Policybazaar.com, 90 per cent of their customers who have an existing health cover of about ₹5 lakh are porting to a higher sum insured of ₹10-15 lakh. While you must make it a point to follow all Covid protocols to avoid getting infected, here’s how you can financially shield yourself against Covid if you unfortunately fall sick.

 

Date extended for Covid-plans

In addition to taking toll on your health, Covid-19 infection can dent your savings as well.

Keeping this in mind, the insurance regulator, IRDAI has recently extended the validity for sale and renewal of short-term Covid specific health insurance policies – Corona Kavach and Corona Rakshak – till September 30, 2021. This was previously available up to March 31, 2021.

The insurance regulator in July 2020 had mandated that all general and standalone health insurers offer Corona Kavach health policy.

This (Corona Kavach) is an indemnity policy which pays for the hospitalisation of the insured affected due to Covid-19, provided he/she is hospitalised for a minimum period of 24 hours. It also offers cashless facility to its policyholders, provided hospitalisation is from the insurer’s list of network hospitals.

Hospitalisation cover includes expenses such as room rent, boarding, nursing, ICU, ambulance service up to ₹2,000, medical practitioner and consultant fees, operation theatres, PPE kit, gloves, etc.

It covers for home care treatment expenses as well, up to the sum insured (SI) for a maximum period of 14 days. All general and standalone health insurers offer this policy.

There are complaints that some hospitals are not granting cashless facility for treatment of Covid-19 despite policyholders being entitled for the same. The insurance regulator has recently clarified that wherever insurers have an arrangement with the hospitals for providing cashless facility, such hospitals are obligated to provide cashless service for all treatments including treatment for Covid-19. In the event of denial, policyholders can file a complaint with the insurer concerned.

Another plan introduced by IRDAI, but not mandatory to be offered by all insurers, is Corona Rakshak. It is a benefit policy, where the insurer will pay 100 per cent SI upon positive diagnosis and the policy shall terminate thereafter.

As both are standard policies, the coverages and exclusions across insurers will be the same, including the policy name. Both policies can be availed for a period of 105 days (3.5 months), 195 days (6.5 months) and 285 days (9.5 months) and can be renewed to ensure the benefit of the policy continues.

The minimum SI under both policies is ₹50,000; the maximum SI offered under Corona Kavach is ₹5 lakh and for Corona Rakshak ₹2.5 lakh. The minimum and maximum age of entry is 18 and 65 years respectively, and only single premium payment mode is allowed under both policies.

Regular health policies cover hospitalisation due to Corona virus among other diseases/accidents. At the beginning of the outbreak of the pandemic, there were problems over providing cover for associated costs such as personal protection equipment (PPE) kits.

These expenses formed part of consumables which were not usually covered by most insurers. Those who did cover, applied ‘proportionate deduction’ clause based on the type of hospital room availed.

In June last year, to reduce the burden of the policyholders and to standardise the claim settlement, IRDAI, ordered that medical expenses including cost of pharmacy, consumables, implants, medical devices and diagnostics to be covered as part of health policies without being subject to the ‘proportionate deduction’ clause. Covid-related expenses in the above-mentioned heads such as PPE kits will reap the benefit of this move.

Further, if you have a health policy which covers for out-patient (OPD) medical expenses – known as comprehensive cover – you can reimburse your Covid-19 related home treatment medical expenses too, if you are under home quarantine.

Making the choice

Your financial burden is likely to be reduced whether you have Covid-19 specific health covers or a comprehensive health cover. However, if you plan to sign up for one now, do note that all new health insurance policies come with a waiting period of 15 days, only after which your cover will kick in.

Covid specific plans as well as regular health cover have certain exclusions. Any unproven treatment will not be covered.

Coverage under both policies cease if the insured travels (outside the country) to a destination where India restricts travel to or the foreign country restricts entry of travellers from India.

So, if you are looking to buy a plan to protect against Covid, you can skip Corona Kavach if you have a regular health plan covering OPD expenses. Corona Rakshak can be useful if your regular plan does not cover OPD or if you are looking for additional cover. Since Rakshak is a benefit policy, this can come in handy to cover expenses for tests, scans, medicines, etc. for those who are home quarantined.

(This is a free article from the BusinessLine premium Portfolio segment. For more such content, please subscribe to The Hindu BusinessLine online.)

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Product Review: Aditya Birla Activ Health policy is value for money

Personal Finance

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Aditya Birla Health recently introduced Activ Health policy, an enhanced version of its existing policy with the same name. While the coverage in the policy almost similar to its older version, there are a few new features.

New features

The newly launched Activ Health (an improved version of the same policy) is a comprehensive indemnity health plan offering sum insured (SI) of ₹2 lakh to ₹2 crore. While the same SI range was offered in the earlier version as well, there are a few notable new features.

In this new Activ Health, room rent for all kinds of hospital rooms is covered up to the SI, similar to other indemnity health plans in the market. But in the previous version, co-pay was applicable. Another key feature that is unique to this new product is that the premium is waived, at the renewal, if the policyholder is diagnosed with a critical illness (once).

Also, in its earlier version of Activ Health, the policy offered about 30 per cent discount on premium for staying fit. Now, in the new version, 100 per cent premium can be adjusted with the health returns. But you as a policyholder should earn points (health returns) through accumulation of Active dayz. For instance, one Active dayz can be earned by 10,000 steps or more in a day or burning 300 calories or more in a day. So if you earn, say, 325 Active Dayz in a year by walking, then the entire health returns can be adjusted with premium payment. It also covers inpatient treatment under AYUSH that allows you to opt for Ayurveda, Unani, Siddha, and Homeopathy treatments which was not available in the previous version.

Both the old and the new policy covers for a few chronic diseases including hypertension, blood pressure and diabetes from day one. Under its chronic management programme which forms a part of the plan – where an individual has undergone a pre-policy medical examination and is found to be suffering from covered chronic conditions, then day one coverage is offered. In the earlier policy, however the hospitalisation came with a waiting period of 90 days. But in the enhanced version hospitalisation expenses for such diseases will be covered without any waiting period (90 days).

Other features of Activ Health plan include coverage for in-patient hospitalisation, OPD, recovery benefit (where the insurer pays fixed benefit for 10 consecutive days of hospitalisation due to accident), day care treatment (covered up to SI) and sum insured reload benefit and cumulative bonus benefits. The plan also provides coverage for Covid-19 and personal protective equipment (PPE) kit, gloves and oxygen masks. There is no co-pay for zone wise premium (policyholder pays premium as per the treatment cost prevailing in the city he/she resides) too for SI over and above ₹4 lakh.

Points to note

Activ Health’s reload feature offers to reinstate your SI even if it is partially or fully exhausted. But it is available only once during the policy year up to SI. But on the other hand, if you go for Activ Health’s Premiere variant, then this feature is available for multiple claims. Also, the pre and post hospitalisation expenses are covered for 60 days and 180 days respectively for this new plan unlike Aditya Birla Health insurer’s other product like Assure Diamond where it is 30 and 60 days respectively.

Also, another point to note is that, if an individual has taken a policy without medical examination (pre-policy medical check-up), but later finds that he/she has one of the chronic conditions, then the waiting period of 24 months applies. One should be aware that the pre-existing disease waiting period is between 36 and 48 months. But there are policies in the market with shorter waiting period including Digit Health Insurance’s Health Care Plus and ICICI Lombard’s iHealth Plus.

Keep in mind, that, policyholders have to undergo initial waiting period of 30 days.

Premium comparison

The new Activ Health is better compared to its previous version as also the insurer’s other plans like Assure Diamond. However, there are other products too in the market with more or less similar features. Max Bupa’s ReAssure plan is one such. For a 30-year individual, for a SI of ₹ 10 lakh, the premium works out to be ₹7690 (excluding tax) per year, while in Max Bupa’s ReAssure plan, the premium works out to be ₹7755 (excluding GST) per year.

Those in the previous version of Activ Health can be upgraded to the new version at the time of renewal. The premium too works out to be lower in the new version. Sample this, for a 30-yr individual, for ₹10 lakh SI, the premium works out to ₹7690 (excluding GST) but the premium for the same policy in its previous version is around ₹8307 (excluding GST).

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Covid-related health cover claims up 50%

Banking & Finance

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Covid-related health insurance claims have again risen steeply over last one month, according to general and health insurers.

The total registered claims now stand at about ₹14,287 crore as per data compiled by the General Insurance Council for the industry. Out of this, claims worth ₹7,561 crore have so far been settled by the general and standalone health insurers.

This is much higher than the earlier estimate which pegged the Covid claims for the present financial year at about ₹10,000- crore to ₹12,500 crore.

Though the increase in the number of claims differ from company to company, on an average, the industry is witnessing about 50 per cent surge in claims, say industry sources.

“There has been a substantial increase in the number of Covid-related health claims,’’ Rakesh Jain, ED & CEO, Reliance General Insurance, told BusinessLine.

Rising cases

“The claims reported at RGI rose to 36.2 per cent (proportionate) in March compared to February and January and we also noticed a steep increase in the number of cases in February and March,’’ Jain said. In comparison with the number of claims in the January-February period, there has been an almost 50 per cent increase in Covid-related health insurance claims being reported, said Bhaskar Nerurkar, Head – Health Claims, Bajaj Allianz General Insurance.

The increase in claims is obviously driven by spurt in the number of fresh cases, say insurers.

“On an average the number of Covid cases per day increased from 15,620 to 29,377 in March 2021,’’ said Jain.

The spatial distribution of claims also point to emerging clusters of Covid cases.

“If one looks at the origin of claims, they come from relatively new locations/cities such as Nagpur, Indore, Vadodara and Amaravati,’’ Nerurkar said.

Claim settlement

Given the magnitude of claims, insurers have also put in place special measures for speedy settlement. For instance, RGI launched ‘Self I’ app immediately after the pandemic for ease of claim intimations for the customer.

Bajaj Allianz General Insurance has an in-house claim settlement team dedicated for Covid-19 claims. “We earmarked a few resources to settle Covid-19 claims on priority. This helped us settle Covid-19 claims faster,’’ said Nerurkar.

According to chief of underwriting of a major general insurer, a few cases of fraudulent claims were also reported. “There has been a significant increase in the number of home-care treatment for Covid,’’ he said.

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Who needs an insurance cover against vector-borne disease

Personal Finance

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Recently, the insurance regulator, IRDAI, came out with a standalone standardised health cover for vector-borne diseases – Mashak Rakshak. Insurers are being encouraged to introduce this product from April 1, 2021.

Vector-borne diseases are transmitted through carriers such as mosquitoes, fleas and bugs. Malaria, dengue and chikungunya are some common vector-borne diseases. According to the World Health Organisation, over seven lakh people die every year globally on account of such diseases. So, this cover can address specific disease-related needs of people, particularly during the monsoon season when the infections rate is high.

While there are already a few players in the market offering a standalone vector-borne diseases cover, IRDAI’s standardised product can make policy selection easier for people. But should you go for the standardised plan, given that vector-borne diseases are also covered by regular health insurance policies? Here is a look at product features and its suitability.

About Mashak Rakshak

IRDAI’s standardised policy, Mashak Rakshak, like the other standalone products in the markets is a fixed benefit policy. That is, 100 per cent sum insured (SI) will be paid to the policyholder on positive diagnosis of any one of the vector-borne diseases. The policy provides coverage against seven vector-borne diseases – dengue, malaria, filaria, kala-azar, chickungunya, Japanese encephalitis and zika virus. If an individual is diagnosed with any one of these infectious diseases, as confirmed by a doctor, then the complete sum insured will be payable, provided, the individual is hospitalised for a minimum continuous period of 72 hours. Upon the payment of SI, the policy terminates.

Also, if a policyholder is diagnosed with filaria (commonly known as elephantiasis), the benefit is payable only once in a lifetime. Even if you renew the policy, you will not be covered for the same disease. Whereas, in the case of other vector-borne diseases, the policyholder will be covered after the renewal as well. In other words, you can get the benefit under this policy more than once in a lifetime.

Further, the policy will pay two per cent of the SI on positive diagnosis through laboratory examination and confirmation by a doctor on first diagnosis during the cover period. Do note that, this diagnosis cover is applicable only once a year for each disease.

Mashak Rakshak provides an individual as well as a family floater option. Family includes self, spouse, dependent children and dependent parents. The minimum SI is ₹10,000 and goes up to₹2 lakh. The policy provides coverage only within India while existing policies like Bajaj Allianz’s M-Care provides coverage both within and outside India. Mashak Rakshak is an annual policy with lifetime renewability. The minimum entry age is 18 years and maximum is 65 years.

The minimum waiting period in case of Mashak Rakshak is 15 days. However, if you benefit from the standard cover and renew it, a cooling off period of 30 days will be applicable from the date of previous admission of claim. The plan offers the option to port also.

Other standalone products

There are a few insurers who offer a standalone vector-borne disease cover in the market currently. These includes Bajaj Allianz General Insurance (M-Care plan), HDFC Ergo Health’s Dengue Care (also offers Mosquito Disease Protection plan but it is offered as group policy) and Future Generali’s Future Vector Care. These are benefit policies and the coverages is more or less similar to that under Mashak Rakshak. However, there are differences in SI offered and the premium. For instance, Bajaj Allianz’s M-Care provides five SI options — ₹10,000, ₹15,000, ₹25,000, ₹50,000 and ₹75,000. The premium ranges between ₹160 and ₹1,200 for an individual policy.

Similarly, the waiting period also differs. While the initial waiting period remains the same (15 days) as Mashak Rakshak, in case of recurring occurrence of the disease, the waiting period could change. For instance, in Future Generali’s Future Vector Care, an individual is subject to 60 days’ waiting period in case the insured person is suffering from any one vector borne disease at the time of taking the policy or within 60 days prior to applying for the policy. Similarly, in case of M-Care, a waiting period of 60 days is applicable for that particular ailment and 15 days for other diseases, if the policyholder opts for the policy after the occurrence of and cure from, one of the seven vector borne diseases.

Our take

A vector-borne disease policy is most suitable for those living in proximity to canals or where there is stagnant water ( breeding ground for mosquitoes and fleas). However, your regular health policy will also provide cover for vector-borne infections — OPD (treatment in the outpatient department, if included in the policy) as well as hospitalisation. So, having a comprehensive health plan is always better.

While standalone vector covers including M-Care, Dengue Care and Future Vector Care can be taken by anyone, even those with pre-existing disease conditions, IRDAI’s standardised cover is silent on this. According to Amit Chhabra, Head-Health Insurance, the regulator has not specified on the policy issuance to those with pre-existing conditions and it depends on the underwriting guidelines of the insurers.

But having a standalone vector-borne disease cover can be advantageous too. When you are hospitalised for one of the seven vector borne diseases, you will get the benefit from the policy and can also claim hospital expenses (if any) under your regular health policy.

A standalone vector-borne disease cover is not a must-have. But if you don’t have a regular health insurance plan and are at risk of catching a vector-borne disease, you can consider buying a policy.

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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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Is mental illness cover worth the money?

Personal Finance

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Given the increasing psychological stress since beginning of the pandemic, and treatment for mental ailments being expensive and long-term in nature, it is necessary that each of you have a plan to handle expenses related to mental illnesses.

While all health insurance companies were mandatorily required to cover mental ailments from 1 October 2020, the experience of those suffering from mental conditions and having an insurance cover, is different. Recently, a reader wrote to us saying that public sector health insurers still have mental illnesses under exclusion list and are not offering coverage.

When we checked, we found he was right. Websites of insurers – United India Insurance Company and the New India Assurance Company, had psychiatric and psychosomatic disorders in the exclusion list.

The IRDAI’s mandate to treat mental illnesses at par with physical ailments and remove it from exclusions, has not been implemented by all insurers.

If you are concerned about mental ailments (including depression, bipolar disorder, schizophrenia, anxiety disorders, psychotic disorder and others) and related expenses, do your homework before you sign up for a health insurance policy – go through the policy document and ensure that it covers hospitalisation due to psychological disorders and mental illnesses.

One thing to note is that treatment for mental ailments in most cases is offered as OPD (Out-Patient Department) consultation. Given that most health insurance plans do not cover OPD expenses, and require minimum 24 hours hospitalisation, claims on consultation in OPD, gets rejected.

Cover for mental ailments

To see if at least the private insurers have incorporated coverage for mental ailments in their health policies, we checked a few big players. The policy document for HDFC ERGO’s my:health Suraksha specifically mentions coverage for hospitalisation expenses (it is silent on cover for OPD consultations) to treat mental ailments.

In ICICI Lombard’s Complete Health Insurance plan, mental illness in not in the exclusion list; the policy covers OPD expenses, for additional premium. In Star Health’s Medi Classic Insurance Policy, if the insured person is diagnosed with psychiatric or psychosomatic disorder for the first time and hospitalized for a minimum period of five consecutive days, then the company will pay hospitalization expenses up to the sum insured.

In Manipal Cigna Health Insurance’s ProHealth plan, there is cover for expenses on mental ailments; the policy brochure, though, does not delve into details.

If you are looking for insurance policies that give OPD covers, so that you can claim for OPD treatments and consultation for mental illness, then ICICI Lombard’s Complete Health Insurance plan and Max Bupa’s GoActive plan/Health Premia plan can be considered.

While GoActive covers OPD consultations (with cap on number of consultations), HealthPremia covers OPD treatment (with cap on claim at ₹50,000). Digit’s health insurance plans provides cover for mental illnesses. If the OPD add-on is opted for, then consultations and therapies under OPD are covered too. However, note that this cover comes with co-pay (for first two years) requirement and the maximum benefit one can avail is ₹ 5,000.

Are OPD covers worth it?

OPD covers, when offered either as in-built in the policy or sold as separate riders, are expensive as insurers are certain that the person who buys the cover is going to make claims on it, and there are limited means to cross-check the medical bills they would provide.

So, for the amount of sum insured (SI) they offer, the premium would almost be 70-75%; with section 80D benefit under the Income Tax Act, the asking price will be 50% of the benefit given.

With OPD covers, you also need to note that many a times, the claim will be settled by reimbursement and cashless benefit will not be given. You would also have to note that OPD policies mostly do not cover cosmetic treatments and expenses on vitamins and tonics unless forming part of treatment for injury or disease and expenses on inoculation or vaccination (except for post–bite treatment and for medical treatment for therapeutic reasons).

Keep some free cash with you always for medical emergencies. Even if you have health insurance with OPD cover for mental ailments, the sum insured under the OPD cover may not suffice.

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New Year resolutions for your finances

Personal Finance

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A surreal year has passed and a new one has arrived. 2020 was tough for most folks, but tough times teach valuable lessons. Use these to good effect in 2021 to get a better handle on your financial life. Here are some key money resolutions that you must make and not break in the New Year.

Get insured

Covid-19 brought home to many the importance of both health insurance and life insurance. Hospitalisation burnt a big hole in many a pocket. Also, many unfortunately passed away – leaving the near and dear ones in the financial lurch.

The wise don’t harbour illusions of immortality or invincibility. So, if you haven’t done it already, insurance should be top on your list. Get sufficient life and health insurance. If your family depends on you, your absence could leave it in deep financial trouble. Also, illness can strike anyone, anytime and medical cost can be quite high .

Get your life covered for at least 10 times your annual income. If you have loans outstanding, especially home loans, make sure the sum assured is large enough to cover these liabilities, too. Buy life cover through online, term insurance plans that offer significant cover at relatively low premiums. For an average family of four, buy health cover of at least ₹5 lakh with a family floater policy to start with, and increase the cover through cheaper top-ups and super top-ups.

Have contingency funds

Covid-19 saw many taking pay-cuts and many also losing their jobs. It was a tough situation, but one which highlighted the significance of contingency funds or emergency reserves. Emergencies — job loss, calamities, sudden major expense, etc — can strike without warning and drain your finances. To prepare for such days, build up a contingency fund that’s about 12 months’ expenses including loan repayments. Keep this money secure in safe bank FDs or in post office deposits that you can easily access. Use the money only when there is an emergency.

Spend wisely, save well

The lockdowns and work-from-home saw many cut down on their non-essential lifestyle spends such as compulsive eating out, wardrobe changes and other retail bingeing. This helped some manage pay cuts, while others could save more and invest more. The lesson is crucial – it’s not just how much you earn but also how much you spend and save that determines your finances.

So, spend smartly and within limits. Budget your monthly expenses and keep track so that they don’t spin out of control. Various online money management tools can help you with this. Refrain from borrowing to spend on stuff that you don’t really need. Cut down on non-essential expenses. Keeping a tab on your spending can help you invest more.

Stay invested, keep investing

Those who panicked and sold stocks in the market crash of March might have regretted it by December when the bourses hit new highs. So would those waiting out the rally for an attractive entry point. Staying invested and continuing to invest regularly would have helped investors navigate the volatility well.

For most folks, it is better and safer to invest through equity mutual funds than in stocks directly. Invest with a long-term perspective of at least five to seven years. Deploy money through the SIP (systematic investment plan) route rather than lump-sum. SIPs inculcate a disciplined, regular investing habit.

Importantly, don’t stop the SIP when the market is going through a rough patch. A weak market, in fact, works to the advantage of the long-term investor; you get more units of the mutual fund in a falling market. Keep increasing your SIP investments as and when you can. This will help you build a sizeable corpus for future goals, including retirement.

Also, don’t let your savings idle away in your savings bank account for just 3- 4 per cent annual return. Use the ‘sweep’ facility to transfer the idle money (over a minimum threshold) to fixed deposit accounts that offer better rates.

Diversify across assets

Don’t put all your eggs in one basket. Have investments across asset classes such as equity, debt and gold. Some assets do well in some years when others may not – this reduces the portfolio risk and optimises returns. For instance, gold outperformed in 2020, thanks to its safe haven reputation.

Decide on your asset allocation — your mix of investments across asset classes — based on your age, risk profile and circumstances. Don’t get greedy when an asset class rallies sharply. Rebalance the portfolio — buy and sell asset classes — as needed, to suit your desired asset allocation.

Nominate, make a Will

In the event of your passing away, your family must be able to access your assets without having to run from pillar to post. Keep your family informed about all your assets, liabilities, investments and insurance policies. Have nominations for your investments. Make a Will laying out how assets will be divided among family members; this key piece will help keep the peace.

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