Personal Health Insurance

No, premium increases in personal health policies are not linked to claims. That said, premiums can be increased :

• with respect to age for e.g., if you turn 46 before your policy renewal date and the policy mentions it has a different premium above the age of 45, you will need to pay extra, irrespective of whether you have made a claim in the current policy or not.
• when IRDA permits; Insurers need to get an approval from IRDA before they can effect any changes in the policy terms. If your Insurer thinks that the product portfolio is not performing upto their expectations, they might apply to IRDA, who in turn would assess the situation and take a call on the increase.
• health inflation; this also needs to be approved by IRDA.
• if explicitly mentioned in your policy; your policy could have different premiums for different age groups, if you cross into a different age group at renewal, the Insurer will increase your premium.
• addition of covers; if you decide to opt for an add-on on at renewal, it will cost you more.

Health Insurance is an instrument designed to protect you from the monetary shock of your hospitalization needs.
Here's a broad list of covers that your health insurance policy will generally cover

• Inpatient treatment that requires an active line of treatment and at least a twenty four hour hospital stay, which will include everything except for consumables and other inflationary charges that your Insurer thinks aren't Reasonable or Customary.
• Day care procedures like cataract, dialysis and the like, that no longer require you to stay in the hospital.
• Pre hospitalization charges that include reimbursement for tests that lead to the hospitalization and post hospitalization charges that are incurred on tests/ follow up consultations/ medication. Pre hospitalization expenses are generally covered from about thirty days prior to hospitalization while post hospitalization charges are covered till about sixty days post hospitalization.
• Post-hospitalization physiotherapy/ counseling charges if advised (in written) by the treating doctor.

While there's a whole gamut of things that your health insurance covers, there's some things that your policy will not cover.

• Consumables
• Outpatient Expenses
• Hospitalization for investigative purposes
• Treatment Taken Voluntarily like cosmetics, weight loss etc.,
• Anything else exclusively excluded in your policy.

However some of the exclusions/ add-ons can be covered by paying an additional premium. This might vary from Insurer to Insurer.

Not covered.

A family floater policy is an umbrella cover for the entire family i.e. if you have opted for a family floater cover of ₹ 5 Lac, this cover is available for all the members in the family who have been covered under the policy. This coverage is different from the coverage under an Individual Health policy, wherein, each member of the family will be covered for a sum of ₹ 5 Lac individually.
Isn’t that wonderful? Well, it would be if not for the cost implications and the fact that you can opt for a family floater cover and stay appropriately insured at the same time. Moreover, both of the products are aimed at serving different policy holders.

Lets examine when to opt for a family floater cover as opposed to an individual one.
Somewhere around the age of 45, human metabolism starts to slow down, and this in turn leads to deposit of unwanted fats in the body, which in turn makes human organs work harder to keep replenishing their energy needs.
While not every disease could be attributed to a slowing metabolism, majority of them can be.

What does any of this have to do with a Family Floater policy?
Well, quite a lot actually. Lets try and understand how. Lets look at a couple of scenarios

Scenario I - If you are a young family of four, that includes your spouse and young kids, with maximum age in the family capped at around 45, your risk profile is low. The probability of your young children needing a hospitalization cover are on the lower side, thanks to all of your metabolisms. A floater cover of ₹ 5 Lac should therefore take care of your emergency hospitalization needs.

Scenario II - Now, if you are a young couple, around 35 years of age, who also want to insure one set of your aging parents, the same floater cover of ₹ 5 Lac might be a risky proposition. This is primarily because of the added risk of elder parents. The chances that elders in your family use up the entire cover by mid term of the policy cannot be denied. You do not want to run into a scenario where your minor claim of ₹ 50,000 is rejected because of exhaustion of Sum Insured and you end up bearing it out of your pocket.
The solution to this problem is to always insure elder folks under a separate policy. These days we have policies that have been tailor made to cater to the elderly.

Here’s a list of some of the benefits of the policies offered through Banks

• Low premium - Health policies offered via banks are offered cheap in anticipation of capturing large footfalls in the mid to long term future - whether that happens or not, depends on the way the product is marketed, sold and managed; but the important point is these are some of the cheapest policies you could find in the market.
• You are the Bank’s Customer and therefore have them by your side. In case you need to escalate issues, escalating these to the right people in the Bank can see faster resolution.
• Discounted capping on waiting periods - a lot of these policies discount the waiting periods for pre-existing disease, other diseases by a year or two.
• Since these are issued as group policies, many of them do not require you to take up any medical checks. While it is advisable to get a medical check done before you buy a policy nonetheless, not having one as a check mechanism reduces your chances of being rejected.
• The Bank shares the responsibility for product closure - if a product is being closed, the Bank will see to it that a replacement product is made available to its Customers because after all you are the Bank’s Customer.

Here’s some of the disadvantages

• Adverse selection - since the group under a banks group insurance is all of the account holders of the bank, you might end up at risk with a group of people who might not have a healthy risk profile. This could be disadvantageous for you in the long run, from a premium perspective, because the premium for the policy will be revised based on the group as a whole.
• A lot of the times the bank personnel at ground zero who are in charge of the underwriting do not have any technical or for that matter administrative knowledge about the policy. More often than not they are just about aware of the price.
• Depending on the nature of operations of your bank, you might have to depend on the bank for premium payments. This could be a hassle if the bank does not have an evolved technology infrastructure and you need to visit the bank branch physically for premium payment.
• A lot of the times such policies are centralized at particular Insurers offices. For eg. Bank of Maharashtra’s policy with United India used to be centralized at United Pune office. This could create problems for people needing operational support from, say a Delhi or Chennai. Taking into the footsteps of the Insurer, the TPA also had centralized its office at Pune - this could mean a logistics nightmare for an Insured who has preferred a claim from Chennai.
• Your renewal is your own responsibility. Renewal notices are a business courtesy and therefore not anyone (but your own) responsibility. You are the one who has to keep track as also ensure the payment is credited to the insurer.

Yes. Purchasing health insurance not only saves medical expenses but also provides tax benefits.
Under section 80D of the Income Tax Act, you can claim tax exemption for the total health insurance premium paid by you during the assessment year. This benefit is over and above the one that you claim under section 80C and depending on the age of the members in the policy, the tax exemption amount can range from ₹ 25,000 to ₹ 1,00,000.

Limits of exemption

Health check-up benefit
Section 80D benefit also includes expenses incurred for preventive health check-ups; this benefit can be availed up to a maximum amount of ₹ 5,000 per year.
Here’s a couple of scenarios
Scenario I - Say you’ve bought health insurance for yourself, your spouse and children, and also for your parents who are above 60 years of age. You paid a premium of ₹ 30,000 for your family and ₹ 35,000 for your parents. In this case, the maximum tax exemption that you can claim for yourself is ₹ 25,000, while for your parents, the entire amount of ₹ 35,000 will be exempted.
Scenario 2 - Now, let's suppose you paid an annual premium of ₹ 23,000 for a health policy that covers you and your spouse. You also got a health check-up done for the both of you for ₹ 3,000. In this case, although the maximum amount that can be exempted under health check-ups is ₹ 5000, since your total expense exceeds your exemption limit, you will be able to claim only ₹ 25,000 as tax deduction under section 80D.
Few important points to remember

• The benefit under 80D can be claimed by individuals alone and not by employers.
• Premium paid in cash is not considered for tax deduction, except in the case of preventive health check-ups.
• Premium paid on behalf of independent children, siblings or any other extended family will not be considered for tax deduction.
• Medical expenses incurred by senior citizens above the age of 80 are also exempted under 80D subject to the prescribed limit of ₹ 50,000.

Not less than ₹ 50 Lacs!
If there is one thing the Covid-19 pandemic has taught us, it is the fact that Sum Insured, sometimes even to the tune of ₹ 20 Lacs, got exhausted in a matter of days in case of hospitalization. Moreover the higher you go in the Sum Insured ladder, the lesser it will cost you per Lac.
Here’s what you need to keep in mind while choosing your sum-insured.

• The rate of increase in the Healthcare cost, every year. This rate has traditionally been higher than the rate of inflation.
• Occurrence of new diseases like Covid-19, Dengue, Swine flu, Ebola, Chikungunya has multiplied manifold over the last few years. The cost of treatment of Cancer, which has become increasingly common, has been growing exponentially too.
• The new technological advancements in healthcare such as Stem-cell, Robotics are very effective but unfortunately come at a very high cost.

Hence the ideal Sum Insured in the given scenario is ₹ 50 Lacs.
However we do understand budget constraints, especially in the current economic scenario, and therefore advise you to explore the option of a Super Top-up policy.
Super Top-up policies are policies where the Insurer is not bothered about how you pay for a claim that is below a threshold. The Super Top-up policy is triggered only when your claim amount crosses the Threshold.
Super top-up policies can therefore be used to cover expensive claims and at a fraction of the premium that you would have paid for an individual health policy.
Smaller claims (i.e. claims below the Threshold) can be insured out of pocket or from your employer’s group policy.

A deductible on a health policy is the amount that is borne by the insured. The insurance company becomes liable to pay any claim for such a policy only after the deductible amount has been paid by the insured. The way the insured covers her deductible is irrelevant - she could cover the expense on the deductible from her pocket or via a separate policy.
In other words, deductible is the amount beyond which the health insurer will pay claims. If the claimed amount is lesser than the predetermined deductible limit, the insurer will not be liable to pay anything. Choosing the deductible intelligently, therefore, can save you money.
Lets look at an example to understand this better

Scenario - You are already covered under a basic health policy, possibly by your employer, and you wish to go for a higher cover. In this case, you may buy an additional policy with a deductible that is equal to the sum insured on your base policy.
Let’s understand the benefit of such an arrangement with an example.

Suppose you have two policies:
Policy 1 : A normal health policy with a sum insured of ₹3,00,000.
Policy 2 : A super top-up policy with a sum insured of ₹ 10,00,000 and a deductible (threshold) of ₹ 3,00,000.
If your claim amount is ₹ 9,00,000, then Policy 1 will pay ₹ 3,00,000. Since the sum insured of Policy 1 is now exhausted, policy 2 will kick in. The deductible of ₹ 3,00,000 will not be payable under Policy 2. Policy 2 will pay the remaining claim amount of ₹ 6,00,000 (₹ 9,00,000 - ₹3,00,000). The balance sum insured on policy 2 can be utilized for any future claims.

Whenever the claim amounts are smaller, you should compare them to the total discount you can avail at renewal via the no claims bonus (NCB) feature. Say, you are towards the fag end of your policy renewal and need to make a claim of ₹ 2000, but the NCB at renewal is ₹ 3000, you should then pay the claim out of pocket and save yourself the ₹ 1000 (NCB renewal discount - claim amount).
Policies with deductibles are cheaper, so you get a higher cover at a lesser cost. If the members to be covered under the policy don’t have a major illness requiring frequent hospitalisations, then going for a policy with a suitable deductible can prove more economical over a period of time. This is also the broad concept behind Super Top-up policies.