Introduction

Purchasing insurance is challenging. A policy paper is even more difficult to read. Furthermore, you won't understand half of those terms, so even if you try to carefully read through this, you'll probably come up blank. We have therefore developed a series of straightforward case studies to clarify the meanings of some of the most frequently used terminology and characteristics in an effort to simplify things and teach you how to understand a policy document. Additionally, we will explain how they affect you and why you might or might not require them.

Let's begin by discussing the most common item on the health insurance checklist: the co-payment.

Co-Payment

You're going to purchase health insurance soon. The agent offers a policy for a steal of ₹7000 per year, with a total coverage of 5 lakhs. He then adds even more sugar to the saucepan. If you accept to a 20% co-payment condition, he will reduce the premium by 25%, or about ₹1800/year. You approve the arrangement because you think it's fantastic. You just saved ₹1800, whoa.

You are involved in an accident nine months later. You're in the hospital and require a lot of attention. Fortunately, you fully recover, and the total cost comes to ₹2 Lakh. No issue. You are insured. The insurer only pays ₹1,60,000, though. You agreed to co-pay 20% of the price, thus they want you to pay the remaining ₹40,000 out of pocket.

You begin to calculate. Because of the co-payment condition, you had to pay ₹40,000 even though you had saved ₹1,800. To compensate for this deadly error, almost 22 years' worth of premium savings would be required. You don't want it in your insurance coverage.

Co-payments rarely make sense unless they are required or you are purchasing it for an elderly person who already has a medical condition. In this situation, a co-payment provision can significantly reduce your health insurance plan's premiums.

Room rent

Imagine being sick and learning that your hotel rent is limited by your insurance. Reluctantly, you pick up the policy document and discover that the cap is 1% of your sum insured. Every day, 1% of the ₹5 lakh insured is ₹5,000. It's not much. And now you're angry that you can't choose the ₹10,000 per day accommodation that you wanted.

However, you're pretty sure you won't be here for very long. This will only last for a few days.

Additionally, you will only need to pay the additional ₹10,000 (2 days*5000) if you choose the superior room. In any case, you decide on the cozy room. But two days after you're released from the hospital, the insurance company surprises you.

You will be required to pay an additional ₹25,000. What?

The majority of services performed in your room, such as surgeon and consultant fees, various diagnostic tests, etc., will not be fully covered, according to their carefully crafted policy statement. Instead, because you chose an overpriced accommodation, they will only pay a portion of it.

How much are they going to pay? Here's the math, then. Recall that the room rent cap was set at ₹5,000. The real amount you paid for your room was ₹10,000. As a result, they will pay half of your room rent and half of the expenses for any services provided in your room. For example, suppose you need surgery and the cost of the surgeon's services comes to ₹50,000. All they will pay is ₹25,000. You are responsible for the remainder.

Steer clear of regulations that cap room rent. That's how easy it is. Choose a room that is well inside the limit if you still wish to follow this guideline.

Disease wise limits

10 lakh coverage for a yearly cost of only ₹6,000. That's what you're being offered. However, you already have a suspicion rather than leaping for delight. No one else is matching the price this guy is offering you. You think for a bit and are skeptical. However, since he is somewhat of a family friend, you proceed with his recommendation anyhow.

Then your worst nightmares come true one day. You are forced into the operating room when a disk slips. You need a lot of care. The total cost is high. ₹4,36,000, which includes all expenses. However, the insurer claims they can only cover ₹2,00,000 even though you have ₹10 lakh covered. You want an explanation because you are furious.

They eventually inform you that there are disease-wise sub-limits on your coverage. In other words, they have a cap on the overall amount of coverage that is required for individual illnesses.

Cardiovascular disorders, for example, only pay ₹2,50,000.

₹2,75,000 for knee replacements

₹2,00,000 for additional major surgeries similar to the one you just had Finally, you understand how the business was able to provide you with a ₹10 Lakh policy at such a low price. In the majority of circumstances, they most likely never pay the entire cover cost.

Avoid falling for this dishonest tactic. Always be aware that there are no sublimits based on sickness. since you have no idea what will strike you. After carefully comparing the top health insurance plans on the market, it is wise to choose one that has no such restrictions.

Waiting Periods

The most frightening aspect of insurance is the uncertainty that comes with purchasing a coverage because the insurer will want to discuss your medical history as soon as the nice chat is over. Are you diabetic? Do you suffer from any heart issues? Do you suffer from any thyroid-related conditions? Or do you already have any health issues? The list goes on and on.

Following that line of inquiry, you may be asked to participate in a series of medical examinations. They will also tell you that they will pay for your hospital stay if it has nothing to do with your pre-existing disease, based on these findings. However, what would happen if you were admitted to the hospital due to a complication from a previous illness? If such is the case, they will ask you to wait for a period of time, perhaps two to four years. Although it makes sense for the insurer to include this condition, you may find it to be an especially taxing task.

As you can see, the issue is simple. Suppose that your blood pressure is an issue for you. After disclosing this condition, you purchase your policy. Regretfully, you suffer a heart attack the very next year, and you are frantically hoping that your insurance will pay out. However, if the insurer can link your blood pressure condition to the heart attack, they may be able to reject your claim. You must thus hope and pray that you don't get sick due to a pre-existing condition if your insurer forces you to wait four years. It's not a good place to be, we assure you.

The majority of insurance policies have waiting periods. Your only option is to choose a policy that requires the least amount of waiting time.

Pre & Post Hospitalization

One day you wake up and begin to feel lightheaded. You speak with your physician. A blood test is prescribed by her. She claims it's nothing unusual. So you bring an ORS pack home. However, your health worsens. The following evening, you experience vertigo once more. Additionally, the doctor recommends an MRI this time. After reviewing the results, she requests that you check yourself into the hospital.

Over the following three days, the doctor treats your problem well, and you are soon released.

The total cost of the hospital bill is ₹10,000.

The total cost of the MRI and pre-hospital diagnostic tests is ₹15,000.

You're expecting both expenses will be covered by your insurance. However, the business claims that pre-hospitalization costs are not covered. In other words, they won't pay for whatever you had to pay before being admitted to the hospital. Ironically, doctors frequently recommend a variety of diagnostic tests both before and after you are admitted to the hospital. It can also become very costly.

Selecting an insurance that covers pre- and post-hospitalization costs is always a smart move. For example, 30 to 60 days prior to and following hospital treatment.

Restoration

You're drinking coffee on a Sunday morning while lying in the hospital bed. You are reflecting on how you had to spend three weeks in the hospital due to a minor cardiac issue. More significantly, you're considering how you accrued ₹4,88,000 in bills. Fortunately, the burden will be covered by your insurance policy. You have a ₹5 Lakh cover, after all. Therefore, you are not required to pay at this time. However, you begin to consider other options.

You see, you purchased a combined policy for yourself and your spouse. Additionally, the insurance will not pay her expenditures if she becomes ill in the near future. The advantages have already been exhausted.

However, what if, as soon as you filed a claim, the insurance returned to its original condition? What if your insurance company offered you a ₹5 lakh coverage once more in case you or your spouse need to visit the hospital in the near future?

Alright... You know what? With a restoration benefit, it is feasible.

Certain insurance have limitations, while others provide limitless restoration for any disease. For example, certain insurance will inform you that if you recur with the same disease, you are not eligible to receive the restoration benefit. In this instance—a cardiac issue.

If you have a combined insurance, it's wise to choose restoration benefits. Additionally, even if it's a personal policy, it makes sense. You'll be alright as long as you read the tiny print on how the cover is restored each time.

Day care Treatments

Together with your friends, you are out playing cards. Suddenly, your stomach twitches sharply. These things keep happening to you, and it's strange. So you're not very attentive. A few seconds go by. and then all of a sudden the twitch reappears. It doesn't go away this time. Rather, the ache gets worse in a second. It soon becomes intolerable. You're taken to the hospital by your buddies. The doctor then delivers the news following a brief examination. They must operate on you right away since you have appendicitis.

It's not a huge deal, though. The doctor actually promises to release you that same day. Even though you need some care, you leave the hospital in less than a day. It's a costly surgery, though. When the total comes to ₹80,000, you're in complete shock. You call your insurance company in the hopes that they will fully pay these expenses. All of a sudden, they inform you of the news. This won't be covered by them.

You want an explanation because you are furious. After calming you down, the agent goes over the policy document with you once again, making it clear that daycare therapies are not covered. Or, to put it another way, hospital-based treatments that don't last more than a day. Consider dialysis, chemotherapy, or in this instance, appendicitis.

Policies that cover childcare therapies are always preferred. Because you never know when you might land up in a bind due to your appendix.

Domiciliary Expense

A dangerous disease breaks out and causes chaos. But you have to go out every day for work. Then all of a sudden you wake up one day with a severe cold. You can't stop coughing. You're hoping it would disappear on its own. Then you have respiratory problems. You are compelled to contact the emergency services as your condition worsens. However, they claim that they are unable to locate a hospital bed. The sole option available to you is to receive treatment at home. This facility is offered by certain hospitals. However, you will have to pay for it. A huge sum of money!

Then a glimmer of optimism. Because you must receive treatment at home, your insurer says they will pay for your bills.

It can be due to a particular ailment or, as in this instance, the hospital's inability to find you a bed. Being in such a place is uncommon. Nevertheless, you are happy to have this facility.

Another nice-to-have advantage. However, you usually don't need to make a special effort to locate a coverage that will pay for living expenses.

No Claim Bonus (NCB)

You will hear from insurers that they want you to maintain your health and fitness. In an attempt to accomplish this goal, they will even provide you with incentives. How would you feel, for example, if someone promised to increase your coverage (beyond the total insured) by 50% annually if you don't make any claims? I think that would be fantastic.

Consider it. A cover of ₹5 lakhs could be your starting point. After that, it will increase to ₹7.5 lakhs, and the following year, it will increase by an additional 50% over the value insured, bringing your total coverage to 10 lakhs. They'll quit eventually, of course. When the value of the coverage doubles, the majority of insurance providers will tell you they will quit. In reality, they will also notify you that if you claim insurance after getting the bonus, they will reduce the amount covered by the same amount (50%) as before. In theory, you may return the next year with only a 5 lakhs cover.

It's still a really cool addition, though.

The No Claim Bonus is quite helpful. You only need to confirm if the bonus is truly significant. Anything less than 10%, for example, is not very significant. Therefore, it could just be a marketing ploy.

Free Health Checkups

The Saturday afternoon is languid. You can't stop staring at the receptionist, hoping that he would call your name, even though you've been waiting for nearly an hour. That's when you hear your name screamed out loud, out of the blue. You enter the doctor's office. After guiding you to a specific location, she takes your height. Then she weighs you. She takes your blood pressure after forcing you to sit up straight. She orders a blood test for blood sugar and cholesterol after listening to your heart and lungs. She also gives some tips on how to reduce your risk of diabetes, heart disease, and cancer right before you depart. The following day, you receive your reports, and everything is flawless. Follow-up care is not necessary. Not till next year, anyway.

You just received a complete physical examination. Additionally, it provides you with a certain amount of peace of mind, even though some people may choose to ignore it completely. These health examinations typically cost between ₹1,000 and ₹1,500. Additionally, it will continuously put a strain on your finances if you get these checkups on a very regular basis.

We are aware that it is not a substantial sum of money. However, it wouldn't harm to completely cut these expenses. For this reason, several insurance companies will cover your medical examinations. All right, perhaps they won't do it annually. But it's still a bonus if they only do it once every two years, isn't it?

Having a coverage that provides a free annual health checkup is nice, but it's not a deal-breaker.

Alternative Treatments

You feel exhausted every day as you approach fifty. When you see your doctor, he assures you that everything is fine. "It might be stress," he says. Despite your dissatisfaction, you return home. However, you run into your neighbor the following day. You strike up a conversation, and he recommends going to an Ayush center that has been approved by the government.

Thus, you go to the facility and have a meeting with the professionals. They advise doing Panchakarma, an Ayurvedic rejuvenation treatment. The duration is 7–11 days, and the fee will be ₹25,000. You believe it's pretty costly. Then all of a sudden you realize that Ayush therapies are covered by your health insurance policy. Thus, you approve the payment and begin working right away. Fortunately, you did remember that small detail.

One useful feature is Ayush Coverage. However, keep in mind that the coverage will only pay for these procedures if you are admitted to a government-approved Ayush hospital.

Maternity

You're considering starting a family. However, you are aware that you will need to prepare for it beforehand. Making plans for childbirth—when you will need to go to the hospital to have the baby delivered—should come first. It won't be difficult to travel there, but the hospital stay can end up costing a lot of money. However, what if you could choose an insurance plan that pays for this expense to counterbalance this? It seems like a good concept. Unfortunately, though... There are some problems with this plan.

First of all, the insurance is aware that they will be responsible for this cost if you choose to have children. Additionally, the insurer will probably have to make the payment because the majority of people have at least one child. Thus, a lot of businesses just don't provide the advantage. Those who do will ensure they receive fair compensation.

Thus, they will raise the premiums significantly. Alternatively, they will inform you that they will only pay a portion of the cost. Occasionally, they will only provide it as part of a family plan, ensuring that you and your spouse are protected. In this scenario, one of you will choose to take use of the benefit even if you won't be admitted to the hospital for a maternity-related issue.

In this world, nothing is free. Even though it's great if your insurance company pays for this, be careful not to pay exorbitant premiums in order to receive this advantage. Perhaps it isn't worth it.

Doctor Consultations

Everybody makes at least one annual trip to the doctor. However, the consultation cost for the doctor you see is extremely high. You might lose thousands of dollars for a regular inspection. Thus, you devise a brilliant scheme. You choose to get insurance and select a plan that pays for all costs related to these appointments. After searching for a few minutes, you find one that offers the benefit of an outpatient consultation.

You say — "Genius!" Additionally, you congratulate yourself.

Unfortunately, nothing in this desolate planet is as it seems.

First of all, the insurer is aware that they will be required to make an annual payment to you. Simply ask yourself. This year, have you visited the doctor? Have you paid the consultation cost of more than ₹1,000? Have you made any further payments? Do you believe there will be a shift in this trend?

Yes, nothing is going to change. Therefore, it is highly probable that the insurance will be compelled to pay you back a certain sum every year. For this reason, a lot of businesses just don't provide this advantage. Those who do will ensure they receive fair compensation. Thus, they will raise the premiums significantly. Alternatively, they will inform you that they will only pay a portion of the cost.

In this world, nothing is free. Additionally, even while OPD benefits appear to be nice on paper, you can wind up paying higher premiums. Surprisingly, in most situations, it may be more economical to forego this benefit.

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