Q. My father is 58 years old, just retired and my mother is 51, a homemaker. I'm interested in providing them a health insurance cover. Both of them don't have any prior health insurance covers. I am not clear as to the factors to consider while choosing the best scheme. Are Mediclaim and Health insurance the same? If not, what is the difference and should I purchase both to support their hospitalisation in future?
VIGNESH
A. The easiest way to get your parents hospitalisation insurance is to add them to your employer’s policy where you are covered. If this is not an option you can buy a hospitalisation policy for them which will reimburse hospitalisation and related expenses as defined in the scope.
For choosing a policy, please consider the possible coverage you will need and the affordability of the premium. Considering the age band of your parents, insurance companies may offer only restricted cover to begin with. You can shop around for the optimum cover you want and enhance the cover going forward. You can drill down to coverage details like sub-limits on room rent and other expenses and see if the hospitals you will want to choose for treatment are on the preferred provider network of the insurer. The other factors for selecting a policy are the claims payment and customer friendliness of the company which you can read about or get references from your circle and the efficiency and responsiveness of the agent you are going to buy the policy from.
Mediclaim is a brandname for hospitalisation insurance used by the four public sector insurance companies namely, The New India Assurance Company Limited, United Indian Insurance Company Limited, The Oriental Insurance Company Limited and National Insurance Company Limited.
Private sector companies also offer hospitalisation policies with different names.
Health insurance is more a generic term which can include hospitalisation policies which are called indemnity policies because they indemnify, or make good, your expenses. They are annual policies and can be renewed for life.
The other type of health insurance is a benefit policy, also annual in nature. They pay a lumpsum benefit on diagnosis of a named illness in the policy or when a named major surgery becomes necessary. The claim amount is the sum insured of the policy and once it is paid the policy comes to an end and cannot be renewed. If you want to enhance your health insurance coverage you can buy a hospitalisation policy and supplement it with a critical illness or major surgery policy. You can also increase your coverage amount for hospitalisation by buying a top-up policy which will work out to be more cost effective than enhancing the sum insured on the basic policy.
Q. I am currently working for an MNC, and medical insurance premium for self and family is borne by the company. My question is, post-retirement, how may I opt for medical insurance by using the current claim history?
RAMAN N.S.
A. One way to make a smooth transition from your employer’s corporate group hospitalisation policy to personal cover is to stay with the same insurer. Your employer may be able to help you with that.
Otherwise start a new policy with the same insurer a few years before your retirement so that you establish a track record and work off your waiting period for pre-existing conditions. This policy can even be a small one and the sum insured enhanced after retirement, but remember the waiting period will apply to the enhanced part of the sum insured. A third option is to provide your personal insurer, whether the same company or a different company, with your claims-free record during employment and negotiate a personal policy with a possible waiver of waiting period. I know of cases where this proof has worked for making a claim at a time when the waiting period was just going to be over, but the previous insurance records showed that it was not a pre-existing condition.
(The writer is a business journalist specialising in insurance & corporate history)
