As soon as Raman got his first job, his father convinced him to purchase health insurance. Raman purchased his first health insurance in his early twenties at a very attractive premium. It was a plain vanilla indemnity plan. However, over the years, he came across some other good health insurance policies.
Should you switch?
Raman was attracted to the extra benefits of the newer good health insurance policies. They seemed to offer more coverage for certain conditions. Their cashless hospitals’ network in his area was denser. Their customer service also seemed to be much more helpful.
On the other hand, his existing policy offered him a no claims bonus every year. That’s because he had never had to claim health insurance. Also, he was averse to the idea of breaking an established relationship with his insurer.
What should you do if you are in a similar situation? Here are some points to consider:
Will a Top-Up do the Job?
Ask yourself these questions, am I reasonably satisfied with the current insurer? What is it that is lacking with my current coverage?
If you are reasonably satisfied with your current insurer, you may want to stick with them. If your main issue is the total sum insured, you may consider top-up health insurance. Top-up health insurance covers any hospitalisation expenses that go over and above your current cover, and it also comes at an attractive premium.
Will switching from an Individual plan to a Family Floater plan work?
If you are reasonably satisfied with your current insurer, you may consider a family floater plan. A family floater plan covers all enrolled members of the family under one sum insured. The premiums on family floaters are very attractive. Generally, they are less than the cumulative premiums on individual policies.
If you intend to add seniors to the family floater, it may attract a copay clause. A copay clause means that you pay a certain fixed portion of the claim. This is applicable every time you make a claim.
For example, consider the hospitalisation expenses of ₹1 Lakh. If the copay is 20%, you are expected to bear the expenses of ₹20 thousand. The insurer will pay the rest, i.e. ₹80 thousand.
Considering this, it may be wiser to have only non-senior members on the family floater plan. You may buy a separate senior plan for the senior members.
Porting Health Insurance is Possible
IRDAI (Insurance Regulatory and Development Authority of India), the insurance regulator in India, allows porting health insurance from one insurer to another. However, there are some rules, conditions and limits around porting.
Sum Insured
The cost of hospitalisation has been increasing every year as compared to the year before that. This is because the cost of room rent, consultations, medicines and procedures has been increasing. This is called medical inflation.
Sum insured is the total amount that may be claimed by the insured person that year.
As you grow in age and stature, you may need a larger sum insured. Are you not reasonably satisfied with your current insurer? Do you also need to increase your sum insured? Then porting health insurance is a sound option that you should consider.
You can even apply for an increased sum insured while porting. You need to be aware that waiting periods for the original sum insured are carried forward. Waiting periods for the additional sum insured will start on the date of the new policy.
Specific Coverage
The Indian health insurance market is teeming with plans from various insurance companies. Some plans offer better coverage of certain conditions than others. For example, the waiting period for thyroid for a particular plan may be two years, and another plan may have a waiting period of 4 years for the same condition.
Look at the coverage of conditions to which your family may be prone. You would be better off purchasing a policy that has better coverage of those conditions.
Timing the Move
Have you claimed the existing policy this year? If yes, it would be a good time for porting your health insurance policy. Since you have already made a claim, you are not eligible for a no claims bonus. Thus, you don’t stand to lose it if you port this year.
In any case, you should be well researched and prepared in advance, well before the expiry of the current policy. This is because of the rules around porting health insurance. You can apply for porting 45 days or more before the expiry of the current policy.
Raman weighed all the pros and cons of porting health insurance carefully. He then decided to port to a good health insurance policy. His new health insurance policy offers better customer service, network hospitals and coverage.
Read more about 6 lesser-known facts about Health Insurance here.