Topic 1: How different is individual health insurance from family floater and critical illness plan?
Brief
A normal health plan is a must for covering most of your medical treatment costs while the critical illness plan will come handy in case of critical illness, where the treatment costs are much higher.
Article
A better way to avoid paying hospital bills from one’s own pocket is to make an insurance company pay for it. And, for that, you need to have a health insurance plan with enough coverage amount to meet the hospitalization expenses.
In a health insurance plan, depending on the coverage amount (sum insured) you want to keep, the premium has to be paid on an annual basis to the insurance company. At the time of hospitalization or at the occurrence of the insured event, the insurer pays the hospital and the policyholder need not worry about the medical bills.
What is equally important while purchasing a health insurance plan is to buy the right kind of policy that will keep the claim settlement process simpler.
A health insurance plan is advisable for all family members. But then, there are individual health insurance plan and a Family Floater plan and even the Critical Illness health insurance to choose from.
The most common form of health insurance plan is the individual health insurance plan popularly called the Mediclaim plans. They cover hospital bills if there is a minimum 24 hour of hospitalization, in addition to certain specific day-care treatment as well.
An individual health insurance plan is a must have for all for an amount that is depending on the city you reside in, the kind of hospitals in your area and especially what kind of hospitals you prefer. With rising medical costs, a coverage of Rs 5 to Rs 10 Lakh or even more is suggested. The actual premium will depend on the amount of coverage and your age.
And then, if you have a small family, buying a Family Floater plan could be an option that you may consider. In a Family Floater plan, all the family members can be covered under one plan, while the premium is decided on the amount of cover and the age of the eldest member. Overall, the premium outgo will be less. The only downside is that the coverage will be restrictive and will act as an umbrella cover for all members. As not all members are likely to fall ill in the same year, a Family Floater plan may be considered especially if there are kids in the family. Insurers do not allow Family Floater coverage when children age crosses 25 years.
So, between an individual health insurance plan and a Family Floater, how should one decide? “It is always better to take separate individual plans. This way you can ensure that the claims made by one individual does not impact the premiums for others. However, individual plans will be more expensive. Getting a family floater plan is the more economical option. You can get a large cover for the entire family and hope that not too many claims are made overall so that the cover is not exhausted.
Another key factor to consider while choosing between individual health insurance plan and Family Floater plan is your own and family’s medical history. If one of the persons in the family has a pre-existing health condition. In that case it is better to buy a separate insurance for that person tailored to their ailment and leave the family floater for the others.
After having purchased an individual health insurance plan or Family Floater plan, it’s time to get coverage for some serious illness. Certain critical illnesses may not require a longer hospitalization but there could be a bigger financial impact later on.
Here in comes the role of a critical illness plan, which unlike the individual health insurance plan (reimbursement plans) are defined benefit plans. So, in a critical illness plan, the sum insured that one keeps by paying the premium is entirely paid by the insurer on the occurrence of the specified critical illness, thus making it a defined benefit plan.
Should everyone then consider buying a critical illness plan and around what age and what amount it is best recommended. “This is a function of affordability. If you can afford to take a critical illness plan separately, you should take one with a large cover. Though a normal health insurance plan will cover the treatment for critical illnesses, most likely the cover amount will not suffice in case of treatment critical illnesses. A normal health plan is a must for covering most of your medical treatment costs. The critical illness plan will come handy in case of critical illness, where the treatment costs are much higher. Of course, with age the chances of critical illnesses are higher. But best to take the plan when you do not have any symptoms as it will be increasingly difficult as age increases and the normal age-related complications kick in.
And, here’s an important watch out while buying critical illness plans – Look for critical illness plans that pre-existing conditions should not be excluded permanently and there should be no survival period. Permanent exclusions should be avoided because ailments such as hypertension or diabetes can result in many critical illnesses such as heart attacks or strokes. You do not want even the remote possibility of these claims being denied in the future.
A normal health plan is a must for covering most of your medical treatment costs while the critical illness plan will come handy in case of critical illness, where the treatment costs are much higher.
Article
A better way to avoid paying hospital bills from one’s own pocket is to make an insurance company pay for it. And, for that, you need to have a health insurance plan with enough coverage amount to meet the hospitalization expenses.
In a health insurance plan, depending on the coverage amount (sum insured) you want to keep, the premium has to be paid on an annual basis to the insurance company. At the time of hospitalization or at the occurrence of the insured event, the insurer pays the hospital and the policyholder need not worry about the medical bills.
What is equally important while purchasing a health insurance plan is to buy the right kind of policy that will keep the claim settlement process simpler.
A health insurance plan is advisable for all family members. But then, there are individual health insurance plan and a Family Floater plan and even the Critical Illness health insurance to choose from.
The most common form of health insurance plan is the individual health insurance plan popularly called the Mediclaim plans. They cover hospital bills if there is a minimum 24 hour of hospitalization, in addition to certain specific day-care treatment as well.
An individual health insurance plan is a must have for all for an amount that is depending on the city you reside in, the kind of hospitals in your area and especially what kind of hospitals you prefer. With rising medical costs, a coverage of Rs 5 to Rs 10 Lakh or even more is suggested. The actual premium will depend on the amount of coverage and your age.
And then, if you have a small family, buying a Family Floater plan could be an option that you may consider. In a Family Floater plan, all the family members can be covered under one plan, while the premium is decided on the amount of cover and the age of the eldest member. Overall, the premium outgo will be less. The only downside is that the coverage will be restrictive and will act as an umbrella cover for all members. As not all members are likely to fall ill in the same year, a Family Floater plan may be considered especially if there are kids in the family. Insurers do not allow Family Floater coverage when children age crosses 25 years.
So, between an individual health insurance plan and a Family Floater, how should one decide? “It is always better to take separate individual plans. This way you can ensure that the claims made by one individual does not impact the premiums for others. However, individual plans will be more expensive. Getting a family floater plan is the more economical option. You can get a large cover for the entire family and hope that not too many claims are made overall so that the cover is not exhausted.
Another key factor to consider while choosing between individual health insurance plan and Family Floater plan is your own and family’s medical history. If one of the persons in the family has a pre-existing health condition. In that case it is better to buy a separate insurance for that person tailored to their ailment and leave the family floater for the others.
After having purchased an individual health insurance plan or Family Floater plan, it’s time to get coverage for some serious illness. Certain critical illnesses may not require a longer hospitalization but there could be a bigger financial impact later on.
Here in comes the role of a critical illness plan, which unlike the individual health insurance plan (reimbursement plans) are defined benefit plans. So, in a critical illness plan, the sum insured that one keeps by paying the premium is entirely paid by the insurer on the occurrence of the specified critical illness, thus making it a defined benefit plan.
Should everyone then consider buying a critical illness plan and around what age and what amount it is best recommended. “This is a function of affordability. If you can afford to take a critical illness plan separately, you should take one with a large cover. Though a normal health insurance plan will cover the treatment for critical illnesses, most likely the cover amount will not suffice in case of treatment critical illnesses. A normal health plan is a must for covering most of your medical treatment costs. The critical illness plan will come handy in case of critical illness, where the treatment costs are much higher. Of course, with age the chances of critical illnesses are higher. But best to take the plan when you do not have any symptoms as it will be increasingly difficult as age increases and the normal age-related complications kick in.
And, here’s an important watch out while buying critical illness plans – Look for critical illness plans that pre-existing conditions should not be excluded permanently and there should be no survival period. Permanent exclusions should be avoided because ailments such as hypertension or diabetes can result in many critical illnesses such as heart attacks or strokes. You do not want even the remote possibility of these claims being denied in the future.
Brief
Health Insurance helps in you tax saving. Read more to know how
Article
This rider allows you to opt for a room with a higher sub-limit, or even without any sub-limit. Generally, most policies set a maximum cap on room rent. They may provide financial cover for only standard or semi-private rooms in the insurance plan. The room rent waiver allows you to go for a room of your choice, including private and deluxe rooms, without having to pay any additional fee at the time of the admission.
Every year, whenever it’s time to file your income tax return,do you wish you had figured out more ways to save taxes? Well, there are many investment options available these days that can help you do that.But if you wish to kill two birds with one stone, then buying the best health insurance policy is a good idea. It not only shields your savings during medical emergencies, but also saves tax. Let’s delve deep into how that happens.
Tax structure and tax saving measures
If you are a responsible citizen of this country, you pay your taxes on time. You may know that there are different tax slabs and there are two regimes you can opt for. In each regime, the government has designated what amount of income will fall under what percentage of income to be paid as tax. Now, there are ways to reduce your taxable income.
For example, Section 80C of the Income Tax Act allows you to make various investments and get your taxable income reduced up to the limit of INR 1.5 lakh in a financial year. Here you can invest in plans like Public Provident Fund and National Savings Certificate among others. Similarly, there are other sections like 80D, 80EE, and 80G that help you save tax.
Steps to save tax with health insurance
The premium on your medical insurance policy is considered for tax deductions under Section 80D. You can avail up to INR 25,000 for self, spouse, and child and INR 25,000 for parents below 60 years, and INR 50,000 for parents who are senior citizens. For example, Rahul earns INR 8 lakhs annually. If he buys a health plan of INR 15,000 for himself and his wife each and then INR 60,000 for elderly parents, he will get a tax rebate of 25,000+50,000 i.e.INR 75,000.Which means, his taxable income will become INR 7,25,000.
Benefits of buying health insurance
Now, you might think that Rahul is essentially paying INR 90,000 in health insurance premium annually but what if no one in his family gets ill that year? Is he is wasting a big amount for no real benefit? No, he is not! Rahul is making sure that no medical emergency ever puts him under extreme financial strain. Here’s why Rahul is making a wise decision:
Conclusion
It is important to note that the payment for the premium should be done through a non-cash mode to be eligible for tax deduction under Section 80D. And many sub-sections talk about specific age groups and types of illness.
Health Insurance helps in you tax saving. Read more to know how
Article
This rider allows you to opt for a room with a higher sub-limit, or even without any sub-limit. Generally, most policies set a maximum cap on room rent. They may provide financial cover for only standard or semi-private rooms in the insurance plan. The room rent waiver allows you to go for a room of your choice, including private and deluxe rooms, without having to pay any additional fee at the time of the admission.
Every year, whenever it’s time to file your income tax return,do you wish you had figured out more ways to save taxes? Well, there are many investment options available these days that can help you do that.But if you wish to kill two birds with one stone, then buying the best health insurance policy is a good idea. It not only shields your savings during medical emergencies, but also saves tax. Let’s delve deep into how that happens.
Tax structure and tax saving measures
If you are a responsible citizen of this country, you pay your taxes on time. You may know that there are different tax slabs and there are two regimes you can opt for. In each regime, the government has designated what amount of income will fall under what percentage of income to be paid as tax. Now, there are ways to reduce your taxable income.
For example, Section 80C of the Income Tax Act allows you to make various investments and get your taxable income reduced up to the limit of INR 1.5 lakh in a financial year. Here you can invest in plans like Public Provident Fund and National Savings Certificate among others. Similarly, there are other sections like 80D, 80EE, and 80G that help you save tax.
Steps to save tax with health insurance
The premium on your medical insurance policy is considered for tax deductions under Section 80D. You can avail up to INR 25,000 for self, spouse, and child and INR 25,000 for parents below 60 years, and INR 50,000 for parents who are senior citizens. For example, Rahul earns INR 8 lakhs annually. If he buys a health plan of INR 15,000 for himself and his wife each and then INR 60,000 for elderly parents, he will get a tax rebate of 25,000+50,000 i.e.INR 75,000.Which means, his taxable income will become INR 7,25,000.
Benefits of buying health insurance
Now, you might think that Rahul is essentially paying INR 90,000 in health insurance premium annually but what if no one in his family gets ill that year? Is he is wasting a big amount for no real benefit? No, he is not! Rahul is making sure that no medical emergency ever puts him under extreme financial strain. Here’s why Rahul is making a wise decision:
- Due to advancements in the medical sector, the price of healthcare facilities is exponentially rising. Which means, even a minor emergency can lead to a major financial setback.
- A health plan covers hospitalisation expenses and the costs incurred before and after it for a certain period.
- It provides benefits like a large network of hospitals that allows you to get cashless treatment at the nearest hospital.
- The insurance also provides coverage for alternate treatments.
- You get free medical check-ups.
- It comes with lifetime renewability.
- You get reimbursed for ambulance charges within the same city and even for Air Ambulance in case of an emergency if the policy wording mentions it.
- The best health insurance policies allow customisation as per your needs and budget.
- For every claim-free year, you get rewarded with discounts.
Conclusion
It is important to note that the payment for the premium should be done through a non-cash mode to be eligible for tax deduction under Section 80D. And many sub-sections talk about specific age groups and types of illness.
Brief
As a result of the pandemic, people are more actively asking about and buying insurance which is a positive development but there are also some areas to be watchful about.
Article
The importance of insurance has grown multifold in recent times. With hospitalization expenses running into lakhs during the treatment of coronavirus, many families had to either borrow from friends, relatives or dip into their savings to meet the cost of hospital bills. Even an untimely death in a family left many families financially stranded in the absence of adequate life insurance coverage.
While the importance of insurance has increased and the need to go for an insurance policy is felt more than in the past, are people actually moving on in the right direction? To find out how the buying behavior and the perception towards insurance have changed especially after the outbreak of Covid-19.
As a result of the pandemic people are more actively asking about and buying insurance. This is a positive development but there are also some areas to be watchful about.
Many who would have dismissed insurance previously are more aware of their own fragility. They are enquiring about insurance and more willing to buy quickly. Whereas previously a large number of potential buyers would request multiple meetings and calls before making a purchase they are now willing to buy online or based just on phone conversations.
The questions people ask are also more searching and based on their personal experiences. Buyers now want to get into the details of coverage.
Typically, 5% of the people insured, fall ill and claim insurance in a given year. During the pandemic this proportion increased. So, many policyholders have experienced claims at close quarters and are more aware today about the process of claim settlement.
Insurers pay a large number of claims but there are two issues specific to covid that have come up.
First, hospital charges for covid in many cases are more than the insurer’s own recommendation of standardised tariff. In such cases insurers pay their prescribed rates but hospitals charge their own rates from patients. So, patients pay out of pocket for no fault of theirs. I have seen cases where the insurer cited a government notification on hospital tariffs to pay a lower amount. However, we had to point out that the government notifications were only applicable to about 70% of the hospital beds and the hospitals could charge their own rates on remaining beds. In such cases the claims were then paid.
Sometimes covid claims have been repudiated on the ground that hospitalisation was not warranted. However, patients generally follow the instructions of a treating doctor. Such cases when escalated to the ombudsman get paid but it is a time consuming process.
A third issue has been that patients have not been able to obtain original or paper copies of various bills and medical documents. For a brief period insurers accepted soft copies but now are gradually returning to the need for hard copies to be sent to them.
These issues are getting streamlined and there are some steps that can significantly increase claim settlement. These are to opt for cashless claim settlement, inform the insurer in advance of a treatment, avoid unnecessary hospitalisation to convert an OPD procedure to IPD and escalate the claim to the ombudsman if aggrieved.
Cashless claims put a time pressure on insurers to complete the approval before discharge. This works to a patient’s advantage because the alternative which is to claim reimbursement can often take time as you put together bills and answer the insurer’s queries.
Do go to a hospital with a well-functioning TPA or insurer helpdesk. Informing the insurer about hospitalisation is useful because the insurer has time to react and ask you questions beforehand. Be clear that insurance does not pay for OPD procedures unless that is specifically a product benefit listed out. Often patients will get hospitalised for procedures that do not require such care. These claims are unlikely to be passed.
Finally, if you are sure about your claim then see it through by going to the grievance cell or take your case to the ombudsman if it is rejected. The ombudsman is policyholder friendly and payable claims get paid.
As a result of the pandemic, people are more actively asking about and buying insurance which is a positive development but there are also some areas to be watchful about.
Article
The importance of insurance has grown multifold in recent times. With hospitalization expenses running into lakhs during the treatment of coronavirus, many families had to either borrow from friends, relatives or dip into their savings to meet the cost of hospital bills. Even an untimely death in a family left many families financially stranded in the absence of adequate life insurance coverage.
While the importance of insurance has increased and the need to go for an insurance policy is felt more than in the past, are people actually moving on in the right direction? To find out how the buying behavior and the perception towards insurance have changed especially after the outbreak of Covid-19.
As a result of the pandemic people are more actively asking about and buying insurance. This is a positive development but there are also some areas to be watchful about.
Many who would have dismissed insurance previously are more aware of their own fragility. They are enquiring about insurance and more willing to buy quickly. Whereas previously a large number of potential buyers would request multiple meetings and calls before making a purchase they are now willing to buy online or based just on phone conversations.
The questions people ask are also more searching and based on their personal experiences. Buyers now want to get into the details of coverage.
Typically, 5% of the people insured, fall ill and claim insurance in a given year. During the pandemic this proportion increased. So, many policyholders have experienced claims at close quarters and are more aware today about the process of claim settlement.
Insurers pay a large number of claims but there are two issues specific to covid that have come up.
First, hospital charges for covid in many cases are more than the insurer’s own recommendation of standardised tariff. In such cases insurers pay their prescribed rates but hospitals charge their own rates from patients. So, patients pay out of pocket for no fault of theirs. I have seen cases where the insurer cited a government notification on hospital tariffs to pay a lower amount. However, we had to point out that the government notifications were only applicable to about 70% of the hospital beds and the hospitals could charge their own rates on remaining beds. In such cases the claims were then paid.
Sometimes covid claims have been repudiated on the ground that hospitalisation was not warranted. However, patients generally follow the instructions of a treating doctor. Such cases when escalated to the ombudsman get paid but it is a time consuming process.
A third issue has been that patients have not been able to obtain original or paper copies of various bills and medical documents. For a brief period insurers accepted soft copies but now are gradually returning to the need for hard copies to be sent to them.
These issues are getting streamlined and there are some steps that can significantly increase claim settlement. These are to opt for cashless claim settlement, inform the insurer in advance of a treatment, avoid unnecessary hospitalisation to convert an OPD procedure to IPD and escalate the claim to the ombudsman if aggrieved.
Cashless claims put a time pressure on insurers to complete the approval before discharge. This works to a patient’s advantage because the alternative which is to claim reimbursement can often take time as you put together bills and answer the insurer’s queries.
Do go to a hospital with a well-functioning TPA or insurer helpdesk. Informing the insurer about hospitalisation is useful because the insurer has time to react and ask you questions beforehand. Be clear that insurance does not pay for OPD procedures unless that is specifically a product benefit listed out. Often patients will get hospitalised for procedures that do not require such care. These claims are unlikely to be passed.
Finally, if you are sure about your claim then see it through by going to the grievance cell or take your case to the ombudsman if it is rejected. The ombudsman is policyholder friendly and payable claims get paid.
Brief
Not renewing an insurance policy even during the grace period defeats the purpose of buying a cover and your financial protection is at risk. Read the article to know more.
Title
While it is important to buy a life insurance policy to take care of the financial needs of dependents in case of untimely death of the policyholder, it is equally important to pay the renewal premiums on time so that the policy does not lapse. If a policy lapses, he will not only be unable to get any claim but won’t even be able to revive it after a certain point of time.
Not renewing an insurance policy even during the grace period defeats the purpose of buying a cover. Insurers send mails and messages a month before a policy is due for renewal. If the premium is not paid within the due date, insurers give a grace period which is 15 days in case the premium is paid in monthly instalments and 30 days in case the premium is paid on a quarterly, half-yearly or yearly basis.
Grace period to lapse
If the premium is not paid even during the grace period, the policy lapses and all the benefits covered under the policy are terminated. While some companies run special campaigns to revive lapsed policies, policyholders must check the policy details and get in touch with the insurer to revive a lapsed policy. A policyholder must note that the policy is still in force during the grace period. So, if anything happens to the policyholder during that period, the nominee would still be eligible for the claims and all other benefits associated with the policy terms and conditions.
In order to promote the persistency of life insurance policies and address the gap created by the exit of insurance agents in servicing life insurance buyers, the insurance regulator has set norms that insurance companies allot lapsed orphan life insurance policies to individual insurance agents whose registration is in force. The allotted agent’s details would be intimated by the insurer to the policyholder concerned.
Reviving the cover
In life insurance, insurers provide a reinstatement period of two to five years to revive a policy. In fact, the Insurance Regulatory and Development Authority’s guidelines stipulate that all life insurance policies underwritten before 2019 will have a maximum revival period of two years and policies underwritten after that will have a maximum revival period of five years and after that the policy will get terminated. If the premium is not paid during the grace period and lapses, the insured will no longer have any coverage and will not be eligible for any death benefit. However, if it is revived, the benefits will once again continue.
A policyholder must read the document which underlines the criteria of reviving the lapsed policy and get in touch with the insurer. To revive a lapsed policy, the policyholder will have to sign a standard revival form, submit proof of continued insurability and may have to go for a medical check-up at a designated medical centre of the company.
Once the company accepts the lapsed policy for revival, the policyholder will have to pay the premium for all the years since the lapse of policy along with interest on outstanding premiums, applicable taxes and even penalty amount for non-payment of premiums. The renewed policy may have new terms and conditions.
While you may think of buying a new policy instead of reviving the lapsed one, note that the premium for a new policy will be much higher as compared to the old policy because of the change in the insured’s age and health conditions. Also, the policyholder will not get the bonus accumulated in the lapsed policy.
Ideally, to pay the renewal premium, the insured must set up standing instructions in a bank for electronic clearing services. This will ensure that the life insurance premiums are paid on time and the policies do not lapse.
Not renewing an insurance policy even during the grace period defeats the purpose of buying a cover and your financial protection is at risk. Read the article to know more.
Title
While it is important to buy a life insurance policy to take care of the financial needs of dependents in case of untimely death of the policyholder, it is equally important to pay the renewal premiums on time so that the policy does not lapse. If a policy lapses, he will not only be unable to get any claim but won’t even be able to revive it after a certain point of time.
Not renewing an insurance policy even during the grace period defeats the purpose of buying a cover. Insurers send mails and messages a month before a policy is due for renewal. If the premium is not paid within the due date, insurers give a grace period which is 15 days in case the premium is paid in monthly instalments and 30 days in case the premium is paid on a quarterly, half-yearly or yearly basis.
Grace period to lapse
If the premium is not paid even during the grace period, the policy lapses and all the benefits covered under the policy are terminated. While some companies run special campaigns to revive lapsed policies, policyholders must check the policy details and get in touch with the insurer to revive a lapsed policy. A policyholder must note that the policy is still in force during the grace period. So, if anything happens to the policyholder during that period, the nominee would still be eligible for the claims and all other benefits associated with the policy terms and conditions.
In order to promote the persistency of life insurance policies and address the gap created by the exit of insurance agents in servicing life insurance buyers, the insurance regulator has set norms that insurance companies allot lapsed orphan life insurance policies to individual insurance agents whose registration is in force. The allotted agent’s details would be intimated by the insurer to the policyholder concerned.
Reviving the cover
In life insurance, insurers provide a reinstatement period of two to five years to revive a policy. In fact, the Insurance Regulatory and Development Authority’s guidelines stipulate that all life insurance policies underwritten before 2019 will have a maximum revival period of two years and policies underwritten after that will have a maximum revival period of five years and after that the policy will get terminated. If the premium is not paid during the grace period and lapses, the insured will no longer have any coverage and will not be eligible for any death benefit. However, if it is revived, the benefits will once again continue.
A policyholder must read the document which underlines the criteria of reviving the lapsed policy and get in touch with the insurer. To revive a lapsed policy, the policyholder will have to sign a standard revival form, submit proof of continued insurability and may have to go for a medical check-up at a designated medical centre of the company.
Once the company accepts the lapsed policy for revival, the policyholder will have to pay the premium for all the years since the lapse of policy along with interest on outstanding premiums, applicable taxes and even penalty amount for non-payment of premiums. The renewed policy may have new terms and conditions.
While you may think of buying a new policy instead of reviving the lapsed one, note that the premium for a new policy will be much higher as compared to the old policy because of the change in the insured’s age and health conditions. Also, the policyholder will not get the bonus accumulated in the lapsed policy.
Ideally, to pay the renewal premium, the insured must set up standing instructions in a bank for electronic clearing services. This will ensure that the life insurance premiums are paid on time and the policies do not lapse.