How to choose a right mediclaim policy

Healthcare costs for hospitalisation in India have risen sharply in the recent years keeping pace with global trends. Many families have seen their financial planning going haywire due to unexpected costs incurred on hospitalisation of a family member. However, the good news is that now there is a far greater awareness about medical insurance that helps you in choosing a right mediclaim policy.

Say, if you have diabetes, wouldn't you (all other things being the same) buy a mediclaim policy that may be a little more expensive but which will immediately cover the hospitalisation expenses arising from complications connected with this disease (heart problems, kidney or eye problems associated with diabetes) without considering them as complications arising from pre-existing disease?

Or would you go in for a comparatively cheaper mediclaim policy which treats all such diseases as pre-existing and hence not immediately coverable. Want to spot the difference?

Well pre-existing disease is probably the most important parameter, which is relevant because if a disease is treated as pre-existing then the policy normally provides no coverage or very restricted coverage for expenses incurred due to that disease in the immediate future.

Pre-existing disease coverage: What you should know

Here are a few broad parameters that will help you choose a right mediclaim policy:

The definition
Most policies provide that any disease that was present at any time in the past (including any disease, which the insured person may not have been aware of) is treated as pre-existing. But some have a narrower definition which may extend to only diseases for which the insured person had sought consultation for or was treated for or s/he was aware of during say the last four years. Narrower the definition, the better it is for consumers.

The cooling off period
This is the stipulated period earmarked by the company, which denotes that after how many years of continuous coverage the pre-existing disease will get covered. This is important as after the expiry of the cooling off period even pre-existing diseases get covered. A fine point is to find out if the company you are considering allows your track record of continuous coverage from another insurance company for the purpose of calculating this cooling off period or insists only on continuous coverage with itself for this purpose.

Special dispensation for diabetes/hypertension
Diabetes and hypertension, have acquired epidemic status in India. A host of illnesses/diseases such as heart disease, kidney failure, paralysis, stroke, eye problems can trace their root cause to either diabetes or hypertension or both. Since the definition of pre-existing illness includes any complications arising there from, this has been a major reason for disputes between mediclaim providers and consumers in the past. Hence, any policy that provides a special dispensation for the complication arising out of diabetes/ hypertension is relevant for a person suffering from either.

Pre-existing disease coverage: Other vital parameters

There's more to pre-existing illness fine print and it helps you know these before you make your decisions.

· Sub- limits: Here the overall coverage is broken down into the maximum payable for a particular kind of expense. For example, a few insurance companies now provide that room rent cannot exceed one per cent of the covered amount or that doctors/consultants fees cannot exceed 20 or 25 per cent of the covered amount.

· Co-pay requirements: Quite a few companies now require that the insured bear a certain percentage of the eligible expenses either unconditionally or under certain conditions. Some companies provide a discount in premium if you agree to co-pay. Others might want co-pay if you choose to get treated in a non-network hospital or others may have co-pay for choosing a single air conditioned room or for getting treated in a hospital in a higher cost city. The co-pay feature is built in to ensure that the insured chooses the appropriate hospital/room/doctor level relevant to his economic status and also watches the reasonableness of the charges levied by the hospital to ensure that there is no overspend or overcharge just because of the existence of a person owns a mediclaim policy.

· Specific exclusions: Almost all policies have general exclusions such as costs incurred for AIDS / sexually transmitted diseases or congenital diseases, etc. Watch out for exclusions if it affects you.

· Maximum coverage amount: This is important, as a particular policy that suits you may not be available for coverage that you seek.

· Maximum age at entry: Particularly relevant for senior citizens as quite a few policies may not be available to them.

· Renewability up to what age: Relevant for senior citizens as well as people in their 50s since they need to be able to enjoy the benefit of their track record.