Keep your insurance healthy

It is a lazy, cosy Sunday. The house is quiet as the wife and children are spending the day with your in-laws, and the India-Pakistan match is just about to go live on TV. Life is simply perfect… and then the phone rings.

Your wife was feeling ill and has been admitted to the hospital. The doctors have insisted on running a battery of tests. How could this happen? She is young and in good health, conscious about her diet and habits. This cannot be happening. It's the end of the month, the budgets have almost dried up, and you're awaiting your salary credit due a few days from now.

But it is happening, and your heartbeat speeds up, out of concern for your wife as well as worry about the costs.

Then, in the middle of all that panic, you remember that you have a medical policy for your family too. You give thanks that your wealth manager had insisted on the best policy with family cover and you've been paying hefty premiums over the years. Surely, you think, you must be equipped to bear the costs and can focus on ensuring your wife recovers soon with the best medical treatment. But that is when it starts…

While your wealth manager did advise you and choose the best product in the market, he also asked you to read the fine print on the document. However, since you were so busy, you let convenience take over and you simply signed the document without reading it. You considered the premium being charged but you forgot to consider the features which are equally, if not more, important.

Here are some of the common mistakes that you may have made.

Sub-limits: Did you know that many policies come with sub-limits on the sum assured? What this means is that besides room rent, your policy comes with sub-limits on surgeries, ICU charges and other procedures that reduces the claim amount by huge margins, which means that, the money you will eventually receive on your insurance claim will not cover the expenses incurred. Exercise your options to invest in policies with minimum or no sub-limits.

Co-payment: While you were hoping that your insurance claim would ease your financial stress, you did not read the print that said you would agree to co-payment. This simply means that as a policyholder, you will bear a specified percentage of the claim amount, while the insurance company will bear the rest of the bill. While the clause is generally inserted to keep a check on undesirable expenses, it definitely makes sense to opt for policies without co-payment.

Network of hospitals: It was an emergency and so your family admitted your wife to the hospital closest to home because of convenience, but unfortunately, it is not included in your insurer's network. Check if the hospitals you would prefer to go to are included by your insurer to avail of the cashless facility. Do not consider policies by the number of hospitals included. Instead check for the reputed ones closest to home.

Exclusions: While you can't predict the nature of any illness, it is prudent to be prepared given our hectic lifestyles. Every health policy comes with rules regarding exclusions or diseases/illnesses or procedures that the policy does not cover, either for a specified time period or for the entire term. For instance, cataract or knee replacement may not be compensated for in the first two years. Insurers apply this rule to avoid having to pay in cases where people buy insurance covers after being diagnosed with a disease.

Ensure that you avoid policies that have too many exclusions. Make a note to read the clause and ensure that there is no uncertainty and that it reads clearly. For e.g. A leading health insurance company has a clause, "Treatment to relieve symptoms caused by ageing, puberty, or other natural physiological cause, such as menopause and hearing loss caused by maturing or ageing." Vague exclusion clauses can be interpreted in various ways, and ensure loopholes, increasing the chances of a dispute.

Day-care procedures: The good news is that your wife just needs to have a day-care procedure and can be home in the evening. But unfortunately, while the procedure is expensive, many policies do not compensate you unless you are hospitalized for at least 24 hours. Simply put, your policy does not cover day-care procedures. It is ironic however, that nowadays, owing to improvements in technology and medical care, you don't need hospitalization for several procedures including non-invasive or laparoscopic surgeries, which are recognized only by few of the newer policies. Hence, opt for plans that cover the maximum number of day-care procedures.

Alternative treatment: While your wife is discharged and now safely home, she still needs to avail of some alternative methods of treatment such as Homeopathic, Unani and Ayurvedic medicine which are covered by only a few policies. However, such alternative methods are highly recommended for the treatment of some diseases and they do cost money. So ensure that you opt for policies that also cover such alternative treatments, even if they cost more than the normal plan covering allopathic treatments only.

That example was fiction, but it rings true in real-life situations, too. In the age of rising healthcare costs, it is important that you are aware of all details to help protect yourself and your family not just from illness but also from financial stress, ensuing from high healthcare expenses.

Almost all policy documents are available on the internet today, so feel free to download policy wordings, and read the terms and conditions of policies carefully in order to make an informed choice. Search and consider ratings provided by various publications that do independent research on health insurance, and evaluate them. Alternatively you can find an unbiased investment advisor, who gives a fair comparison of various products. Choose the policy that is most inclusive and offers most clarity and convenience.

Spend your money wisely to buy adequate insurance and choose the right policy, ensuring the best of health for your family -- and your finances.

The writer is investment advisor, Circle Wealth Advisorsu00a0