How to select the best mediclaim policy in 2010

Today, health insurance is becoming a necessity and one should look at it as an essential investment for the well being of self and family. Mediclaim policies are extremely important to protect against huge medical expenditure when one is ill.

Why should you take health insurance?

The average life span of an individual has increased considerably in India due to better health conditions, awareness about one's well being and improved medical facilities.

At the same time, the medical costs of treatment and surgery have increased a lot. Therefore, medical insurance makes complete sense, especially where majority of the family members are dependent on one or two earning members, as is generally the case in an average Indian household.

about how to select the best mediclaim policies.

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Medical insurance policies entitle you and your family members covered under the policy to take advantage of the high cover in times of medical emergencies.

There are two options available in the case of mediclaim policies:

1. Floater policy where the maximum sum assured allowed for all members of the policy in a year is Rs 10 lakh

2. Individual policies where each member can take cover up to Rs 10 lakh in a year

Individual policies are more expensive than the floater policies, so depending on the need, one can choose the option that suits his/her need the best. An additional advantage of individual policies is the no-claim bonus declared for every claim free year of the policy.

Although the maximum cover that can be taken through an insurance company by an individual is Rs 10 lakh, you are allowed to take multiple policies with different insurance companies with a maximum cover of Rs 10 lakh per policy.

In times of claim, the amount required will be split proportionately between all the insurance companies.

If you are young and just starting a family, then it is recommend that you choose an individual policy with a lower sum assured of Rs 2.5 to 3 lakh for all members of the family. If you have dependent parents under the age of 60, it would be advisable to cover them as well.

Depending on affordability, you can either take individual policies or a floater policy to provide medical insurance for them.

Medical checkups and illness covered

Most mediclaim policies do not have medical check-ups for individuals under the age of 45/50. They also have a set time period, which could be anywhere between 2 to 4 years, within which pre-existing illnesses are not covered.

Dental and illnesses relating to pregnancy are not covered by majority of the health insurance policies. It is also advisable to go through the policy specifics to learn what payouts can be expected from the policy in case of different illnesses and medical procedures.

Role of an advisor

What is equally important while taking a health insurance policy is having a good advisor. Like other insurance policies, medical insurance requires good amount of policy servicing, especially while making a claim.

Many insurance companies now provide cashless medical claim facilities wherein the individual can get the treatment done in specified hospitals without making any direct payment. The payment is made directly to the hospital by the insurance company, subject to the terms and conditions of the medical insurance policy.

Even though there is sufficient paper work involved in the process, it helps in times of urgent need to know that such facilities exist and can be called upon.

Insurance companies now provide market-linked health insurance policies as well. These are a combination of mediclaim and investment and work similar to unit linked life insurance policies.

Income tax benefits

Payment made for medical insurance can help save tax under Sec 80D of the Income Tax Act. As per section 80D of the Act, a deduction can be claimed by an individual in respect of the medical insurance premium paid up to Rs 15,000 for himself and his spouse and dependent children.

Additionally, s/he can also claim deduction for the medical insurance premium up to Rs 15,000 for his parent(s). Further, the aforesaid deductions are increased up to Rs 20,000 in case the premium is paid for senior citizen (65 years or more). It is, however, important to note that the medical insurance premium should not be paid by cash to avail this tax benefit.

As important as it is to insure one's life to protect your loved ones, it is of equal importance to insure you and your family members from the rising future medical expenses. So whatever might be your earning, status of health, age or level of employment, go get a medical and health insurance plan for you and your family members.