Mediclaim: What to look for

My friend has a hefty life insurance cover but no medical insurance.

He recently met with an accident when riding his bike and ended up with multiple fractures. His medical expenses have set him back by more than Rs 1,00,000.

He swears that the first thing he is going to do when he is well is to take a medical insurance cover.

In case you want one too, here are a few things you should look out for.

• How much are you worth?

What you have to pay

The premium is what you pay every year to the insurance company.

The premium rates will vary amongst the insurers and will also depend on your age. The older you are, the more hefty the premium.

For instance, the Mediclaim policy from the General Insurance Corporation has a fixed premium till 35 years and then it changes for 10-year slabs.

Let's say you take a Rs 1,00,000 medical insurance cover.

Age (years)	Annual Premium (Rs)
Till 35	1310
36 – 45	1425
46 – 55	2039
56 – 65	2322
66 – 70	2589
71 – 75	2784
76 – 80	3445

What about the family?

You may get a discount if you take a medical insurance for your family too.

Let's say you take a medical insurance cover for yourself of Rs 1,00,000. Now, if you take one for your wife and child too, of the same amount, you will be paying premiums for all three. In other words, you will be paying the premium of three Rs 1 lakh policies.

Should you fall sick and your hospital bill and medical expenses comes to Rs 1,50,000, since you are only insured for Rs 1,00,000, you will have to put up the balance Rs 50,000.

But, if you opt for a single family cover, then this single insurance policy will cover all three together. So, you will be able to claim the entire Rs 1,50,000 out of the total Rs 3,00,000 coverage.

In other words, one individual can use the entire Rs 3,00,000 or it can be split amongst all of them.

• Is there a tax benefit on medical expenses?

What's excluded?

Any disease or sickness existing before you took the policy will not be available for coverage.

Also check what other ailments are excluded.

For instance, some insurers will not cover obesity related illnesses, expenses arising from HIV or AIDS or the use of alcohol or drugs and expenses due to attempted suicide.

Expenses arising for treatment due to war, riots or a terrorist attack are not insured by some.

Why dates and days matter

Certain ailments like ulcers, cataract or sinusitis may not be covered in the first one or two years of the policy.

Or, in the first month or so, only accidents will be covered.

Also, the policy will cover pre and post-hospitalisation expenses. In this case, you need to check how many days is pre and post.

Generally, medical expenses incurred 60 days prior to and 90 days after hospitalisation fall under this.

• Getting married? Get insured!

Check the cashless benefit

The insurance company will have a tie-up with a fixed number of hospitals across the country. If you check into any one of this network, you will be able to avail of this facility.

All you have to do is use your health identity card (which you get when you take a policy) at the hospital and the insurance company will directly pay the hospital.

If you check in at a hospital that does not offer this facility, then please collect all the bills to be produced later.

Like some cash every day?

The insurance company will give you a cash allowance for the days spent in hospital. Of course, you will have to pay an additional premium to avail of this.

The premium will depend on your age and the amount of cash you would want per day.

So let's say you are 28 years old and you want a cash allowance of Rs 1,000 per day should you be hospitalised.

Then for a 30-day cover (30 days at hospital) you will have to pay an annual premium of around Rs 600.

So during the year, a total of 30 days will be covered under this insurance scheme.

What about disability?

Look for disability compensation (partial and total).

Some offer a bonus for children's education if your earning capacity has been decreased due to death or disability.

Age matters

Children can be covered from a few months old.

But, generally, children who are less than five years of age will need one or both parents simultaneously covered.

If you are looking at insurance for your parents, then check the maximum age for entry. It could stop as early as 55 in some cases.

But even if the entry age is 55, the insurance cover will stop only much later.

Generally, the insurance is only applicable till one is 70, 75 or 80. Till then, you pay premiums and if you fall sick, you get covered.

If you fall sick after that, it is your lookout. Just when you really need the cover, it runs out on you.

But all hope is not lost. Some companies offer to cover you after that at a special fee.

So, if you still want the cover at that age, post 80, then you will have to pay a loading (a surcharge or extra fee). It will be a percentage hike over and above the premium. So you may have to pay a 10% loading over the premium for the policy to continue.

• Medical reimbursement and allowance

All said and done, medical expenses are steep and they could wipe out your savings. It is wise to take a medical insurance cover.