Personal Finance: Claims That Take Your Life

PERSONAL FINANCE: MEDICAL INSURANCE
Claims That Take Your Life

Spiralling cost of treatment has made medical insurance a must. But to snatch its full benefits, it's important to read the fine print.

By Vinod Mahanta

Those who aren't particularly rich-most people in the great bell curve that is the Indian population spread fit the bill-and have had the misfortune of falling ill (even the fittest do occasionally), will be aware of the first axiom of indisposition: if the cure doesn't kill you, the cost of the cure will. And there's no telling when the cheque-book will have to be pulled out; ill-health doesn't work to a schedule. That's right gentle reader, medical insurance is what this composition is about: if you have a policy, move on. If you don't, ask your secretary (or your spouse) to hold all calls and go through this beginner's guide to medical insurance.

First, a definition for people who find the concept of medical insurance alien. Put simply, like other forms of insurance, it is a sort of a bet. The person taking out the policy bets that he'll fall prey to some unspeakable disease and waste away. The firm issuing the policy bets he won't. As long as he doesn't, he pays an annual premium. If he does, the firm pays him an amount far in excess. Thus, an annual premium of Rs 1,480 is all it costs to take out a medical insurance policy for Rs 1 lakh (See Schemes And Their Schemings).

Fine, you're sold on the concept. Now for the companies that issue the policies. At the time this article went to press, medical insurance in India was the exclusive domain of GIC, and its four subsidiaries-New India Insurance, Oriental Insurance, United India Insurance, and National Insurance. Predictably, all of them have the same schemes on offer. The rash of transnationals entering the just-opened sector may change that. Still, it is unlikely that the fundamental characteristics will change: unlike life insurance, it won't fetch returns in the form of bonus payments and 'maturity value'. What it will do is take care of all the medical expenditure (if it needs to be taken care of). Says S. Padmavati, 70, President, All India Heart Foundation: ''In the coming years, health-care costs will rise dramatically, and medical insurance will be the way out for the majority of people.''

Smart Medical Insurance

As anyone who's read (Grisham's good in print) or seen (Damon is great on screen) the Rainmaker will tell you, no insurance company likes paying out money. Thus, if you decide on a medical insurance policy, read the fine print carefully. Most forms have enough whereases and insomuches to befuddle the most legal-minded of individuals. Caveat: small oversights could rob you of your claim. For instance, under Mediclaim-the brand name under which the GIC subsidiaries market their medical insurance policies-a claim is payable only if the policy-holder has been treated in a registered hospital or nursing home with 15 in-patient beds, qualified 24x7 nursing staff, qualified doctors, and a fully-equipped operation theatre. Remember that Mediclaim is valid only in India; international travelers need Mediclaim Overseas.

The Options

Variety isn't totally absent from the medical insurance scene. New India has schemes targeting tertiary care (it covers only major illnesses), long-term hospitalisation, and long-term retirement medical benefit. LIC's Asha and Ashadeep II schemes offer a cover against some diseases. And under the corporation's Jeevan Asha scheme, a policy-holder becomes eligible for 3 per cent of the insured amount every alternate year after the third year, for a health check-up, and the entire sum (including add-ons like the guarantee amount and loyalty benefits) in case he or she has to undergo surgery that costs more than the assured amount. If the cost of the surgery is less than the assured amount, the policy-holder can avail it in its entirety, but the value of the policy decreases by that quantum. Credit card holders would do well to check out special deals. Citibank, for instance, has an arrangement with New India Assurance, wherein card-holders can avail a 58 per cent discount on the premium on the Good Health Personal Accident Insurance scheme, and 50 per cent on the Good Health Mediclaim Insurance Plan.

Accident insurance is a great idea if you are prone to accidents or drive a vehicle in Delhi. The Personal Accident Insurance scheme mentioned above covers death and disablement from accidental injury anywhere in the world. What's more, depending on the exact terms of the policy, it provides for the education for up to two children of the policy-holder (if he dies or is permanently disabled).

The Limitations

A quick glance at the details of any medical insurance policy will tell you this: the list of things that aren't covered under the policy far exceeds that of those that are. Insurance companies won't pay for sessions with the shrink. Nor will they pay for the treatment of diseases like asthma, bronchitis, chronic nephritis, diarrhoea, diabetes, epilepsy, influenza, tonsillitis, arthritis, gout, and rheumatism. Explains Yogi Mehrotra, 67, Vice-President, Apollo Hospitals: ''There are lots of ifs and buts built into the medical insurance schemes, but some of the restrictions like pre-existing disease can be a matter of opinion, and could well differ from expert to expert.''

It may also be a good idea to follow the instructions of the insurance company to the T: the preliminary notice with the number of the policy, the name of the insured, the nature of the illness, and the name of the hospital have to be filed with the company within seven days of the insured being admitted to the hospital; and the claim form with all receipts, within 30 days of the discharge of the insured. Tip: do not try to doctor bills. With insurance companies starting off by assuming every claim to be a suspect one, it will only make matters worse.

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