Health insurance plans for family

Totally depends on which family members you are trying to cover and what is your use case.

Here is a good way to go about it.

Who are you buying for?

1. As long as it’s for you, your spouse and let’s say a maximum of 2 kids — and you and your spouse are under 45 — go for a family floater health insurance

2. If you are trying to cover your parents, who could be 60+ — never try and bundle them in the same plan as yours or your nuclear family. Health insurance premiums are calculated as per the age of the eldest member in the family being insured. And premiums go up by almost 100% for someone above 50 compared to someone who is let’s say 35 or 40. Cover parents separately. Better plans suited to slightly older ages make more sense.

What is the amount of coverage you’re looking for?

3. It’s tough to decide what is the ideal amount of coverage you should have.
So here’s what I go by

a. Do I want insurance to cover all possible expenses? Or I can fund something from my savings (self-insurance) or my employer provided insurance can fund some parts.

My recommendation is never to rely on employer insurance — Indian corporates provide extremely low cover. Not more than 2 Lacs on the higher side. Plus you switch jobs, or start a business or whatever. You need health insurance plans you control in any situation.

b. What do medical emergencies cost today and what they might cost in 5 years from now? Here’s a good starting point.

Source: Page on www.bigdecisions.in , powered by Paramount Health care.

Medical inflation in India is approximately 15%. So in 5 years the cost of medical procedures and treatments roughly doubles. You need your health insurance to at least be adequate for the next 5 years — before you can increase your cover. So irrespective what your age is and what you can fund, a thumb rule looking at the table above is to get about 5 Lacs from a next 5 years perspective.

What to look for in a Health Insurance Plan?
4. Room Rent Limit — This factor causes the maximum heartache for all people who buy health insurance.

Funnily, hospitals charge by package rates. This means that the same treatment /surgery by the same doctor in the same hospital can cost up to 40-50% more depending whether you chose a shared room, a private room or a maybe a room with velvet sheets.

Health insurance plans have limits on room rent to avoid paying ‘luxury bills’.
So though your cover might be INR 5 Lacs and your treatment let’s say costed you INR 3 lacs — you would assume insurance would pay for it. It would if the room you chose was within the entitlement .

For eg.- If you chose a room which costs INR 6,000/ -per day and your plan limit was let’s say INR 4,000 / — you don’t just pay the difference of Rs.2,000/ per day — you pay the entire differential as the treatment would’ve costed Rs. 2,00,000 /- if you chose the lower category room. So 1 lac is out of your pocket.

The Solution: Seek out plans which have no limits on room rent. Many are available today — but you need to be careful.

5. Pre-existing diseases — This is the factor which contributes to the maximum number of health insurance claims being rejected.

Plans have standard clauses that any pre-existing ailment (at the time time of buying the plan) will not be covered for the first 2-4 years. So when you claim, the first thing that an insurance company investigates is that is this ailment anywhere linked to something that you already were suffering from and if they find it — Sorry claim denied.

The Solution — This clause you can’t get out of. So the number 1 thing to do is to be aware of this exclusion. Some plans cover pre-existing after 2 years instead of 4 years. Faster pre-existing gets covered, the better it is. There are much lesser chances of your claim being rejected.

6. Claim settlement record — Really don’t go with cheap plans as the criteria.

It’s soul crushing to get stuck with a company, who does not respond sensitively when you need help. Look at 2 ratios — What percentage of claims they reject and how many do they settle within 30 days. You’ll be surprised how some of the companies fall off your consideration list.

There are many other small factors and it’s difficult to get them all right. But if you consider the above, you would’ve made by and large, a good decision. Just to name a few — Apollo Munich Health Insurance, L&T General Insurance and Star Health Insurance have a few good plans.

Please also check out http://www.coverfox.com

We are start-up heavily working on solving the health insurance problem in India, trying to bring out all factors transparently across insurance companies and plans.