Selecting the right health insurance plan
Health insurance plans are typically annual contracts that you renew every year
How do you buy a health insurance plan? If you just settle with the plan your agent sells or are happy knowing you have bought the cheapest plan, there is a bit of unlearning and a lot of learning in store for you. A health insurance policy packs in several features and caveats that you must understand to be able to compare and choose a policy that suits you the best. To help you understand the important features of a health insurance plan and give you a ready comparison, we designed Mint Mediclaim Ratings (MMR), which was developed by SecureNow Insurance Broker Pvt. Ltd. The full ratings along with the methodology can be seen here: https://www.livemint.com/mintmediratings.
In the ratings, for family floater plans, we have considered two sum insured amounts ( ₹ 10 lakh and ₹ 20 lakh) and three age categories in each—where the eldest insured member is 35, 45 or 65 years old. For individual plans, the age categories are the same but the sum assured is ₹ 5 lakh.
In this section, we pick a few plans from a particular age group of one category of sum insured, and give you the details of the ratings of each. This week, we have policies for the age group of 65 years. Only two adults are covered (in the other age categories, two adults and two children are covered).
Every week we also pick one parameter of the rating and explain its importance. This week, let’s look at no-claim bonus.
Health insurance plans are typically annual contracts that you renew every year. Each year you can make a claim on your policy up till the sum insured. Of course, the insurer would prefer if you didn’t make a claim and, therefore, would reward a no-claim year, usually by increasing your sum insured at no cost to you. Keep in mind, however, that an increase in sum insured does not alter any other feature of the policy. So, if there is co-pay or sub-limits in the policy, the same would apply even on the increased sum insured.
Insurers typically increase the sum insured by 5% every year, up to a maximum of 50%. But if you make a claim, your insurer could decrease the extra sum insured; the base sum insured is not reduced. No claims bonus is nice to have as it could also serve as a cushion against inflation. But given that medical inflation is over 10%, an increase of 5% may not be sufficient. In MMR, no-claim bonus has been assigned a weightage of 5%.
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