Ask Mint Money | Multiple health plans mean more paperwork if claim amount is high

Ask Mint Money | Multiple health plans mean more paperwork if claim amount is high

I am 47 years old and have two family floater policies. The first cover of 1.5 lakh is for me and my wife and covers all pre-existing diseases, while the other policy also includes my son and gives a 3 lakh cover. I want to top up my existing covers. What is the process and how will it change the covers?

—Vikas Vedak

You can increase the cover for your family in two ways—increase the sum insured of the existing policies or take a top-up cover. It is better to increase the sum insured in one of your current policies as it is easier to make a claim through a single policy. Currently, you have two policies and these may be getting serviced by separate third-party administrators (TPAs). This means that in case of a high-value claim, you may have to interact with two agencies and create two sets of documents. If you take a top-up cover, you may end up dealing with three TPAs.

Insurers ask for certain medical tests for persons above the age of 45 years. Any adverse findings in the medical tests are excluded from the enhanced coverage. Standard exclusions will also apply on the enhanced cover. The initial cover remains undisturbed. These conditions will also apply to the top-up cover.

I am planning to buy a car worth 6 lakh. What all should I keep in mind before getting car insurance?

—Chetan Sinha

The terms and condition of a car insurance policy have been standardized by the Insurance Regulatory and Development Authority. This means that all insurers have to offer the same policy. Therefore, the important points to look for are pricing and the cashless service network of the insurer. You should choose an insurer which has a cashless repair arrangement with a garage close to your home and if you travel between cities, in those cities as well.

Some insurers have recently introduced add-on covers that come at extra premium. Most notable among them are zero depreciation cover and return to invoice cover.

While paying compensation for repairs, insurers deduct some amount from the cost of parts that are replaced. This is known as “depreciation". In case of a three-year-old car, this deduction is up to 25% of the parts cost and has to be borne by the car owner. This puts a financial strain on the owner. Zero depreciation cover provides full compensation for parts replaced during repairs following an accident.

In case of theft, insurers pay the sum for which the car is insured. This sum decreases as the car gets older. However, the car owner may like to buy a new car following the theft and will have to pay the difference between the amounts received from the insurer and the cost of the new car. A “return to invoice" cover allows the insurer to pay the invoice of the insured car and considerably reduces the amount that the car owner would need to bear for the new car.

Rahul Aggarwal, director, Optima Insurance Brokers

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