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Focus on essential features when choosing a health insurance, says Vivek Chaturvedi
Choose a health insurer that has a good claim settlement ratio, low consumer complaints, and good customer ratings online.
A health insurance plan comes with various features, some of which might sound appealing but shouldn’t form the base of decision-making. When opting for a health plan, ensure it has the essential basic features instead of focusing on fancy frills, says Vivek Chaturvedi, CMO and Head of Direct Sales, Digit General Insurance.
In an interview with MintGenie, Chaturvedi said that any form of cancer treatment can be expensive and can deplete one’s savings significantly. India every year sees close to 10 lakh cancer deaths.
Edited Excerpts:
Your health insurance policy should be determined by your family’s needs. How do you go about deciding the right health plan for your family?
Getting a health insurance plan that can sufficiently cover any type of medical expenses is important. With rising medical inflation and healthcare costs, one should consider a family floater plan with a minimum sum insured of ₹20-25 lakh. This would ensure any major ailments or hospitalization expenses are adequately taken care of. The medical inflation in India is 12-14%, which effectively makes the value of your sum insured into half every 5-6 years. Health insurance is a long-term product; hence, one should choose an adequate sum insured that can last someone for the next 30-35 years.
If the premium of a higher sum insured appears to be costly, one can choose a fixed deductible of ₹5,000-10,000 to reduce the premium and make it affordable. However, opting for an adequate sum insured is only the first step in choosing the right health insurance. A health insurance plan comes with various features, some of which might sound appealing but shouldn’t form the base of decision-making. When opting for a health plan, ensure it has the essential basic features instead of focusing on fancy frills.
The crucial benefits you should check in your health plan include:
- Make sure your plan does not have any limit on the choice of room or ICU you pick, also known as room rent capping.
- Check if your policy offers any sum insured backup, also known as reinstatement benefit. This makes sure your sum insured gets reinstated for the remaining year in case the same is utilized by a family member.
- Check the cumulative bonus your plan is offering in case you do not make a claim. This is another way of increasing your sum insured over time and ideally, a plan offering up to 100% cumulative bonus should be picked.
- Make sure your policy does not impose any type of co-payment for any type of hospitalization or surgery.
- Check whether your plan has a consumables cover. When you get hospitalized, there are few expenses like surgical items, syringes, masks, gloves, etc., which are categorized as consumables and typically not covered under a health plan. As these can usually form 10-15% of your total bill, you should make sure this is covered by the insurer.
- Before you get hospitalized or after you are discharged, there are expenses like diagnostic tests, doctor’s fees, medical check-ups, etc. that you might have to incur. Hence, a pre-and post-hospitalization benefit of at least 60/90 days should be considered.
- Coverage of organ donor expenses: While it is a low probability event, any organ transplant is an expensive affair. This ensures such costs are covered by the insurer.
Apart from that, choose a health insurer that has a good settlement ratio, has low consumer complaints, and good customer ratings online. This would ensure you can opt for a good health plan for your family.
Cervical cancer is becoming increasingly common among women. How does having proper insurance coverage play a crucial role in women’s treatment and recovery?
When it comes to cervical cancer, insurance plays a pivotal role in ensuring any treatment undertaken is covered through your health plan. Any form of cancer treatment can be expensive and can deplete one’s savings significantly. India every year sees close to 10 lakh cancer deaths.
According to research, cervical cancer contributes to approximately 6–29% of all cancers in Indian women. The average cancer treatment cost in India is around ₹5 lakh and this can even go up to ₹25-30 lakh or more depending on the severity. There are various treatments one may have to undergo to treat cancer. This may range from surgery, transplant, stem cell or hormone therapy to chemotherapy, among others. These treatments are usually expensive and can significantly impact your finances.
A health insurance plan can ensure many of these expenses are covered by the insurer. Before opting for a policy, one should check the critical illness waiting period and also understand the exclusions and limitations of the policy, if any.
While choosing a health insurance plan, what addons can be beneficial for cervical cancer cover insurance?
The cost of any kind of cancer treatment can be expensive and this tends to be the case for any critical illness. It is for this reason that taking health insurance coverage with a high sum insured is advised. This ensures that any type of medical expense can be covered with ease, and one doesn’t need to worry about taking multiple add-on covers to adequately protect oneself. From an add-on point of view, one can consider taking consumables covered under the policy as the same typically accounts for 10-15% of the hospitalization bill.
The government is in the process of concluding a plan to increase the insurance coverage under the prominent Ayushman Bharat health scheme to ₹10 lakh. This enhancement aims to provide adequate support for major illnesses such as cancer and organ transplants, which involve higher expenses. What is your take on the same?
The decision to increase the coverage under Ayushman Bharat from ₹5 lakh to ₹10 lakh can significantly ensure the healthcare needs of the poor and lower-middle-income Indians are met appropriately. The scheme is estimated to cover over 10 crore poor and vulnerable families. Taking into account the rising medical inflation and healthcare costs, coverage of ₹10 lakh will ensure any severe medical expenses are taken care of. Many Indians from the lower strata of society still resort to borrowing or selling their assets to meet their healthcare needs, pushing many below the poverty line. Good healthcare coverage will ensure they can seek medical treatments without worrying about any financial hassles. Many Indians today opt for health coverage of ₹3-5 lakh. Increasing the Ayushman Bharat coverage cap could also have a positive impact on them and may likely influence many to relook at their health coverage, nudging them to seek health coverage with a higher sum insured.
The insurance penetration in India is still low. What major challenges disallow more people from buying health insurance?
The lack of awareness and understanding about the important benefits of a health insurance product is one of the major factors that dissuade many from opting for health insurance coverage. Paying health insurance premiums is still considered an expense instead of an investment. Apart from that, we also tend to be victims of optimism bias. The tendency to mistakenly believe that anything negative is unlikely to happen to us also dissuades many from seeking health insurance coverage. According to government data, 83.7% of Indians still dip into their household income or savings to meet hospitalization expenses, while over 12% rely on borrowing or help from family and friends.
However, many steps have been taken by the government to improve health insurance penetration. The launch of Ayushman Bharat is one of the prime examples, where an estimate of over 50 crore Indians are covered. While coverage is now available for lower strata of society and the affluent class can afford to pay for any healthcare expenses from their pocket without much financial impact, what we need to focus on now is the “missing middle” many of whom still don’t have any health insurance cover. Merely having a health insurance plan is not enough. One needs to also ensure they are not underinsured and are covered adequately to meet the rising healthcare costs.
What are your expectations regarding tax deductions on health insurance premiums from the forthcoming interim budget?
Having health insurance is extremely important, yet the insurance penetration in India remains to be low. To encourage more people to opt for health coverage, an increase in the Section 80D limit for health insurance can be considered. Moreover, the government could look at tax exemptions for first-time health insurance buyers. An exemption under Chapter VIA for such first-time insurance buyers of up to 200% of the premium paid could be considered, which can then be subsequently reduced to the threshold under Section 80D in a phased manner over a 3-4-year period. Out-patient treatments still account for 60% of the healthcare spending in India. To encourage insurers to come up with more OPD-specific covers, a lower GST rate could also be considered. The insurance regulator has envisaged the target of “Insurance for All by 2047”. Positive measures taken by the government towards improving insurance penetration and achieving this mission will benefit the insurance industry.
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First Published:30 Jan 2024, 09:10 AM IST
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