Health Insurance Archives - CAGRfunds

November 30, 2018

Do health insurance plans cover maternity expenses?

“Maternity Plans” are not really separate plans. It is a feature which may be covered under normal health plans. However, only a few health plans offer maternity cover as part of their normal health plans.

Key features of maternity cover are as follows:

There is usually a separate waiting period for maternity coverage – This means that any claims with respect to maternity will be catered to only after the maternity specific waiting period is over
Almost all plans have an upper cap on the amount of expenses that will be covered – Usually the coverage ranges from INR 25000 – 50000 per delivery. The reason most policies have an upper cap is because the number of claims for maternity is likely to be very high. The purpose of Health Insurance is to protect you from any sudden outflow of funds due to a medical emergency. The occurrence of maternity is almost certain and hence a limit on the same is warranted
Pre – maternity costs are generally not covered – Most plans which offer maternity coverage generally do not cover any expenses that are incurred towards consultancies and tests
New born coverage – Generally, the new born baby is covered till the end of policy year

Should you buy a health plan only because it provides maternity coverage?

Maternity should ideally be treated as a bonus option. The overall decision behind buying a health plan should ideally be the key features which are relevant for any kind of hospitalization. Imagine a plan providing good maternity coverage but having a claim settlement ratio of 70%. Therefore, choosing a plan just because it provides maternity coverage may not be the best decision to take.

However, in case you have a choice between two equally good plans with one of them providing maternity coverage with or without some extra premium, then it might make sense to take the plan with the maternity clause. Especially, if you are planning a kid in next few years.

Want to discuss more on maternity plans? Write to us on contact@cagrfunds.com.

Have you read about our Cancer Plans?

November 30, 2018November 30, 2018

Everything about Top Up Health Insurance Plans

What are Top Up Plans?

Also known as Deductible Plans, Top Up Health Plans provide a cover over and above a certain base cover. This base cover in most cases come from existing policies. Some Top Up Plans allow deductible options even without an existing insurance policy.

In cases where there is an existing insurance policy, reimbursement against any claim that arises will first be made out of the existing policy. The liability of the Top Up Plan arises only after the set threshold of the existing plan has been exhausted.

In cases where there is no existing policy and the Top Up Plan permits such a situation, expenses up to the threshold level has to be borne by the insured out of his or her own pocket. The liability of the Top – Up Plan arises only after the set threshold has been exhausted.

Example 1:

Ajay has a health insurance cover from his employer of 8 lacs. He purchases a top up plan for 10 lacs with a deductible of 3 lacs. An unfortunate event of hospitalization generates a claim of 9 lacs. Ajay can use either of the following options:

Option 1: Raise a claim of 8 lacs against the employer health plan and balance 1 lac against the top up plan

Option 2: Raise a claim of 3 lacs against the employer health plan and balance 6 lacs against the top up plan

So basically, the top up plan gets activated only when the deductible threshold is crossed.

Example 2:

Vijay does not have any existing health plan except a top up cover of 10 lacs with a deductible of 1 lac. He gets hospitalized and has to raise a claim of 3 lacs. In this case, Ajay will have to pay the initial 1 lacs from his own pocket and the Top – Up Plan will consider only balance amount of 2 lacs for claim settlement.

Why are Top Up plans useful?

These plans are useful for two simple reasons:

A high coverage is available at a significantly low premium
In an event of a medical emergency where the amount of expenses tend to spiral beyond the usual ranges, these plans come to rescue

Who should buy Top Up Plans?

Salaried people who have a basic corporate cover – Smaller hospitalization claims can be covered by the corporate cover and in case of larger expenses, Top Up Plans can be utilized. This also means that post retirement, claims up to the deductible amount will have to be either self – funded or funded through a Base Insurance Plan. However, since deductibles are pre-decided, the same can be set aside as an emergency fund.
Salaried people who plan to change jobs or start on their own – Top Up Plans are an excellent option in this case. The cover and the low cost premium continues irrespective of whether you are salaried or get into entrepreneurship.
People who have sufficient resources for covering up small ticket emergencies – These people can leverage the low premium Top Up Plans to cover themselves for any eventualities
People who have a Base Insurance Plan with a basic cover amount of 5-10 lacs – In cases of severe medical emergencies such as complicated surgeries, the amount of expense usually shoots beyond the normal cover that we usually have. Especially if the treatment is being carried out in one of the plush city hospitals! A Top Up Plan is the umbrella for such unannounced rainy days.

Which are the best Top Up Plans?

Most Insurance Companies now offer top Up Plans. However, one has to select the plan which has the most suitable features and has a low premium. Email us on contact@cagrfunds.com to ask us for the best Top Up Plans.

Why should people with Corporate Insurance cover still have a separate health plan?

August 28, 2018

Company health insurance or Separate health insurance?

“At CAGRfunds, we do a weekly session of knowledge sharing within the team. Last week, we had a rather long discussion on whether a separate health cover is required if the employee is covered by his or her company health insurance (Mediclaim) policy.

So we started digging into the various critical reasons as to why we need health cover at all. We realized that depending solely on the health insurance provided by our companies can land us up in the following situations:

Corporate Health Insurance coverage is the same for all

The employer decides our coverage amount. So, if your coverage amount is 5 lacs and your hospital bills amount to 7 lacs, the balance comes out of your pocket. Therefore, you need to ascertain the adequacy of the coverage as per your own health conditions.

You may not be rewarded for being healthy

Most companies (especially the small and midsized ones) deduct insurance premiums from our salaries. For people having the same coverage amount, the premium is also the same year on year, irrespective of how healthy or unhealthy an individual might be. So, if you are a healthy non-smoker individual, you are perhaps paying the same premium as your colleague who is slightly unhealthier than you are.

Also, in an individual health insurance, a lot of policies give either “no claim bonuses” or discounts on subsequent premiums for claim free years. That means you have more security and you save more money if you take care of your health.

You do not have the flexibility to prioritize the features you want

Corporate Insurance is a general insurance that covers a group of employees. So, the features are generic and may not be completely in sync with what you prefer. For example, if there is a history of cancer or diabetes in your family (which puts you at risk for the same), there is a chance your corporate insurance will not cover it. Or, your corporate insurance may be capping your room rent to a small % of sum insured which is unlikely to cover even half of your actual room rent.

You will have zero health cover just when you need it the most

Corporate Insurance will only cover you till you are employed with the company. So, if you are currently depending on your corporate health cover, you will have none on retirement. If at that point in time, you decide to take a private health cover, it will cost you significantly higher than what it would cost if you take a policy when you are young.

You might face several issues on changing your employer

Drop in coverage amount

Your new employer may offer you a lower coverage than your previous employer. You might want to go for a separate health cover when that happens, but do take into consideration the increased premium that you will have to take at a higher age. Also, every new policy has a waiting period for pre-existing diseases. This means that the Insurance service provider will not sanction any claim arising out of any pre-existing disease during the tenure of the waiting period. In most cases, this period ranges between 2-4 years. The older you are, the longer it is.

Lesser Dependents

Many companies today offer health insurance for not only you but also your spouse, children, parents and (occasionally) your in-laws. But, not all companies offer the same protection. If you change your company, your new employer may only support you, your spouse and your children. Having your dependants not covered in future can lead to a considerable risk of an unforeseen medical expense.

But, what should you do if your corporate health cover seems to be adequate?

Well, it is certainly possible that your company adequately covers you and your family and also provides you with the features that you prefer to have. You can choose to adopt any of the following routes:

Secure your cover for post-retirement: You can take a small cover separately so that you do not have to shell out a huge premium for taking a new policy post-retirement. A new policy at retirement will also subject you to the long waiting periods for pre-existing diseases which of course defeat the purpose of the policy at that age.
Secure the possibility of a massive medical emergency: Corporate covers are at best, generally adequate for normal medical situations. In case of a massive unforeseen emergency, the chances of incurring a huge expense are quite likely. Therefore, you might want to secure that eventuality and take a large health cover separately to take care of the same.

Want to know more about health insurance? Contact us on +91 97693 56440 to know more about the suitable plan for you.