The health insurance industry has seen a major transformation over the last one year. The global health pandemic has not only increased awareness among the people about the importance of having a health insurance policy, but that awareness has also translated into a surge in the number of lives insured and premiums collected. As per the available data, over 30 crore people bought health insurance plans last year in just six months between April and September.
Of course, the primary reason that drove people to sign up for a health cover was the risk associated with COVID-19, one of the most infectious viruses in recent history. Moreover, the cost of hospitalisation due to COVID infection is also quite high, a major factor that weighed on the minds of people when they bought the health insurance plan for themselves and their families. However, the panic situation which was created last year due to the pandemic also led many people to rush into buying their policies without going into the minute details of the plans that they bought. This was fair to a certain extent as the priority at the time was to buy coverage as soon as possible.
Now, over a year into the pandemic, most of those policies would be up for renewal. And this comes at a time when the second wave of Coronavirus, in a much stronger avatar, has hit the country. It would be a good idea at this time to review your policy to determine if you are getting the best coverage that you deserve.
The first and foremost factor you must review is the sum insured that you get under your policy. With rising costs of medical care, and a health crisis which has the potential to put multiple family members into the hospital simultaneously, a sum insured of Rs 7-10 lakh may not be enough. In fact, this realisation has already made a large section of policyholders to port their policies to higher sum insured ones. As per the available data, this has led to an increase in the overall sum insured by almost 100 percent from around Rs 11.4 lakh in FY20 to over Rs 22 lakh in FY21. There has been a massive growth of around 150 per cent in the number of requests for porting the already existing plans to ones with higher cover. Policyholders are moving from a sum insured of Rs 3-5 lakh to those with a higher sum insured of Rs 25 lakh, and even up to Rs 1 crore.
Another important factor that you must review while renewing your policy is if there is any clause of sub-limits or co-payments. A lot of insurance companies impose certain restrictions to offer insurance at cheaper rates. A sub-limit clause in a health insurance policy caps certain benefits up to a limit. For instance, there may be a sub-limit of one per cent of the sum insured on room rent in case of hospitalisation. In such a case, even if you have a sum insured of Rs 10 lakh, you can only claim a maximum of Rs 10,000 towards the rent of room in the hospital. The presence of such a clause is another reason for you to consider moving to a higher sum insured policy, which comes with no such sub-limits. So not only you can go for the more expensive private room, you can even opt for the suite as the cost would be covered up to the sum insured.
Similarly, the co-payment clause also puts restrictions on the claim you make as it makes it mandatory for you to pay a portion of the claim amount. Normally, this clause is used by insurers to bring down the premium but while making the claim, you may have to give a major chunk of money from your own pocket. Many higher sum insured policies now come with no such clause. Moreover, many insurers offer such policies at very affordable premiums. In fact, there are also some schemes that offer Rs 1 crore cover at the same price as a Rs 10 lakh cover. So there is no reason for you to compromise with the benefits to save a little money.
One must also remember that the rising medical care costs are not just restricted to the COVID-19 virus, but it is witnessed across the healthcare sector. So a higher sum insured plan would not only protect you this year, it would protect you throughout your life. And the best news is that when you port your policy to a higher sum insured one, you retain all the benefits that you have accrued over the year, including the waiting period you served on the pre-existing conditions. What this means is that if the policy came with a waiting period of two years on a pre-existing ailment, you do not need to wait another two years if you port the policy as the benefits would start just after one year. In fact, many policies these days come with zero waiting period. So while renewing your policy, you could switch to a policy that protects you from day one.
With the second wave of the pandemic gaining strength in India with the number of daily cases crossing the three lakh mark in April, going for a higher health insurance cover may be the wisest decision you make. With hospitals in several cities running on capacity, the cost of medical care should be the last thing on your mind.