What should one look out for?

Critical among such plans is the extent of coverage prior to as well as post hospitalisation. Companies such as Royal Sundaram, ICICI Lombard and National Insurance Company provide coverage for medical charges for 30 days prior to hospitalisation and 60 days after it.

Companies such as Bajaj Allianz and Cholamandalam General Insurance provide an extended cover both prior to as well as post hospitalisation, which is 60 days and 90 days respectively.

If the insuree needs to be hospitalised because of an emergency, the cover provided prior to getting admitted into a hospital does not assume too much relevance. However, in such cases, the longer the extent of coverage available after being discharged from hospital, the more beneficial it will be to the insuree.

How does the scheme work?

Such schemes are normally handled by third party administrators (TPAs). They, in turn, have a network of hospitals across the country at which health insurance customers could get cashless service.

On admission into a hospital that is part of the TPA network, the TPA directly settles the expenses incurred at the hospital and the customer is not required to fork out any cash. Hence, the term cashless service.

However, one is required to seek authorisation from the TPA prior to hospitalisation to obtain the cashless facility. In the case of admission into a hospital that is outside the network, the expenses have to be settled by the customer.

He will then have to produce the relevant documents to the health insurance company and claim a reimbursement.

The fine print

As is the case with such plans, what is excluded from the scope of coverage has as much importance as what is included in the scope of coverage.

Bonuses

For every year that a claim has not been lodged with the insurance company, they will provide for a percentage increase of the insured sum (5 per cent, in most cases) subject to a maximum to 50 per cent of the sum insured, for a payment of the same premium. Should a claim arise after the customer has benefited from the bonuses, the bonus amount will then be scaled down by an extent determined by the company. However, the basic sum insured will remain unaltered.

Add-ons

Much like riders in the case of a life insurance policy, do check to see if for the payment of an additional premium you can get additional services, such as a general health check up or a daily hospital allowance or an ambulance pick up.

The premium outflow will be a small percentage of what is to be paid for the basic plan, but such services can prove to be handy.

How to choose

The premium to be paid for a given amount of cover will be an important component in the purchase decision. However, one also needs to bear in mind that there will be other factors, such as the duration of expenses cover prior to and post-hospitalisation, the number of hospitals that come under the network of the TPAs, the add-ons that can be tagged on to the basic policy and more important, the long list of exclusions that such policies have.

The importance of familiarising oneself with the fine print cannot be emphasised enough.

Hence, it might not be a straight case of comparing premiums to be paid, as is the norm with pure term assurance plans.

An approach that looks at both the premiums to be paid as well as the benefits of the various features offered to the individual appears to be a more appropriate strategy to zone in on a plan of one's choice.

The effort will certainly be worth it.

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