Buy Medical Insurance wisely (my personal experience)

Life has this amazing knack of playing roulette with you!

I had planned to write about my experiences with medical insurance on the first Sunday of this month, and a medical emergency on that Saturday itself took the entire weekend. And this Sunday was dominated by work.

Anyway, here goes. 6 points based on my experience of what to do – and what not to do – while buying medical insurance.

Buy what you need – not what saves you tax: We have this amazing thing in India of Rs.15,000 tax saving under section 80D (we all seem to remember this section, as we save the entire amount on tax). Hence, we all end up investing only this amount on Mediclaim. I did the same. But maybe it is not enough for some families. What if there are 3 children and aged parents to take care of? What if there is a medical history in the family that necessitates preparation through proper medical insurance planning? There are many possibilities. Always take into account all these factors while deciding how much to invest. Rs.15,000 should be the minimum, and not the only number. My own experience – my old policies had lapsed and I had to take a new policy in 2007. I realised that I would have to shell out a huge premium for my parent’s insurance, as they are both above 60, hence in consultation with them, we decided not to take insurance for them.

Over the next two years, both of them required treatment, and we had to shell out of our own pockets!

Do not let your policies lapse: The second lesson I learnt. I had mediclaim till 2004, which we allowed to lapse when I went abroad. It would have cost next to nothing to keep it alive, but I allowed it to lapse. Result – when I came back and invested once again, I had to pay higher premia as we had moved into different age brackets, and we also lost all no-claim benefits.

Buy a floating cover, it is worth the extra premium: The harshest lesson I learnt over the past one year. I have insurance for myself, my wife and both the children. On seeing the difference in premium, I decided to go in for separate policy amounts for each individual, insuring myself for the highest sum, followed by my wife, and then smaller amounts for the children. My daughter and I both needed hospitalisation this year. And while the amount for me was well within my insurance limits, the amount spent on my daughter’s treatment extended well beyond. This naturally took a huge chunk out of my savings. The funny part is – the total amount for both our treatments combined is less than 2/3rds of the total insured value for both of us. In other words, had I taken a floating cover, I would not have spent a rupee (apart from the minor amounts that insurance companies or their TPAs love to deduct).

Find out what insurance companies have tie-ups with good hospitals near your home: And go with only those companies which do. It is a simple but oft overlooked fact, but think about it. Where do we rush to in an emergency? The best hospital nearest to our house. And if at that time we have to also run around for money? It can get extremely harrowing. Believe me; we have been through it in the past year! Remember, it is not only for ourselves but also for our family members, who spend the best part of their day near home itself.

Find out who offers cashless treatment at a good hospital near your home: It follows from the previous point. You may get insurance, and everything may be in order, but if the hospital and the insurance agency do not have an agreement for cashless treatment, you could run around like a dog chasing its tail!

I had my accident on Sunday afternoon. Unfortunately, the hospital and my insurance company did not have a tie-up for cashless, and the hospital rules wanted us to pay Rs.1.4 lakhs for me to be operated upon immediately. And with my left hand broken (for those unaware, I am left-handed), I could not even sign a cheque. Even if I could, what use would it have been on a Sunday? It was only the emergency and possibly our family friend’s (who is a doctor known to the surgeon) discussion that made the hospital accept that they would do the surgery and we could make the payment the next day.

Everyone would not be as lucky!

Also, for me, claiming the money from the TPA was like getting money from a Jew! Have you heard of the saying “A fool can ask more questions than the wisest man can answer”. I am sure the person who coined this saying must have had to answer a doctor in an insurance company!

And the number of times they made me run around, I could qualify for the Olympics! They are expected to complete one process in 45 days, but you ask them about the claim on the 46^th day, and then they will start sending queries. The way the lady at the TPA counter acted aghast when I asked her how come their letters don’t reach our house when every other letter does, had to be seen to be believed. I get a strong feeling they do this only to delay payments.

I nearly gave up on one claim because I realised that I may end up spending more than 20% on taxi fare going back and forth, in addition to the huge waste of time! And when I stopped responding, they sent the cheque home – one year later!

I learnt the advantage of cashless a while earlier when my brother had to be rushed to hospital at midnight, and everything was taken care of like clockwork.

Do not trust your insurance agent: Sound a bit harsh, but it is true. Remember, he is doing a job, which is to sell you a medical policy. He may end up saying yes to everything you say, with just the right pauses and intonations to drive you towards where he gets more commission.

Decide your requirements, read the fine print and make your own decision.

After all, it’s your life – and your family’s.