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The second wave of the Covid-19 pandemic is sweeping across our country. Everyday we hear about lives being lost due to shortage of oxygen or ventilator or even the medicines specifically required to treat covid positive patients.

We also hear about young lives, the bread earners of the family, losing the battle against this dreaded disease leaving behind trails of misery for their loved ones. Behind all these miseries the single most significant reason is lack of preparedness on the part of not only the state but also individuals.

Even though instruments are available in the market to safeguard one’s financial interest in such devastating situations, people hardly bother to ever consider such products or options. The pandemic has taught a lesson that adequate insurance protection for both life and health of individuals is the most significant of the protections that one needs to provide for against the worst of the scenarios. Therefore insurance is often considered a necessity next only to bread, clothes and shelter.

Need for Health Insurance
Everyone desires the best health care but such care doesn’t come free. A health insurance policy comes handy in difficult situations when an emergency demands immediate hospitalisation. A mediclaim policy can take care of most of the expenses depending upon the terms and conditions of the policy. Most insurers have tie-ups with hospitals and in such a situation the patient is not required to pay any amount except for a small amount as security deposit.

The insuring public must know that policies offered in the market come with several limitations in fine print. Generally, the insurers take risk after 30 days of commencement date, they exclude cover to pre-existing disease for couple of years at the beginning of the contract and they put a condition that in respect of every claim the policyholder must himself pay to the hospital up to a certain percentage of the total allowable expenses.

Policyholders Must Keep in Mind such Conditions
Every family must go for a health policy during and after the Covid pandemic and this must become a permanent habit. The policyholders should also take care to keep other family members aware about the policy purchased, its benefits and the place where the document is stored.

Need for Life Insurance
On the other hand, a life insurance policy must be purchased well in time and one must pay premium when due. Besides, the policyholder must develop the habit of reviewing his existing insurance portfolio from time to time and not hesitate to extend risk cover through new policies or through riders. Initially the focus must be on maximum risk cover at minimum cost. Savings through life insurance is a secondary issue. One must also take care to ensure that nomination under each policy is updated and if a policy is assigned for loan, etc., such information must be available with the family.

Claims from Insurers
Filing a health insurance claim begins with the immediate intimation to the insurer’s office about hospitalisation of the insured person. The third-party administrators who are generally represented by an employee at hospitals take over the issue and ensure that the hospital provides services without asking the family members to pay the fees instantly.

Good hospitals have tie-ups with major insurers and ensure smooth settlement of bills through the insurance cover of the patient. Some claimants may, however, face complications but that could be sorted out at the insurer’s office. Nevertheless, health insurance protects them from financial crises. Covid patients are fully covered by any standard health insurance policy. For this pandemic, separate policy is not required.

Death of the policyholder due to Covid is covered under any life insurance policy. The claim settlement procedure for cases where cause of death is Covid is similar to processing of claims arising due to death by natural causes.
Changing lifestyles and genetic factors are making Indians increasingly fall prey to non-communicable critical illnesses (CI) such as cancer, heart stroke, hypertension, diabetes, etc. A basic health insurance policy may not be sufficient to cover all medical costs, especially in case of CI which require long-term treatment, leading to a huge financial burden. This financial burden can be supported by a special financial protection plan called ‘Critical Illness Plan’. You should purchase a critical illness plan along with a health insurance plan. It is advisable to buy a critical illness plan at an early age as health risks are less and so a lower insurance premium. The premiums which are paid for a critical illness plan are allowed as a tax deduction under Section 80D.

Working of critical insurance plan
The working of CI plans is different from other health insurance policies. In CI plans, the full sum insured is paid to the policyholder on diagnosis of critical illness. The sum insured may be utilised for treatment, care cost and even can be used to pay off any debts if taken by the insured. CI plans are also known as defined benefit plans as pay-out is defined and fixed. If an insured holds more than one CI policy from insurers, then all insurers will pay the full sum insured. A health insurance plan on the other hand is an indemnity plan which reimburses the expenses actually incurred.

The number of CI covered by insurers may vary. Generally, insurers cover 10-20 major critical illnesses or even more. Go for a CI plan which covers maximum critical illness. Some common critical illnesses covered are cancer, coronary artery bypass surgery, heart attack, stroke, kidney failure, aorta surgery, heart valve replacement, major organ transplant and paralysis.

How much cover is needed?
The factors considered while arriving at an appropriate sum insured are age, inflation rate, number of CI covered and future financial liabilities. However, during this pandemic maximum cover should be opted for. For more guidance on the same contact your advisor.

Common Mistakes
While CI plan can be bought as a standalone policy as well as a rider with life and health insurance plans, it is advisable to purchase a separate CI plan. A stand-alone policy offers more flexibility in choosing the sum insured and larger covers compared to riders. The limit on sum insured under a rider is usually the same as the base policy. If you have a health plan or term insurance of `5 lakh and buy a critical illness rider with it, it is unlikely that the insurer will offer you a sum insured of more than `5 lakh for the add-on cover. The premium would be more for standalone CI plan as compared to rider. The second mistake is buying a CI plan with low sum insured. The third mistake is when one purchases this plan at a higher age which increases the premium as well as results in a limit on maximum sum insured.

Waiting and Survival Period Clause
The standard initial waiting period under fresh policy is 90 days. The insured person needs to survive for 30 successive days after the diagnosis of the critical illness in order to make the claim. The policy terminates once the compensation is paid under the policy. As the policy holder’s family grows and income increases, the CI sum insured should also be increased accordingly. The insured can purchase separate CI policy with an increased sum insured.

Uncertainty is a fact of life, and this has been very well proven by the on-going pandemic that has brought the entire world to its knees. A chaos that could not have been predicted but is no less than bitter truth. Covid-19 is spreading like wildfire and has proven to be a life-threatening health hazard.

In a crucial situation like this, having an optimum health insurance plan that would provide some financial relief to the insured and the dependents has been the need of an hour. Medical treatments are difficult and expensive, and digging deep into the pockets whilst struggling with a fatal disease is the last thing anyone would ever want to experience.

One of the small reliefs is that insurance companies do cover this ailment under the health insurance plans, and few of the insurers have also come with dedicated plans to make things better for the new buyers (who do not have an existing plan) during this crucial period.

Opt for a Policy That Offers Sufficient Coverage
Having insurance that provides an adequate coverage amount is the most essential factor whilst selecting a plan. Covid-19 treatments can be expensive, and one must carefully evaluate their health insurance coverage amount based on the dependents, family members, and financial status and liabilities before making a decision. Medical treatments for Covid-19 can cost high medical bills (depending on the severity of the patient’s health), thus choosing insurance plans that provide maximum coverage is important so that one can reduce the burden of medical expenses.

Check the Different Premium Options Available Online
Ideally, one would always prefer a health insurance plan with low premiums but would have sufficient coverage. A health plan should feel like a future securing investment and not a liability. The world has succumbed to the pandemic, and having an optimum health insurance plan that provides financial support is significant. One must carefully evaluate their financial stature and select a plan with affordable premiums that would also provide good coverage and which also very well fits the needs of the individual and his/her family’s needs.

Cashless Hospitals
Many insurance companies have tie-ups with a list of hospitals (also known as Network Hospitals), and having a plan with such an insurer can help one obtain the benefit of cashless treatment during medical emergencies. Thus, this becomes a crucial parameter before shortlisting insurance plans. For new buyers or people who wish to renew their existing health insurance plans, making sure that a particular insurer has tie-ups with nearby hospitals that are equipped with Covid-19 treatment capabilities will make a big difference during an emergency situation.

Go with the Right Insurer
A health insurance provider should be reliable, and the authenticity should be thoroughly verified. Unpleasant service and painful claim processes can be a red flag and should be evaluated before making a choice. There are some parameters based on which one can determine the legitimacy and financial standing of the insurance provider. Verifying a company’s solvency ratio and claim settlement ratio will make a difference in the long run and should definitely be factored in. Moreover, checking the plans online, going through the company reviews, and comparing the quotes will help you get the best deal with the required information about the plan and its features as well as benefits.

Waiting Period Clause
Most of the health insurers come with a waiting period before the policy is commenced. The treatment expenses are covered only after the completion of this waiting period. The waiting period might be different for various insurance providers and can also depend on the date of issue. Thus, choosing a plan wisely but comparing the waiting period is important.

Claim Settlement Process
The claim settlement process is the critical factor with regards to health insurance or, rather, any insurance plan. Claim settlement can be complex or time-consuming at times, and it is the last thing one would want to go through whilst dealing with a lethal disease like Covid-19. Making sure that the claim settlement process is easy, seamless, and agile is extremely important. Hence, one must compare settlement processes, timelines, and approval ratio amongst various companies before selecting a health insurance plan.

After-sale Service
An insurer holding positive reviews about customer service can be extremely reliable. Customer reviews provide a holistic view of all the key parameters about a company and help make the correct decision. Opting for an insurer that is known for providing great customer experience, after-sale service and assistance can be considered reliable during the difficult treatment phase.

Bottom Line
Coronavirus is a serious issue at hand currently and is hugely impacting people across the countries. Medical institutions are tirelessly working to eradicate or contain the spread, but it still looks very far-fetched at the moment. In the meantime, having the right health insurance program can make a tangible difference and ensure that the overall scenario is less stressful. It has now become a necessary choice and one must make an informed decision while buying one by carefully evaluating all the above key factors.

It is said that the hardest times teach us the most valuable lessons. One such lesson that we have all learned in the recent past, is the importance of financial stability and proper healthcare support. Health insurance players have observed a commendable rise in demand, thus increasing health insurance penetration in the country.

With this rise in demand and the spreading awareness comes the need to educate ourselves. It is important for people from all ages to understand the right choice of health insurance for themselves and their loved ones. A health insurance plan should be designed to support your healthcare needs depending on factors like age, fixed income and serious ailments.

Young Adults and Early Jobbers: People from the age group of 25 to 35 years, who might have just started working, sometimes have a stringent financial situation. For such people there are a few things that should be considered while choosing an insurance plan.

Minimum waiting period – These individuals should choose an insurance policy which has a minimum waiting period. It is not necessary for them to wait for a longer time period unless they require a pre-existing disease cover.

Value for money – Financial planning is an important aspect for the early jobbers, so any investment should be done considering the value for money. In addition, there are several people with capital constraints and an insurance plan which provides substantial cover with adequate investment is beneficial for them.

Healthcare Network – The chosen insurance company should offer well-networked services across all the country. It is vital for an insurer to be able to provide quality healthcare services with their network of hospitals your city or town of residence.

Hassle-free services – Due to the pattern of life we have at the early stages of our life, there remains very less time to spare. Hence, it is necessary to choose an insurance provider with hassle-free services. Insurers offering easy access to policy documents, quick claims and claims resolution is a must as this will make life easier during an unfortunate hospitalization.

Aged 35-55 years or Families: As people grow older, their financial and healthcare priorities tend to change. While considering waiting period for pre-existing disease, network hospitals and hassle free claim processes, individuals and families in the age range of 35-55 years, require a few additional factors to be included while planning to buy a health insurance policy.

Higher sum insured – Most diseases are diagnosed during the fourth and fifth decade of one’s life. So, while buying an insurance cover, one should be ready to invest in policies with higher sum insured, preferably above 5 lacs.

Coverage for family – Young couples is advised to include family coverage plans that can provide security for their spouse, children and dependent parents as well. It is also prudent for people above 45 years to individually have an adequate sum insured.

Above 55 years and Post - retirement: Health insurance is a very important part of a retirement plan. Post-retirement health insurance support can be pre-planned by an individual or it can be provided by a loved one.

Wellness and preventive services – For someone above the age of 55 years, one should identify an insurance plan that offers more wellness and preventive services like a condition management program, yoga, meditation for diabetes or hypertension. The plan must provide and cover the expenses of tailor-made advice on health and nutrition

Home-care services – In the post-retirement phase, there is utmost need for choosing a health insurance plan that includes homecare, domiciliary and day-care services. This will help families meet the care requirements of the elderly without stressing their finances.

Telemedicine Services: Many insurers now provide telemedicine services as part of their policy. This is very helpful, especially for the elderly, as they can get easy access to a qualified healthcare specialist to address their concerns without the need to travel to a hospital or be dependent on their loved ones.

Critical Illness: Health insurance policies can help people be prepared to meet unforeseen medical expenses in the conceivable future. It enables financial support during incidents of healthcare emergencies. This is crucial for anyone who is susceptible to any critical illness due to their genetics.

Early decision making – People who are familiar to the threat of a critical illness, hereditarily, should not hesitate to buy a cover at the earliest.

Disease-specific policies – When there is a requirement of an insurance cover for a serious ailment, one should opt for plans like Cancer Care Policies, Policies for people diagnosed with Heart disease, etc., The right insurer can help people to address any medical emergency in the most appropriate manner. Health Insurance is like collateral security to safeguard one’s wealth. Let us promote awareness of the need for health insurance and thus help India achieve greater penetration.
Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.