Your address also determines health premium

Before buying health insurance one needs to go through the fine very carefully. There are certain clauses in the policy which, if ignored, can prove costly. Let’s know about one of them. The cost of insurance premium is determined based on several factors such as the age of the policyholder, medical history, occupation, and even the city they reside in. Health insurance companies have divided the premium into three categories based on the  zones of the cities – Zone A, Zone B, and Zone C.

The metro cities of the country come under Zone-A.  Cities like Bengaluru, Ahmedabad, Surat, and Jaipur are included in Zone-B, and the rest of the areas fall under Zone-C. The important thing here is that all insurance companies have categorised zones according to their own criteria. Therefore, the category of zone will vary in each company’s plan. People living in villages or small towns get cheaper health insurance compared to big cities. But when they use this policy in big cities, the company deducts the claim amount based on the policy’s terms and conditions in that zone.

For example, if a person of 30 years age has a wife and two children. If he takes a Bajaj Allianz Health Guard Family Floater Plan of ₹5 lakh rupees in Delhi, i.e., in Zone-A, then he will have to pay a premium of Rs 20,945.  In Zone-B, he will have to pay Rs 16,756 for the same while in Zone-C, he will have to pay Rs 14,662. This way, he will get a 20% cheaper insurance plan in Zone-B and 30% cheaper in Zone-C.

Talking about Bajaj Allianz, if a policyholder living in Zone C gets treatment at a hospital in Zone A, then he will have to personally bear 20% of the bill.  Similarly, if a policyholder from Zone B gets treated in Zone A, he will have to pay 15% of the expenses from his pocket. If someone from Zone C gets treatment in Zone B, he will get a 5% lower claim.

If you live in a small city, you have two options for health plans: you can opt for a plan with a lower premium under zone-wise slab or, you can opt for a regular health plan by paying a higher premium. Many times, people, without understanding the co-payment rule buy insurance policies. Later, if the need arises for treatment in a big city, they feel cheated because of the co-payment issue.

Midas Finserve’s director, Pankaj Rastogi, says that the cost of hospitalisation in small towns is lower compared to metropolitan cities. Insurance companies also acknowledge that people living in metropolitan areas may face a higher risk of lifestyle-related illnesses. Therefore, the premium for Zone-A is higher. Some insurance companies try to provide the people in villages and small towns with the benefit of lower cost. But you should overlook the benefit of saving Rs 2,000-4,000 premium. If you have to undergo treatment in a big city in the future, you might end up paying several times the saved amount in one go.

To avoid situations like these, it is advisable to pay slightly higher premiums, and, opt for complete cashless coverage anywhere in the country. If you are shifting from one zone to another, inform your insurance company so that next time during policy renewal, the premium can be adjusted, and you don’t face problems when you file your claim. There is no wisdom in saving Rs 2,000-4,000 on health security issues.