Your address may decide extent of health cover

Health insurance is a necessity nowadays and covid has just accentuated the need for people to have one. But do you know the address where you live will make a difference to the cover you get. And the insurance companies charge premium based on this parameter. The rates allowable for a certain procedure may vary according to the residential address of the insured.

Health insurance companies have divided the premium cost according to the zones in the country. People living in rural areas or small towns get cheaper health insurance compared to those  living in big cities. However, when they use the same policy in a bigger city, they have to  pay the difference in the premium.

Health insurance companies have divided the country into zones 1, 2, and 3. There is a difference of 10-12% in the premium of one zone and the other. For example, if 30-year-old buys a health policy cover of 5 lakh rupees at his Delhi address, he will have to pay a premium of 20,000 rupees. If he buys the same policy in Meerut, the premium will be 18,000 rupees. In Baghpat, he can get the same insurance cover for 16,000 rupees. So, the premium of zone 3 is 20% cheaper than zone 1 and 10% cheaper than zone 2.

Premium calculation

The premium varies zone wise. Difference in premium also impacts how much claim you can make. If you live in Zone-3 and undergo treatment at a hospital in Zone-2, then, clause of 10 percent co-payment will be included in the claim. If you go from Zone-3 to a hospital in Zone-1 for treatment, clause of 20 percent co-payment will be applied. Co-payment means that the policyholder will have to pay a predetermined portion of the total bill from his own pocket. However, the calculation of the co-payment amount can vary from one  company to the other according to the policy.

If one lives in a smaller town, then he has two health plan options. He can either choose a plan with lower premium under the zone-wise option. Or opt for a regular health plan with higher premium. Many times, in the lure of cheaper premium, people buy the plan without understanding rules and regulations based on zones. Later, when the need arises for treatment in a bigger city, they feel cheated due to lack of clarity on claim payment.

To avoid getting caught in a situation like this, one should pay slightly higher premium and opt for plan with cashless hospitalization option throughout the country. If you are shifting from one zone to another, you should  inform your insurer so that at renewal, you can adjust the premium.