COVID-19 impact | Six things you should keep in mind while choosing a comprehensive health insurance plan

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Covid-19 dominated the headlines in 2020 and became a global cause for concern. One of the most telling changes in the wake of the ongoing pandemic has been the rising awareness around medical insurance and why it is so important to be well-prepared for a medical emergency.

A July 2020 survey by Max Bupa found that prior to the Covid-19 outbreak in India, only 10% of people were interested in buying health insurance. But now, 71% of people believe that health insurance is a necessity. This data itself is a testimony to the fact that Covid has prompted people to realise the importance and the need of health insurance. Max Bupa received around 13,500 claims for Covid.

Health insurance awareness is at an all-time high, which is in sharp contrast to the situation before the Covid-19 crisis, when health insurance was not given much attention, despite it being vital to a household’s financial health. Increasing concerns around hospitalisation and related expenses, uncertainty around treatment and disruptions in regular income are factors attributed to the growing interest in health insurance.

Since treatment for Covid-19 is expensive, the Insurance Regulatory and Development Authority of India (IRDAI) mandated insurance companies to launch a standardised Covid-19 Health Policy, with a minimum sum insured of Rs 50,000 and maximum sum insured of Rs 5 lakh.

This was done to ensure that more people could afford immediate treatment for Covid-19. IRDAI’s directive to insurers was to offer short term health insurance policies for Covid-19 specific treatment, for a minimum term of three and a half months to a maximum of nine and a half months.

Following this regulation in late June last year, insurance companies came up with a number of Covid-19 specific products in early July 2020. Since the launch, these short-term policies have seen a healthy demand. While beneficial for some people, especially those who don’t have any form of health insurance or cannot afford expensive premiums, these short-term insurance products should not be seen as a replacement for a long-term comprehensive health insurance plan.

Health insurance is essentially a long-term product. With age, the health requirements of policy-holders will also evolve and rising medical costs, etc. will need to be factored in. So, people looking to get more holistic coverage for their health and wellness needs should look at buying a comprehensive health insurance plan that protects them against a wide range of illnesses, including Covid-19.

Arogya Sanjeevani, a standard health insurance policy for individuals and families that provides coverage for basic hospitalisation-related expense is an attractive offering.

The benefit of comprehensive policies is that they offer both short-term coverage for hospitalization treatment of specific illnesses due to Covid-19, dengue, etc. as well as long-term protection against critical illnesses such as cardiac disease, liver and kidney diseases, cancer or accidental injuries that need hospitalisation. People need to look at the bigger picture and choose a health cover for Covid-19 and beyond. Today, the environment, modern lifestyle, food habits, stress etc are affecting our health. It is thus important to look at health not just through the lens of today but tomorrow.

A comprehensive health insurance policy offers the assurance that in case of a medical emergency, there is no undue financial burden at sudden notice. Here we look at some basic factors to be considered when choosing a comprehensive health insurance product, including coverage for all family members with an adequate sum insured, and truly cashless claims feature, and why each of these features are important.

Number of people covered: As a standard ideal practice, everyone should have a health insurance. When getting a health insurance policy, it is therefore important to ensure that all members of the family are covered in the policy. Since the policy premium depends on the number of people covered in the policy, the premium may be high if one opts for coverage of every member in the family but it also gives one the assurance that in case of need all members of the family can avail the benefits.

Number of claims permitted: Today, there are health insurance plans with unlimited sum insured for any type of hospitalisation, including treatment of COVID-19, triggering with the first claim itself with no restriction of a person or a disease under the policy. These allow customers to make as many claims as required for themselves or for family members covered in the same policy, for treatment of same illness or different illnesses in a year, at no additional cost. Unlimited coverage is especially useful for critical illnesses such as heart or kidney disease, or cancer, where patients require to be hospitalised multiple times in the same year, for dialysis, radiation, chemotherapy, or surgery. Some comprehensive health policies also ensure that full coverage is available for all family members even if they get hospitalised at the same time. This is especially important in case of unfortunate accidents or illnesses such as Covid-19, where there is a chance that more than one member of the family might need to be hospitalised at the same time.

Amount of sum insured: It is very important to determine the right sum insured for your policy to save you from future stress. In case you need to make a claim during a medical emergency, if your sum insured isn’t adequate to cover the cost of treatment, you might end up having to spend your hard-earned savings. The choice of sum insured may depend on a number of factors including age, medical conditions, city of residence and lifestyle. Typically, a higher sum insured can give you the assurance that you are adequately protected financially in case of an emergency. This is especially important when your family is covered in the same policy since there could be multiple claims in the same year for different people, and a lower sum insured would be insufficient. Another factor that needs to be kept in mind while deciding on the adequate sum insured is medical inflation. An amount which may seem adequate today may not be enough 5 years later. So one must always go for a slightly higher sum insured than what may seem enough for today, given the fact that there is a very high medical inflation.

Protection cover: The treatment cost varies depending on the nature of illness and criticality of the patient’s condition. While taking a health insurance policy the customer needs to evaluate the level of protection he is seeking. While a higher sum insured will ensure that the customer gets almost 100% protection in event of any costly treatment, a lower sum insured may be just enough to provide him anywhere between 60-80% protection and the remaining amount be borne by the customer out of his pocket.

All expense covered/Rider: While most health insurance policies come with riders which permit only part of the claim amount, some specific comprehensive policies come with a safeguard benefit which offers 100% coverage of medical expenses by paying for even the non-payable items such as room charges and administrative expenses, expenses on personal protective gear, oxygen masks, conveyance charges etc. This may ensure that the customers doesn’t have to incur any out-of-pocket expenses. Apart from paying for the non-payable items, the safeguard benefit also offers protection from inflation based on Consumer Price Index (CPI), where there is a cumulative increase in the base sum insured on annual basis as per the inflation rate.

Long-term benefits: It is important to understand that insurance is not only for emergencies. As people age, they start developing health conditions such as hypertension, diabetes, arthritis, etc. It is thus important to be covered from early on before such conditions develop to avail the policy benefits at later stage. As insurance may not be available at standard terms after development of a disease.

Covid-19 or any disease specific insurance plans help to manage enhanced risk of a disease or the enhanced perception of risk.

However, they cannot be replaced with a base cover as the former covers few specific diseases only – mostly infectious in nature, while the latter covers a much wider spectrum of health conditions. With more people realising the need to prioritise their health, this is the right time for them to make well-informed choices around health insurance and be adequately prepared to meet any unforeseen medical expenses.

(The writer is Director Underwriting, Products & Claims, Max Bupa Health Insurance. Views expressed are personal)