Friday, May 17 2024
Source/Contribution by : NJ Publications

"I am young, do regular exercises, fit & healthy. Do I need health insurance?" Most of us ponder upon this question when someone talks about health insurance. It may sound weird, but the right time to get a health insurance policy is as early as possible. Possibly, when you are young, healthy and fit.

Let us discuss why it is beneficial as well as necessary to get you & your family's health insured early in life.

Always good to have more options

At an early age you get a broader selection of basic & comprehensive health insurance plan options. After a certain age, due to weakening immunity & lifestyle related health issues, there are chances of getting some chronic diseases like Asthma, Bronchitis, Cancer, Diabetes, Hypertension, etc; This will limit the health insurance options available to you.

It means young customers not only get more plan options but also more sum insured options available at their selection. Young customers are offered higher sum insureds like 50 Lacs, 1 Crore or more at very affordable premiums. Whereas old age customers are usually not offered high sum insureds as the risk is higher than normal so is the premium.

Maternity Benefit

A lot of young couples can benefit from their health insurance policies if they buy health insurance early in life. You can ensure coverage for future family planning. With maternity including prenatal care, delivery, and postnatal care and related covers under health insurance, they can get access to better healthcare facilities with minimal or no additional waiting periods.

Beat the Waiting Periods

There are certain waiting periods in a health insurance policy. Only after serving those waiting periods, claims are eligible to be paid. Some of the waiting periods are:

- First 30 days - no claim is payable except accidental.

- Initial 2 years waiting period for specific diseases / treatments.

- Maternity waiting period which can be around 9 months to 3 years.

- Pre-existing diseases waiting period which can be around 3 to 4 years.

If you start early, these waiting periods can be easily served without the need to make a claim as the chances to fall ill are comparatively less.

Wellness Benefits

Preventive healthcare services such as annual health check-ups, vaccinations and screenings, can not only help you save money on your healthcare but also help in maintaining a good health over a long period of time. Buying health insurance at an early stage in your life helps in early detection of potential health issues and enabling timely interventions. It helps you to maintain good health and prevents the occurrence of serious illnesses.

If you maintain a healthy lifestyle, follow an exercise regime, do regular gym/yoga/swimming/walking/running etc; insurers give wellness points which can be used to get a discount on the premiums. The discount may vary from 5% to 50% on the renewal premiums depending on your plan.

Lower premiums

• Age is one of the major factors in calculating premium for health insurance. Usually, higher the age, higher are the premiums as an old age person is more prone to health risks.
• Existing ailment is another major factor in increasing premium for health insurance. If you have a health condition, you may have to pay more premiums for your health insurance policy.

Therefore, one of the most crucial benefits of getting a health policy early is to lock-in at lower premiums and save on premiums over a longer period of time.

Pre-policy medical tests

• As discussed above, usually with age comes the health issues, therefore, insurance companies ask prospective customers to undergo pre-policy medical tests. Specifically to those who are above a certain age (for eg; 45 years) or customers who have declared a health condition in the proposal form.
• But at an early age, the chances of you having to undergo a pre-policy medical check-up is very minimal. In such scenarios, insurers issue the policies instantly.

No Claim Bonus / Guaranteed Cumulative Bonus

Several insurers provide a No Claim Bonus (NCB) for not making a claim during the policy year. This bonus can range from 5% to 200% of the sum insured. NCB can be accumulated over consecutive claim-free years and it does not affect premiums.

Guaranteed Cumulative Bonus (GCB) works the same way as No Claim Bonus, only difference is that this benefit is available irrespective of claims. It means whether you make a claim or not, your risk cover increases every year.

For Eg: if your sum insured starts at Rs. 5 Lacs, it can increase to Rs. 20 Lacs, Rs. 25 Lacs or 50 Lacs over a few years and that too without any extra charges. At a younger age, you can benefit from this NCB/GCB to increase your sum insured since you are less likely to fall ill & make a claim in the first few policy years.

Summary

Health insurance is a vital element of the entire financial planning, wealth creation and family well-being. Getting yourself & your family's health insured at an early age brings multiple benefits, setting a strong financial plan for a healthy and protected future. Don't delay or wait for a health issue to arise to consider buying a health insurance policy. So, give a thought to the above-mentioned advantages and buy a health insurance plan as early as possible.

Health insurance in the new era is providing you various kinds of coverages, like OPD coverage, worldwide treatment, no claim bonus, etc.

Today we will discuss No Claim Bonus (NCB) and Guaranteed Cumulative Bonus (GCB) features in a health insurance plan. It is one of the most in-demand features extended on a health insurance policy. If you do not make a claim, then as a reward the insurance company increases the sum insured upon renewal. Basically, you benefit from leading a healthy life and not making any claims. This means that the sum insured increases based on the NCB accumulated without paying additional premium - that is you can get more than the base sum insured on the same policy premium. 

Earlier, NCB was given in the form of a discount on your renewal premium. Later, the insurance companies started giving a No Claim Bonus of about 5% or 10% on the sum insured. This has now increased to 50%, 100%, 200% or even 500% or more of the sum insured depending on different health plans and insurance companies. Some health insurance plans increase the coverage irrespective of claims - in the form of GCB.

It means that you can increase the coverage based on the No Claim Bonus or GCB accumulated without any extra charges/premium. In such cases, if your health insurance coverage at the start is Rs 5 Lacs, it can increase to Rs 20 Lacs, Rs 25 Lacs or 50 Lacs over a few years and that too without any extra charges.

Crucial Benefits of GCB or NCB 

There are numerous benefits of the No Claim Bonus element in health insurance. 

● Economical premium: 

No Claim Bonus lets you enhance the policy to fit all the necessities without worrying about paying the entire premium. This is because you can take advantage of the bonus as a discount on the premium. Thus, you get extensive coverage for any accidental or health emergencies. 

● Financial protection:

While not increasing the premium cost, the No Claim Bonus feature lets you increase the sum insured of your health policy. This helps you get better financial back-up when you need it the most. 

● Portability:

The No Claim Bonus coverage in health insurance is transferable to another insurer - subject to applicable terms & conditions. If you port to another insurance company, in that case, the additional coverage you gained under NCB all these years can be carried forward and will be applicable.

How does No Claim Bonus work in health insurance? 

The computation of cumulative bonus coverage under the NCB feature depends on the type of NCB offered by the health policy. 

Suppose Mr. Shah has a policy of Rs. 5 lacs and he did not make a claim during the policy year. While renewing the plan, the insurance company offers him an additional coverage of 20%. As a result, the total risk coverage of the policy becomes Rs. 6 lacs for the subsequent policy year. 

Suppose he does not make a claim even in the subsequent policy year. In this scenario, the risk coverage will increase to Rs. 7 lacs due to the accumulation of no claim bonus. However, a cumulative bonus usually comes with a limit of 100% or 200% may be even 500%. The additional coverage cannot exceed the said limit. So, for five or ten consecutive claim-free years, Mr. Shah will be eligible for a total risk coverage of up to Rs. 10 Lacs (Base Sum Insured Rs. 5 Lacs and 100% NCB Rs. 5 Lacs).

The policy schedule will state the NCB benefit offered under the policy. It also mentions the bonus amount accrued till now. It also varies from health insurance plan to plan and insurer to insurer. 

Guaranteed Cumulative Bonus works the same way as No Claim Bonus, only difference is that this benefit is available irrespective of claims. It means whether you make a claim or not, your risk cover increases every year.

How to take advantage of No Claim Bonus in health insurance? 

Many insurance companies now provide No Claim Bonus or guaranteed cumulative bonus as an add-on cover. 

You can take this add-on by paying a minor extra amount along with your health insurance premium while buying or renewing the health policy. It is recommended that you must understand the benefits/features, read the policy brochure & policy wordings carefully and also evaluate the add-ons based on your needs before buying a new health policy or add-on cover. 

Applicable to family floaters? 

NCB is available in both an Individual health plan and a family floater. Under the family floater plans, NCB is applicable provided that any insured member covered under the policy does not make a claim during the policy year. 

To summarize, the enhanced insurance coverage gained from a NCB/GCB feature also helps to get the best healthcare facilities without worrying about treatment costs. It is therefore highly advisable to contact an insurance expert or an insurance advisor to know more about the Guaranteed Cumulative Bonus or a NCB benefit before buying/renewing your health insurance policy.

Health Insurance in India is growing widely and rapidly from the last few years. Recently, there has been some very critical reforms that will not only shape the future but also help the present customers to reap the fruits.

Cashless Anywhere is one such reform that will change the entire landscape of Health Insurance claims in India.

Introduction about Health Insurance Claims 

In health insurance, there are two modes of claims - Cashless and Reimbursement. 

So when a health insurance client is hospitalized, the hospital checks whether they can provide cashless treatment to the client. It means the hospital, if under tie-up (agreement) with the insurance company, asks for expenses related to treatment of the client. If the insurance company agrees, the client won't have to pay the hospital for the treatment. This is known as a cashless claim.

Whereas if the insurance company denies or if there is no tie-up with the insurance company, then the customer has to pay the hospital bills from his/her own pocket and afterwards submit the claim forms & bills for reimbursements. This is known as a reimbursement claim.

Today, approx. 55% of clients take cashless claims while the others have to apply for the reimbursement claims. They might be admitted to the hospitals that are outside their Insurance company’s hospital network. This puts a lot of strain on their finances and makes the entire process long & burdensome. It was a necessity to make the whole journey of claims a frictionless process, which will not just improve the client’s experience but will build greater trust in the system.

What is Cashless Anywhere? 

In the case of a hospitalization, currently the facility of cashless treatment is available only at providers (hospitals) where the insurer has an agreement or tie-ups.

As per the directive from IRDAI - all insurance companies are working on to provide cashless claims in hospitals. Niva Bupa Health, Care Health and ManipalCigna Health Insurance Companies are now providing Cashless Anywhere facility to its clients. Some insurance companies have already started such facilities at a few locations and soon will provide it to PAN India. This improves client satisfaction and helps to increase penetration of Health Insurance in India.

Some insurers have a network agreement (tie-up) with about 1000+ hospitals, while some others might have a network of 4000 to 5000 providers (hospitals). But, this is one endeavor where the entire healthcare ecosystem of approximately 40,000 providers (hospitals) can work to give the cashless facility to their clients.

Steps 

• Inform about the claim to the Insurance Company well in advance. 
• Incase of a planned hospitalization, inform the insurer 48 hours prior to hospitalization.
• Incase of an emergency hospitalization, inform within 24 hours of hospitalization.
• In case the hospital is not under network list, Cashless service is subject to acceptance by the respective health care provider (hospital).
• In case the hospital is not under network list, Insurance companies may ask the client to take treatment in other nearby hospitals in which cashless is available.
• Even after putting in all the efforts, if the provider is not accepting an offer by the Insurer and the client is not ready to move to another available provider, the client will have to go for a reimbursement claim.

Claim is not payable incase of treatment in Excluded Hospitals. List of excluded hospitals is available on the respective insurance company’s website.

Summary

With this initiative, clients will be eligible to get treated in any hospital they choose, and a cashless facility will be made available even if the hospital is not in the network of the Insurer.

Aimed at encouraging more clients to opt for health insurance, the initiative also acts as a step towards reducing fraud, which has been plaguing the insurance industry significantly and diminishing trust of the clients.

Once this facility of 'cashless anywhere' works at its best efficiency, clients will benefit the most. 

• They don't have to worry about arranging money to pay for hospital bills. 
• They don’t have to run long distances for cashless hospitalization.
• They don’t have to change hospitals/doctors to get cashless hospitalization.
• Get access to world class medical facilities.

In short, Clients will be able to reap optimum benefits out of his/her health insurance policy.