• Charles Pennefather

Medical Insurance 101

I have a number of friends who are making their first purchases as far as insurance is concerned. This was an attempt to simplify it for one of them.


· Buy as large a policy as you possibly can. The total amount is divided into components, you won’t get the entire amount for one thing. Example: a Rs 2 lakh policy won’t cover a Rs 2 lakh room bill because the room bill component will be around Rs 30,000.

· Buy it as soon as you can. Insurance companies have something called a ‘preexisting disease’ clause. This is to ensure that you haven’t purchased the policy worth Rs 15,000 only to get a procedure worth a few lakhs done a few months in. If you’ve had knee surgery before, the new policy won’t cover your knee trouble for at least two years. After this period, they will be covered. So buy a small amount policy if you want, you can always top up the amount later.

· Look up the claim settlement ratio. There are a number of websites that will offer you statistics and comparative pricing, like policybazaar.com. The best claim settlement ratios are the best companies, because they tend to honour claims more than others.

· Multiple policies aren’t of much use. If you have a large procedure and are planning to split the claim between more than one provider, how will you provide the hospital’s original bills to both providers at the same time?

Read the fine print. Or just call their toll free numbers and talk to them. Some providers will offer you a trial period – if you don’t like their policy, you can say no to it within a few weeks of your purchase, just like a product off Amazon.

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