I am a 38 year old office worker with family floater health insurance covering Rs 5 lakh. Earlier this year I had to have a surprise heart surgery which cost her Rs 5 million. The treatment and hospital bills used up the full amount of my insurance plan. Within the same policy period, her wife was also diagnosed with gallbladder stones, costing her treatment and hospitalization around Rs 1.5 lakh. I wasn’t ready for my next hospital stay, so I had to pay for my wife’s treatment in full out of my own pocket. How can I be prepared in case I need to have multiple claims within my company?
– Dheeraj Chawla of Noida
Answered by Sarbvir Singh, CEO of Policybazaar.com
Thank you for your inquiry. Given the rise in serious illnesses across all age groups, this is not just a concern for you, it is a fairly common problem among policyholders today. It is becoming necessary to have sufficient health insurance coverage to cover multiple unforeseen medical expenses within the same policy period. Fortunately, insurance is now designed to help policyholders maximize their safety net in the face of health adversity. One of the features of such health insurance is recovery benefits. This feature is specifically conceptualized for situations like yours, where a single hospitalization claim can deplete your policy amount.
During times like these, choosing a reinstatement benefit in your plan can help you because this financially sound decision can help you process multiple claims in a year. In simple terms, it puts the original insurance amount back in case the original insurance amount is gone. This is the easiest way to increase your protective cover without worrying about running out of insurance money. If you have a Family Floater plan, this benefit is ideal for plans where the same policy is shared by multiple policyholders. As such, it is more likely that multiple claims will occur within a policy year.
There are two types of recovery benefits: partial exhaustion and complete exhaustion. As the name suggests, the former will return the insured amount if the limit is used up, while the latter will return the insured amount even if part of the insured amount is used up. Previously, the policyholder could opt for her one-time restoration. That is, the insured amount will be restored only once by him within the period of insurance. To effectively meet the needs of different types of consumers, benefits have evolved over time to accommodate multiple hospitalization claims.
You can now choose a plan that provides unlimited recovery for all eligible participants for hospitalization for the same or another illness within the same policy year. For example, if a couple has her insurance for Rs 50,000 and the husband claims her Rs 50,000 for heart surgery, the wife may make another claim in the same policy year up to her Rs 50,000. I can. If the husband needs to be hospitalized again for the same heart disease in the same policy year and claims up to Rs 5 lakh, he can do so.
However, you should know that benefits come at an additional premium and the maximum amount for a single claim is usually up to the sum insured. Also, even if you do not use it within the contract period, the restoration benefit will not be carried over. You should also understand any plan exclusions or exceptions that may prevent your benefits from triggering. Most importantly, don’t forget to choose high-value insurance in your policy. Recovery benefits should not be viewed as a substitute for high-value insurance. If the insured amount is insufficient, recovery benefits will continue to be voided, as this may not cover the first hospitalization claim for him at all.
(The views expressed by the investment professional are his/her own. For investment inquiries, please email askmoneytoday@intoday.com. Our expert panel will answer your questions. )
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