Mediclaim: What you need to know

Let me emphatically state: Everyone needs a medical insurance cover. Everyone should get one.

In case you still don't have one and are keen on shopping around for a cover, here's what you need to look for.

Let age work in your favour

The premium is what you pay every year to the insurance company. This is the cost of the cover. The cover is the actual amount that you are insured for.

You can pick your cover and the insurance company will pick its premium.

The premium will depend on your age and the cover. The older you are, the more expensive the premium.

Let's say you take a Rs 1,00,000 medical insurance cover from the National Insurance Company Ltd.

Age (years)	Annual premium
Till 35	Rs 1,310
36	Rs 1,425
46	Rs 2,039
56	Rs 2,322
66	Rs 2,598
71	Rs 2,784
76	Rs 3,445

However, the above premiums are before service tax and education cess. So this is what the premium will work out to.

Basic Premium	Rs 1,310
Service tax (12.24%)	Rs 160.34
Education cess	Rs 3.21
Net premium	Rs 1,473.55088

So, whatever age you are, the premium is fixed.

If you buy the policy when you are 25 and pay Rs 1,310, then, when you turn 36, it goes up to Rs 1,425.

If you look at it from this point of view, then it does not make a difference when you take it. Because, when you grow older, you will pay a higher premium. The benefit lies in the fact that the younger you are, the lesser the illnesses or sicknesses you have so everything is covered.

When you take a medical insurance policy, your pre-existing illnesses (the illnesses you currently have) are not included. So it is best to take it when you are totally healthy.

Get your family insured too

Just married? Then take a cover for yourself and your spouse.

Have a child? Cover your child too. These days, doctors often ask that the children be admitted into hospital for observation when sick.

Let's say you are a family of three. And each of you gets insured for Rs 1,00,000. Then you will get a 5% or 10% discount on the premium you are paying for all these policies. For more than one cover, the insurance companies give a discount.

But, if you fall ill and your expenses come up to Rs 1,25,000, you will not be covered for Rs 25,000 since your individual limit is Rs 1,00,000.

Know what is not included

Everything and anything is not covered. Please do your due diligence before opting for a policy.

Go through the list of exclusions in detail. You don't want any rude shocks later.

Any sickness or disease that you had before you took the policy will not be covered. These are known as pre-existing illnesses.

Some insurers specify they will not cover obesity related illnesses, expenses related to terrorist acts or war or riots.

Expenses arising from HIV or AIDS, use of alcohol or drugs, or a suicide attempt are never covered.

Certain ailments like sinusitis, ulcers or cataract may not be covered initially -- say, in the first year or so of the policy. While in the first month or so, nothing may be covered except accidents.

Be clear on repayment

You will get an identity card when you take the policy. The insurance company will have a tie-up with a number of hospitals. If you use the card there, you will not have to make any payment; the insurance company will directly pay the hospital. This is known as the cashless benefit.

If you do not check into one of these hospitals, then you will have to make the payment yourself, produce bills to the insurance company and then get reimbursed.

Look at other aspects

There is a personal accident cover which only covers accidents and disabilities arising from accidents.

There is also a critical illness cover which only covers major illnesses. This time, the insurance company will pay you a lump-sum amount (whatever you are insured for) when the illness is diagnosed

These can be added to your Mediclaim.

There is also the cash benefit. This is the allowance the insurance company gives you and is a cash amount for the time you spend in the hospital. You can take this in addition to your normal insurance policy.

For instance, Bajaj Allianz refers to this as Hospital Cash. In addition to your normal premium, you will have to pay an additional premium if you want this benefit. Let's say you are 28 years old, you want a cash allowance of Rs 1,000 per day when you are hospitalised and you want this benefit for 30 days; the annual premium you need to pay may just be around Rs 600. So, during a year, a total of 30 days will be covered.

You have a wide choice

You have many insurance companies offering medical insurance.