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Newspapers have claimed that New India Assurance's newly launched top-up policy is the cheapest. These articles assert that you can even do cosmetic surgery and claim the amount over the deductible, for expenses covered by mediclaim. Here is the truth
New India Assurance (NIA) has launched a top-up plan, which is being hailed by few newspapers like the Times of India (ToI) and Economic Times (ET) as the cheapest product available. This is incorrect. The NIA top-up plan is not the cheapest and it is more expensive than super top-up products which are a better option.
The ToI article states - A unique aspect of NIA's cover is that for the threshold limit to be reached, all hospitalization expenses are taken into account irrespective of whether the expenses would qualify as an insurance claim. This means that the insured can spend Rs5 lakh on a cosmetic surgery (which is not covered under mediclaim) and recover any additional health expense (covered under mediclaim) under the top-up plan. This is absolutely incorrect information. Moneylife wrote about the discrepancies to New India Assurance, but there was no response till the writing of this article. In fact, there is no health insurance product that covers cosmetic surgery.
NIA top-up has deductible of Rs5 lakh and Rs8 lakh. It is a high deductible plan. There are top-up/super top-up products available in the market with deductible from Rs2 lakh onwards. The lower the threshold deductible, the higher are the chances of being able to file a claim and benefit from the policy. With NIA top-up limiting the deductible to be a high amount of Rs5 lakh and Rs8 lakh, the product has limited flexibility.
The premium for a 41 year old person buying NIA top-up with deductible of Rs5 lakh and coverage of Rs5 lakh, will be Rs1800 + tax, which is Rs2022. United India's top-up for the same deductible and coverage will have a premium of Rs1910. Apollo Optima Plus is a top-up plan with a premium of Rs1348 for the same parameters. It is obvious that the NIA top-up plan is not the cheapest, as claimed by leading media publications.
L&T my: health Medisure Super Top Up and United India’s Super Top-Up are the only standalone super top-up policies available in the market as of now. The premium for L&T super top-up plan is Rs1112 for the same parameters and United India's super top-up is Rs2135. It means L&T super top-up is cheaper than NIA top-up and United India super top-up costs a little more premium. Moreover, you should prefer super top-up products over top-ups as these offer better benefits.
The difference between super top-up and top-up is that in the case of a top-up policy, the expenses for a single treatment should be over the threshold, whereas in a super top-up the total expenses in a year must be above the threshold level for the policy to be useful. Thus, between a top-up and super top-up, the latter is more beneficial for customers. Examples of top-up products that you should avoid are - United India Insurance (Top-up medicare), Bajaj Allianz (Extra Care), Apollo Munich (Optima Plus), ICICI Lombard (Health Care Plus) and Star Health (Super Surplus). You can add NIA top-up plan to this list of products to avoid.
NIA's policy wording clearly states –
The following Hospitalisation expenses incurred in respect of all the Insured members shall be considered for determining the Threshold under the Policy:
• The admission in the Hospital should have happened during the policy period.
• The Insured should have been admitted as an inpatient (outpatient treatments are not to be considered).
• The Hospitalisation should be for an Injury or Illness.
• Pre–Hospitalisation and Post–Hospitalisation expenses will not be considered.
The exclusions section specifies following non-covered procedures - Circumcision, cosmetic or aesthetic treatment, plastic surgery unless required to treat Injury or Illness.
If the policy clearly states that deductible threshold will only considered hospitalisation for injury or illness and exclusions specifies cosmetic surgery as non-covered, then how can TOI and ET media get it wrong?