Medical emergency - what are your last minute funding options?

Whenever a medical emergency arises, the highest priority remains to get yourself or your loved one treated without losing any time, and finances can be taken care off once the family comes out of the trauma. If the person is the bread earner in a family, the situation becomes difficult for other members to manage without access to funds. There are situations in which many of your dependable options will prove to be unhelpful.

Here is how you should handle such a scenario if it ever arises.

Health insurance can be of limited help

Health insurance plans help you deal with a majority of such incidences, though they don't come without a long list of exceptions. Even when you have a health plan, it is always not a full-proof guarantee of funding. What if the emergency requires you to get into a hospital where the cashless facility does not work? What if you go to a network hospital but your request for cashless pre-authorisation gets rejected. What if the disease falls in the exclusion list of your health policy or the emergency happens during the waiting period for pre-existing diseases? Even when the disease is covered in cashless hospital, what if the cover itself is not sufficient? There are many such conditions in which a health insurance policy does not help much.

Most individual or family floater plans have a waiting period for pregnancy coverage so if pregnancy happens before that it is not covered. Pregnancy treatment and any emergency arising in due course like caesarean section are generally not covered under health insurance. It may not cover many other medical conditions such as hernia, cataract, gall bladder stone removal, calculus diseases, hydrocele, joint replacement, sinusitis, Fibromyoma, Benign prostatic hypertrophy, piles, fistula in the anus. Abortion is still in debate, whether to legally approve it or not so it is excluded from the health insurance package.

Most health plans do not cover dental treatment unless due to accident. If you want to go for refractive error correction treatment, there are higher chances that your policy may not cover it. Similarly, if you or any of your family members need hearing impairment correction, you will have to do it out of your pocket. Besides the cost of treatment, many other expenses are usually not covered by most health insurance policies. Diagnosis charges to identify the presence of the diseases performed at hospital or nursing home are not usually payable by medical insurance.

Having medical insurance is limited to few, and a majority of Indians still do not have any health coverage and depend totally upon their funds to meet any medical emergency. However, the treatment cost does not depend upon your affordability. Besides, not everyone has a readily available surplus or savings to take care of financial exigencies arising out of medical emergencies in the family. So, what to do if you need immediate emergency funds for medical treatment, either for yourself or for your family members?

How helpful are credit cards

When it comes to meeting the emergency funding requirement, a credit card saves the day for you. If the cost is within your affordability range, you can very well pay it off by the next billing cycle. In case the amount is significant, you can convert the dues into EMIs if the interest charged is reasonable. However, if the interest rate and processing fee charged by your credit card are higher then, you can use the free credit period to find a low-cost loan option. If you have running home loan, then you can get a top-up loan at a lesser cost to pay off the credit card dues. Else, you can take a secured loan against property or loan against FD or loan against other financial securities at lower interest rates. In case these options do not work, you can go for a personal loan, which may come at a much cheaper interest rate than the credit card EMI option.

The problem that many may face in spite of having a credit card is when they do not have sufficient credit limit. In such cases, they will fall short of funds despite having a credit card. Then many do not have a credit card. What should they do if they are faced with such a medical emergency funding requirement?

New age fintech solutions

Many fintechs these days provide instant loan facility. If you are digitally savvy, you can get access to finance from fintech companies. Download their app or visit their websites and share KYC details. Then authenticate your identity and authorise them to deduct EMIs digitally. Unless you have a poor credit history, there is a higher probability of you getting a loan.

For example, a start-up, CareCover, provides loans for a medical emergency. It offers pre-approved loan cards to cover all OPD and day-care surgeries. The limit for the cards ranges from Rs 50,000 to Rs 5 lakh. It's automated system sanctions medical loans in 5 minutes and disburses them to a hospital's bank account in a maximum of 12 working hours. "We provide loans for 12 months at 0% interest rate with no hidden charges. Interest is charged only if the applicant is taking treatment at a non-network hospital. We have an annual fee for the card, which ranges from Rs 999 to Rs 2,499, depending on the number of people covered," says Nivesh Khandelwal, CEO and Founder, CareCover.  

There is no exclusion list with this card. "Once a card is issued, we do not reject or restrict usage of our card at any of our network hospitals. We cover all diseases and treatments and do not have an exclusion list like traditional health insurance," says Khandelwal.

Even when you have a health insurance plan, and if you have a family history of diseases that fall in pre-existing disease category, consider it as an additional funding option. "The fee for annual membership is affordable. The card can cover up to four family members and the pricing for the card differs depending on the number of family members covered. The card can be bought as an add-on to your health insurance," adds Khandelwal.

Also read: Has your health insurance run out? A medical loan may help