Affordable Rs 1 crore health coverage plans: Is there a catch?

If you have explored options to buy health insurance plans lately, you would have come across affordable health plans with Rs 1 crore policy coverage. Insurers like Aditya Birla Health Insurance, Max Bupa Health Insurance and insurance aggregators like Policybazaar and PolicyX have been promoting Rs 1 crore health plans at cheaper premiums that include a base cover along with a top-up plan.

"Cost of hospitalisation has been going up quite dramatically, especially in case of critical illnesses. So, higher the policy coverage, the better. However, affordability is equally important. Not all can shell out lakhs on premiums. So, there has been a lot of innovation on providing maximum possible coverage to customers at cheaper premiums. Now, Rs 1 crore health plan for a family of two adults in their early thirties is available for about Rs 15,000," says Amit Chhabra, Health Business Head, Policybazaar.com.

How is it possible, you wonder? So, although a health plan with a base cover of Rs 1 crore will be expensive, the combination of a small base cover along with a higher top-up plan is how insurance companies and insurance distributors have made the product affordable for customers. Take, for instance, Activ Health Enhance policy by Aditya Birla for a 32-year-old customer will cost Rs 32,353 per annum for Rs 1 crore base coverage. However, the same policy for a base cover of Rs 5 lakh along with Rs 95 lakh top-up will cost Rs 9,552 per year.

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Is there a catch when you go for the second option? Not necessarily. However, the second option is not available to all. If you have a pre-existing disease like diabetes or hypertension, you'll not be eligible for top-up option of Rs 1 crore policy coverage. There are few other limitations as well. "First, it is meant only for fit people. Second, if you have an existing health policy, you cannot port it to Rs 1 crore cover policy. Third, in some policies there could be restriction of room to a single private A/C room," says Naval Goel, CEO & Founder of PolicyX.com.

Should you buy such plans?

Most people tend to buy a policy coverage of Rs 5-10 lakh. However, the coronavirus crisis has showcased how inadequate this amount could be. There is no 'one size fits all' health coverage amount. It should depend on the average cost of medical treatment in the city where one stays and whether or not covered members have critical illness. Raj Khosla, Founder & Managing Director at MyMoneyMantra, believes Rs 50 lakh policy coverage is enough for an individual or a family floater of two adults and two children. "At the age group of 25-35 years, it is advisable to start with Rs 50 lakh policy coverage for individual and family floater (2 plus 2) policies and revisit the same after every five years. One can go for Rs 20 lakh of base policy along with top up of Rs 30 lakh available with insurance companies. In case of any specific pre-existing medical condition of family member(s), one should evaluate health insurance needs accordingly."

So, although Rs 1 crore plans are indeed on the higher side, if it is available to you at cheaper rates, there is no harm in taking it, especially if you are going for a family floater policy. Individuals can also consider it because they can add family members under the same policy in due course.

Policybazaar.com says 40 per cent of all the health insurance policies sold online on its platform in the last three months have been the ones with Rs 1 crore sum insured compared to just 3 per cent initially when such top-up plans were launched in 2019. People in the age group of 25-35 years are the ones buying these policies more.

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Who should buy Rs 1 crore base cover?

If you are healthy now but have a family history of any critical illness then taking such a plan at a young age could be a good idea. Based on your personal experience if you have apprehension about an illness that may require multiple hospitalisation or expensive medical treatment including treatment in foreign countries, you may need Rs 1 crore coverage.

"We have seen that it is mostly the affluent customers in the age of 40 and above who prefer health plans with sum insured of Rs 1 crore or more. Also, people with risk of critical illness or who are suffering from either of the life-threatening diseases prefer such high sum insured plans as the medical treatment is expensive," says Krishnan Ramachandran, MD & CEO, Max Bupa Health Insurance.

People often face extreme monetary burden due to critical illnesses and in such a situation having a big health cover could be reassuring. "Many critical illnesses like kidney aliments will flush Rs 25,000 out of a person's pocket in a single month as each session of dialysis would cost anywhere around Rs 2,000-3,000 in a metro city. The combined cost for surgery and chemo sessions would cost around Rs 20 lakh if a person is critically ill. Then, there are various organ transplantation surgeries that involve expensive medical procedures," says Ramachandran of Max Bupa Health Insurance.

However, affordability and expected quality of treatment should be the basis of your decision whether to go for such higher cover or not as these are relatively expensive plans, although they come with additional benefits. Max Bupa's Health Premia plan offers up to Rs 3 crore sum insured and provides host of benefits such as health checkup for adults as well as children from Day 1 based on their preference, worldwide maternity cover and new born cover without any additional premium from the day baby is born till policy year end. The plan offers international coverage for specified illnesses and medical emergencies, along with in-built travel insurance coverage.

Just because these plans come with higher cover does not mean they will be handy against all diseases. Despite higher premiums these plans will have their own set of excluded diseases. So it makes sense for you to understand all about waiting period, capping of expenses at disease level and checking exclusion list thoroughly before going for such a plan. If you find the premium beyond your comfort zone you should rather stick to a good basic comprehensive cover for your family and topping it up with a Super Top Up plan of an amount that you can easily afford.

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