How Adding Add-ons to Your Health Coverage Basket Helps You

The steps involved in purchasing health insurance now include an “add to cart” step, where few add-ons are associated with the base policy. This, after the basic policies are themselves differentiated by various characteristics. Nearly 15-20 add-ons and different features are now available to complement the core policy, either by filling a critical gap in service or due to enthusiastic product innovation. The add-on or a feature for which one pays an additional premium must be perfectly suited to the policyholder. This process can be complicated by add-ons and similar features. Here, we group four similar-sounding features or add-ons and look at the minute differences between them.

Custody offer and OPD cover

Day care procedures and outpatient departments (OPD) do not involve overnight hospitalization. The first involves a medical procedure, but thanks to advances in healthcare, it is no longer necessary to be hospitalized. Outpatient care generally corresponds to consultations with a specialist or a general practitioner and does not involve a medical procedure.

Although it is strictly not a complementary act, the custody act involves an inclusion list which will specify the acts covered up to the sum insured (SI). Policyholders should ideally purchase policies with inclusions at a top-down level – department level such as ENT, dermatology, orthopaedics, dialysis, etc., rather than specific bottom-up listings (specific surgeries such as cataract, dislocation , etc.). We must not be left behind due to medical advances, which can transform an inpatient procedure into a day hospitalization. Chemotherapy and dialysis are special cases in day care procedures and insureds should read the specific terms of coverage. But day care procedures are subject to the same pre-existing condition waiting clause found in hospitalization coverages, even for approved procedures.

OPD covers are more likely to be specific add-ons that provide relative (percentage of sum insured) or absolute limit (₹5,000, ₹10,000 and ₹20,000) to cover outpatient visits, follow-up investigations and laboratory work. OPD coverages may not be subject to PED terms, but the initial waiting period may vary in policies ranging from the first day of coverage to 90 days.

Recharge and super recharge

Both are additional policies that are purchased on top of the base policy. If the medical expenses have exceeded a (pre-defined) deductible limit in the basic policy, these top-ups are triggered, acting as back-ups for the insurance coverage. The deductible limit in supplemental plans and their policy duration should ideally be aligned with the base policy, where the deductible limit is equal to the SI base policy and works in tandem. It can also be recommended that the base and the supplement come from the same company in order to ensure easier coordination in the handling of complaints.

Both are triggered after the deductible ceiling; but it corresponds to each individual claim in a supplementary plan, and in the case of a super supplementary plan it will be for all claims. For example, consider two claims of ₹3 lakh and ₹2 lakh on an SI basis of ₹3 lakh in a policy term. Assuming a deductible limit of ₹3 lakh, the first claim will be covered by the basic policy, while a top-up policy will not be triggered in the second claim (because the deductible limit is not exceeded). A super complement will be triggered in both cases and used in the second request when the base SI is exhausted.

Know the terms

The custody procedure involves an opt-in list

OPD covers are more likely to be specific additions

The Claim Protector (or Protection Rider) is a supplement

Bonus-malus and claims protection

The non-claim premium (NCB) is an almost common feature of health insurance, which allows the IS to increase to 1.5 to 2 times the base year IS with increments of 0, 25 to 0.5 times each year when no request has been made. The Loss Protector (or Protection Rider) is an add-on that not only protects the AON accrued over the years, but also covers consumables and inflation risk. Claims up to a set limit (usually ₹50,000 per year) can be made without disturbing the SI bonus generated up to that point. The claim will also cover consumables listed by the IRDAI regulator in normal claim payments, including consumables, pharmacy or surgical tools. Sinister protector automatically increases the SI to inflation (CPI inflation), which also provides additional comfort. So while the NCB as a feature enhances the core IS, the effectiveness of the IS is enhanced by the Claims Protection Endorsement.

Ambulance assistance and personal crash rider

Accidental injury is covered in the base IS for most policies with certain sublimits on doctor’s fees, consultation, procedures or room rent. Ambulance cover can also be part of the basic policy with a sub-limit of 1-2% of the SI or as an absolute limit up to ₹10,000 per annum. The personal accident endorsement approaches the same risk from a different perspective. The rider pays a lump sum indemnity in the event of permanent disability or death resulting from an accident. The policyholder can opt for the endorsement which helps to cover major medical expenses related to medical care, but on an ex post basis the event has occurred with a permanent impact on the policyholder and their finance.

With a wide range of features and options available, the policyholder can carefully construct a health insurance policy that matches their personalized risk profile.

Published on

August 27, 2022