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Provisions in mediclaim policies you must know

Pankaaj Maalde of explains the importance to read the documents and details relating to mediclaim insurance. He points out the important clauses to be noted and consider a plan only after reading the same.

July 25, 2013 / 06:13 PM IST

Pankaaj Maalde

Mediclaim or Health Insurance is way of covering yourself and your family against any medical emergency arising out of any diseases or illness or accident. It is rightly said, "Health is Wealth". But truly speaking how many of you are really serious when you plan to buy new health insurance plan?

Also read: How IRDA's recent health insurance reforms will benefit you

The awareness to buy health insurance is increasing. But do you devote reasonable time to research and compare the features before finalising the plan? Truly speaking answer is no. We have seen that people make a major mistake while opting for health insurance plan.

It is very surprising to know that most of the people think that the plan of one company is similar to the plan of other company and decide buying a health plan only on the basis of the premium payable. This is not the correct way of buying health insurance. The most important thing before buying health plan is to know the features which can affect your claim amount in the future.

It is important to know the basic difference in features while buying the new plan. You have to do some home work on the same and know all the exclusions and restrictions on the claim before finalising the health plan.

Buying health insurance plan without knowing the dangerous provisions can really hit you badly when the actual claim comes.

The following are the three major clauses you must read carefully before signing the application form. The premium comparison should be the last criteria for selecting any health insurance plan.

1) Room rent sublimit:

This is the most dangerous provision in health insurance policy where the claim amount is decided on the basis of room rent you stayed in while hospitalised for some illness. The sublimit is per day and is fixed at percentage, 1 percent or 2 percent, of sum assured.

There is also upper cap of amount say Rs. 3,000 or Rs. 5,000 per day depending on plan to plan. The room rent sublimit is the ceiling in the policy on room rent payable per day in which you are supposed to stay when you or any of your family members is hospitalised.

As we all know, hospitals have different types of rooms available like general ward, twin sharing room and single room. The charges of any illness is decided on the basis of room you opt even though there is no difference in treatment and medicines given and even the doctor is same.

This simply means in case you stay in a room costing higher than sub-limit, all other hospital expenses will also be reduced proportionately by Insurance Company on the basis of what you would have incurred had you stayed in a room that costs below your room rent sublimit. In other words you are unlikely to get the full amount of claim even if the claim amount is well below actual sum assured.

2) Co-payment:

There are some policies available in the market in which co-payments are required to be paid by policy holder which is 10 percent to 20 percent of the claim amount. Co-payment means, part of the claim is to be compulsorily borne by the policy holder.

Co-pay is levied when you or any of the family members is hospitalised in any of the non-network hospitals. It is also applicable compulsorily for claims made in case patient is of 65 years or more. If you don’t to know this provision well before you buy any health insurance plan than you will have to bear part of the claim every time when the claim arises.

Again you will not get the full claim amount even if the claim amount is well below sum assured. You can opt out of this by paying additional premium in few cases which you need to check before buying a plan.

3) Premium loading after claim:

You should also know before buying a health insurance whether the plan has claim related loadings or not. Most of the time people buy health policy based on the lower premium but fail to understand the impact of premium loading in case of claim.

There are some policies available in the market where there is provision of loading the premium in case of claim which is up to 200 percent of the premium amount. The loading happens at the time of next renewal and automatically cheaper policy becomes more costly product available in the market.

What is the solution now? If you are looking out to buy a fresh mediclaim policy, avoid any policy that has such a restriction. There are total 23 companies which offer health insurance in India. You have too many options available at present and many companies do not have such restrictions in the plan.

All the details related to plans are now also available easily on net and now it’s your duty to do some work so that there is no hassle at the time of claim. If you already have such a policy, then use the recent portability guidelines to shift to any insurance company that does not have any such restrictions. 

Of course, if you are older than 45 years or have made claims in earlier years, the new companies may not be willing to accept your proposal. In such cases you will have no option but to continue with older company and also plan a medical contingency fund to deal with these extra expenses that are not reimbursable.

It is always advisable to disclose all the facts correctly while applying for the fresh insurance plan including health history if any so that claim is not rejected in future.

You must also fill the proposal form yourself and it is not advisable to just sign the form and give blank form to any agent. If we devote some time before buying any health insurance plan then definitely there won’t be any problem when the actual need arises.

Apnapaisa is India’s online marketplace for loans, insurance & investments. The author can be reached at

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