Segregate Mediclaim without losing existing policy benefits

Mahavir Chopra

One of the happiest moments of my life was holding my son for the first time. Time stopped in that one moment and as it might resonate with most fathers, my future flashed in front of me. My child, the famous cricketer, scientist, artist, India’s answer to Jimi Hendrix and what else not! Thankfully I snapped out of the rather melodramatic and indulgent daydream quickly! As would most agree, reality of bringing up kids is a whole different ball game. The next two decades are filled with the mundane: of balancing daily schedules, school, play dates, family vacations. The mundane sometimes disturbed rudely by health issues: some of us being fortunate with our kids coming down with the regular sniffles, fever, cough sort of issues and some more worrying and unfortunate like broken bones, accidents and serious health issues.

IT’S TIME TO BUY THAT HEALTH INSURANCE

As a somewhat young parent myself, I can vouch for the fact that parenthood does automatically push you into becoming more responsible and definitely a lot more concerned for your child. The doors of realization are fast to unlock. You reach for the seatbelt on your own, buy that car seat, drive slower, reach out for your stumbling toddler in reflex and of course, finally buy that family health insurance you procrastinated about for so long! As your family grows, you understand that company health insurance, while an excellent benefit to be entitled to is not enough.

FAMILY FLOATER PROTECTION

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Family floater plans in India are designed keeping in mind that it can protect a young family efficiently. Although family floaters allow you to include your parents in the plan, it is always better to cover people much older than you with individual plans and not within the same floater plan. This is because it will drive up the premium and there is a higher chance of the older members using up the floater coverage in large ticket sized hospitalizations than the younger ones by the simple logic of having a higher probability of falling ill.

FAMILY FLOATER FOR YOUR ‘YOUNG ADULTS’

Let’s fast-forward to 20-21 years hence; your first-born is now ready to leave the nest. Armed with his first job, the umbilical chord is now going to be severed finally! You’re proud of how he/she has turned out but are you ready to let go completely? They’re always going to be young and rightful contenders of your protection. How do you ensure that you carry forward this protection even when they graduate to adulthood? Your child is a child in your eyes but to the world and more importantly, to the insurance companies, he/she is an adult. Most of the insurance companies consider the maximum age of children in family floaters as 21. Only some offer protection till 25 yrs old. At this point, you need to move the children to a separate individual policy.

WHAT ABOUT BENEFITS OF YOUR POLICY?

Few logical questions that come to mind: Can you segregate your child’s existing health insurance policies? What about the benefits you accrued in your floater: The No Claim Bonus you earned and the Pre Existing Waiting Period you crossed? Does your child get to extend these benefits to his/her individual policy?

Yes, existing family floater policies can be segregated into individual policies without affecting the waiting period already completed by the family member. The ‘No Claim Bonus’ cannot generally be transferred from a family floater plan to an individual policy.

You can segregate your existing insurance policy at the time of renewal by informing your broker/agent/insurer. You may be required to fill a new proposal form for the segregated members. Some Insurers may also require you to fill a change request form to process deletion of these members from the original policy.

It is sensible to take a separate health insurance cover for kids nearing the age of 20 years. This will help avoid additional formalities required to segregate members later.

To conclude, the best gift that you can give your children (besides your wonderful genes of course!) is the gift of independence. Let them discover the joys of adulthood, as you cheer them on, a proud bystander watching them play the innings of their life. You’ve already done your bit by protecting them from the debilitating costs of unaccounted and unexpected health care bills, if any, by buying them their first individual policy! Now just sit back and enjoy.

The author heads health, accident & life insurance at www.coverfox.com