Add-on plans are better than having two health policies

Published in Mint on 24th March 2015, Written by Abhishek Bondia

My car was slightly damaged in an accident. Should I make a small claim or wait to avail the no-claim bonus?
—Aakash Tripathi

You should lodge a claim if the potential claim receivable is more than the no-claim bonus. Typically, if the car is carrying a multi-year no-claim bonus, premium increase after a claim year can be up to 50%.

The potential claim amount is arrived at after a few standard deductions from the loss amount. Some of these are minimum excess, consumables and depreciation. Based on the specifics, an insurance adviser or an auto mechanic will be able to advice on the potential claim amount.

If it is a relatively new car—less than three years old—you should evaluate some add-ons that help overcome such dilemmas. An add-on called “NCB protector” is offered by several insurers. With this you can make a specified number of claims in a year and still carry forward the no-claim bonus. Other add-ons such as zero depreciation and consumables cover will help you avoid the deductions and increase the potential claim amount.

I am 40 years old and have a family floater policy of Rs.5 lakh. I want to get further coverage for accidents that may occur while pursuing adventure activities. Should I expand the existing policy or take additional riders?
—Heena

Ideally you should enhance the sum assured within your existing policy. If not, you should purchase a top-up insurance plan. These plans are cost-effective ways to enhance your coverage. You can take a top-up plan with a Rs.5-lakh deductible. The first Rs.5 lakh expenditure will be covered under your existing plan. Any expenditure above this will be paid by the top-up plan. Health insurance plans will cover hospitalization for any reason, not necessarily restricted to those related to adventure activities.
The cost of two standard health insurance policies combined is very expensive with limited advantages for the user.

I am going to leave my company in the next six months. Can I convert my group plan into an individual plan?
—Arunoday Sahay

Yes, you can convert your group plan into an individual plan. The duration for which you were covered under the group plan will be waived from the various waiting periods of the individual plan. However, you can port the waiting period waiver benefits only to an individual plan of the same insurer, and the price and benefits such as room rent applicable henceforth will be of the standard individual plan.
Also, only the duration covered with the same insurance company will be considered for waiting period waiver.
In case the company changes its group insurer frequently, then porting to an individual plan will not have much value.

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