Health cover should be at least 50% of your annual income

Published in Mint on 6th Jan 2015, Written by Abhishek Bondia

How much insurance is needed to cover my entire family?
—Danish

The right amount of coverage depends on the kind of hospitals you prefer, age and health conditions of your family members. Healthcare costs vary significantly by hospital and the facilities opted in a particular hospital. For example, the cost of a knee replacement surgery almost doubles if you use an imported implant instead of an indigenous one.

So quantum of health cover is closely linked to your income and lifestyle.

Do keep in mind that medical inflation is high at over 10%. The cover you buy today should be sufficient for the future as well. There are two rules of thumb. First, take health cover of at least 50% of your annual income. Second, the insurance cover should at least cover the cost of a coronary artery bypass graft in a hospital of your choice.
I recommend a minimum health cover of Rs.5 lakh. You can use the same sum assured as a floater to include your family members.

What can I do if my insurance claim is rejected?
—Lalitha Nambiar

An individual insurance policyholder has multiple forums for appeal in case of claim rejection. Typically, my first port of call is to escalate within the company itself, i.e. head of claims or underwriting or sales, depending on the reason for rejection. If this does not work, I will write to the grievance cell within the company. The response of the insurer’s grievance department becomes the basis of complaint with the grievance redressal cell of the consumer affairs department within the Insurance Regulatory and Development Authority of India. You can also move straight to the insurance ombudsman and thereafter to the consumer court.
In our experience, most claims that are rejected incorrectly get sorted when escalated within the insurer. Such claims had been initially rejected because of an aggressive interpretation of the rules or inappropriate application of judgement.

I have been staying in the UK for the past 10 years. I have a mediclaim policy in India for the past six years. I have been regularly renewing the policy. I want to know that since I don’t stay in India, can I get mediclaim coverage?
—Rajesh Singh

Yes, you can buy a medical insurance from India even if you are a non-resident Indian (NRI). However, the claims are admissible only when the treatment is done in India and the claim is settled in local currency. The benefits and process remain the same irrespective of your residency status.
Not all insurers issue a policy to NRIs but many do. Insurers develop their own internal underwriting guidelines about covering foreign citizens and NRIs. In this regard, I would recommend you to share this information with your insurer so that at the time of claim, non-disclosure is not made the basis for claim rejection.

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