November 2018 - CAGRfunds

November 30, 2018

Do health insurance plans cover maternity expenses?

“Maternity Plans” are not really separate plans. It is a feature which may be covered under normal health plans. However, only a few health plans offer maternity cover as part of their normal health plans.

Key features of maternity cover are as follows:

There is usually a separate waiting period for maternity coverage – This means that any claims with respect to maternity will be catered to only after the maternity specific waiting period is over
Almost all plans have an upper cap on the amount of expenses that will be covered – Usually the coverage ranges from INR 25000 – 50000 per delivery. The reason most policies have an upper cap is because the number of claims for maternity is likely to be very high. The purpose of Health Insurance is to protect you from any sudden outflow of funds due to a medical emergency. The occurrence of maternity is almost certain and hence a limit on the same is warranted
Pre – maternity costs are generally not covered – Most plans which offer maternity coverage generally do not cover any expenses that are incurred towards consultancies and tests
New born coverage – Generally, the new born baby is covered till the end of policy year

Should you buy a health plan only because it provides maternity coverage?

Maternity should ideally be treated as a bonus option. The overall decision behind buying a health plan should ideally be the key features which are relevant for any kind of hospitalization. Imagine a plan providing good maternity coverage but having a claim settlement ratio of 70%. Therefore, choosing a plan just because it provides maternity coverage may not be the best decision to take.

However, in case you have a choice between two equally good plans with one of them providing maternity coverage with or without some extra premium, then it might make sense to take the plan with the maternity clause. Especially, if you are planning a kid in next few years.

Want to discuss more on maternity plans? Write to us on contact@cagrfunds.com.

Have you read about our Cancer Plans?

November 30, 2018

Cancer Health Plans may be useful to consider!

A slew of niche healthcare plans have been launched recently. These plans cater to specific diseases only. Cancer Plans are one such category.

Key features which are common across various Cancer Plans are as follows:

Objective is to cover the expenses that arise out of diagnosis of any type of Cancer
Benefits are generally payable in parts basis the different stages of Cancer

Why should you buy these plans?

Well, there is no good answer to this. As we know, occurrence of Cancer is random and anyone could be a victim of the same. Some of the facts are worth being aware of:

India is the world’s largest contributor to Cancer deaths
22 lakh Cancer deaths are reported every year
71% of the Cancer deaths occur in the age group of 30 – 69 years
15% of Cancer patients are children and young adults (as compared to the global average of 0.5%)

The geographic spread of Cancer in India is largely driven by the environmental practices prevailing in respective regions:

States	Common types of Cancer	Reasons
UP, Bihar, WB	Gall Bladder, Neck and Head	Polluted water, diet rich in animal protein or fish
MP, Bihar, Gujarat, Rajasthan	Oral	High Tobacco and Pan Masala consumption
Punjab, Haryana, Delhi	All Cancers are higher than average, especially, kidney, lungs, urinary, breast	Pollution, pesticide, toxins in food
Goa	Colon Cancer	Red Meat, Alcohol, Tobacco
WB	Lung, Urinary Bladder	Air and Water Pollution
North East	Highest Cancer Rate, especially of Oesophagus	Tobacco, Household burning of Firewood
South & Coastal India	Stomach	Diet rich in spice, salt

Is Cancer not covered in regular Health Insurance Plans?

Regular health plans do cover hospitalization for Cancer. However, Cancer treatment costs often cost anywhere between 10 – 25 lacs and only go upwards for advanced treatments. Health Plans with such high sum insured can turn out to be very expensive.

Moreover, Cancer treatments tend to continue for years and the costs have only been rising.

What about Critical Illness covers?

Cancer is also covered under Critical Illness Plans, but only at advanced stages where a lump sum is payable. Generally, most Cancer specific plans tend to pay lumpsum at multiple stages of diagnosis, thereby protecting the continuous flow of expenses.

What is the alternative?

A decent size of Base Insured Plan + A large Top Up Plan + Critical Illness may be a good alternative. However, for those who have had a first – hand experience of Cancer treatments among friends and family, might want to insure themselves against the deadly possibility. The decision depends on affordability of every individual.

Everything about Top Up Health Insurance Plans

What are Top Up Plans?

Also known as Deductible Plans, Top Up Health Plans provide a cover over and above a certain base cover. This base cover in most cases come from existing policies. Some Top Up Plans allow deductible options even without an existing insurance policy.

In cases where there is an existing insurance policy, reimbursement against any claim that arises will first be made out of the existing policy. The liability of the Top Up Plan arises only after the set threshold of the existing plan has been exhausted.

In cases where there is no existing policy and the Top Up Plan permits such a situation, expenses up to the threshold level has to be borne by the insured out of his or her own pocket. The liability of the Top – Up Plan arises only after the set threshold has been exhausted.

Example 1:

Ajay has a health insurance cover from his employer of 8 lacs. He purchases a top up plan for 10 lacs with a deductible of 3 lacs. An unfortunate event of hospitalization generates a claim of 9 lacs. Ajay can use either of the following options:

Option 1: Raise a claim of 8 lacs against the employer health plan and balance 1 lac against the top up plan

Option 2: Raise a claim of 3 lacs against the employer health plan and balance 6 lacs against the top up plan

So basically, the top up plan gets activated only when the deductible threshold is crossed.

Example 2:

Vijay does not have any existing health plan except a top up cover of 10 lacs with a deductible of 1 lac. He gets hospitalized and has to raise a claim of 3 lacs. In this case, Ajay will have to pay the initial 1 lacs from his own pocket and the Top – Up Plan will consider only balance amount of 2 lacs for claim settlement.

Why are Top Up plans useful?

These plans are useful for two simple reasons:

A high coverage is available at a significantly low premium
In an event of a medical emergency where the amount of expenses tend to spiral beyond the usual ranges, these plans come to rescue

Who should buy Top Up Plans?

Salaried people who have a basic corporate cover – Smaller hospitalization claims can be covered by the corporate cover and in case of larger expenses, Top Up Plans can be utilized. This also means that post retirement, claims up to the deductible amount will have to be either self – funded or funded through a Base Insurance Plan. However, since deductibles are pre-decided, the same can be set aside as an emergency fund.
Salaried people who plan to change jobs or start on their own – Top Up Plans are an excellent option in this case. The cover and the low cost premium continues irrespective of whether you are salaried or get into entrepreneurship.
People who have sufficient resources for covering up small ticket emergencies – These people can leverage the low premium Top Up Plans to cover themselves for any eventualities
People who have a Base Insurance Plan with a basic cover amount of 5-10 lacs – In cases of severe medical emergencies such as complicated surgeries, the amount of expense usually shoots beyond the normal cover that we usually have. Especially if the treatment is being carried out in one of the plush city hospitals! A Top Up Plan is the umbrella for such unannounced rainy days.

Which are the best Top Up Plans?

Most Insurance Companies now offer top Up Plans. However, one has to select the plan which has the most suitable features and has a low premium. Email us on contact@cagrfunds.com to ask us for the best Top Up Plans.

Why should people with Corporate Insurance cover still have a separate health plan?