Author: Anand Prabhudesai

8th November 2016 was a historic day in the Indian economy with the Government banning the use of Rs.500 and Rs.1000 currency notes with immediate effect. For people hoarding black money, it was a Black Tuesday while for the common masses it was chaos. Lack of understanding of the effects of the changed regulation resulted in chaos and anarchy everywhere. Closer home I saw panic grip my family when my grandfather’s health worsened and we had to hospitalize him. Though we had enough cash resources at our disposal we didn’t know whether our now useless cash (since it was in denominations of Rs.500 and Rs.1000) would come to any use. Panicking and restless, we rushed to the hospital which declined our mode of payment (cash). Fresh out of options, we went to a Government hospital which was accepting cash payments and got our grandfather treated.

In this entire episode you might be wondering what happened to our health insurance policy?
Well, we had a policy but the claim payable was on a reimbursement basis. It meant that we had to bear the cost ourselves and later get the same reimbursed from the insurer after submitting the hospital bills. All this time, this clause never hurt our family because we always had spare cash for such emergency situations. But, yesterday’s unique circumstances made it unusable!

Was there an alternate solution to this emergency my family faced?
Yes, there was and it is called ‘CASHLESS HOSPITALIZATION’.

What is cashless hospitalization?

A common feature of most health insurance plans, cashless hospitalization enables policyholders to seek medical treatments at hospitals which are tied-up with the insurer. The medical bills are directly settled by the insurance company and the policyholder is spared the burden of shouldering the medical bills himself.

Why is it important?

Let us start with what happened right now when my family temporarily lost access to cash, and a medical emergency came up. There are many other reasons as well when you may not have immediate access to large amounts cash when it’s most needed. Simply, banks may be closed that day or you may be traveling out of town at the time of hospitalization. You may have just used up your saving for something else or god forbid you may have hit the hard times in your job or business. At such times, the cashless benefit can take care of your major health expenditures, and spare you the stress of arranging for large sums of money in a short time.
You should ensure that the health insurance plan you choose has cashless benefit for another important reason. Without the cashless benefit, you will first have to pay the bills yourself and then reimburse the amount by filing a claim with the insurer. As such, our finances are depleted and are restored only when the claim is admitted (which takes some time). Cashless hospitalization, on the other hand, does not involve our finances at all. The bills are settled directly and we don’t have to drain our savings for meeting them. Thus, they are convenient and hassle-free.

The final word

The recent demonetization action by the government is reminder to us that life is full of uncertainties and its best to be prepared. Having a health insurance plan with cashless benefit is an essential part of this preparation. Nowadays there lots of options for health insurance at price points starting as low as Rs. 2,000 per year. Just make sure that you choose a health insurance plan from these options it offers the cashless benefit at hospitals that you would like to go to. Turtlemint can help you figure that out. So let’s go cashless now, and fear not the day when money ends!

Read more about What is Health Insurance

Read more about  An anatomy of an health insurance plan

Read more about Dejargonizing health insurance terms

How secure are you with your regular health insurance plan?

Your regular health insurance policy may not be enough to cover your future medical expenses. With rising costs of quality healthcare, the coverage provided by your policy may fall short and you may be forced to dig into your personal savings. You may choose to buy another regular policy, but that is expensive.

How can you increase your health coverage without the need to buy an additional policy?

The super top-up plan is the answer!

A super top-up plan provides you additional health cover at a fraction of what you will pay if you buy another health policy. A super top-up plan comes into picture when you’ve exhausted your claims up to a threshold limit. And this works even when you exhaust your threshold limit after combining the costs of multiple treatments in a year. Let’s understand it with an example.

Suppose you have a super top-up plan of INR 10 lakhs with a threshold limit of INR 5 lakhs, which you can claim through a regular health policy.

Scenario 1: You are hospitalized and your medical expenses are INR 3 lakhs.

You can claim 3 lakhs from your regular health plan.

Scenario 2: You are hospitalized again, in the same year, and your medical expenses are INR 5 lakhs.

You can now claim only 2 lakhs from your regular health plan. The super top-up plan will cover the remaining 3 lakhs now.

Also read how to lower your insurance premiums

Sounds perfect, right? Now let’s look at all the advantages of buying a super top-up plan.

Why should you opt for a Super Top-Up Plan?

• In the last 10 years, the costs for medical treatment have increased by more than 50%. The cover provided by basic health plans may not be sufficient. Super top-up plans help to deal with the growing medical costs and inflation.
• You don’t need to have an existing health policy to buy a super top-up plan. You can pay up to your threshold limit out of your own pocket and then use the super top-up plan, to pay for the rest of the expenses.
• A super top up gives more cover to the existing policy, especially with growing health needs of the family with kids and dependent parents.
• Covers multiple treatments and considers the total of all medical bills in a policy year for the threshold limit.
• Buying super top-up plan is much economical as compared to regular health plans, if you want to upgrade your health cover. For example, if a couple aged 45 years, have an existing health policy of Rs. 5 lakhs, and they want to increase the cover to Rs. 10 lakhs, then a super top-up plan with a threshold limit of Rs. 5 lakhs will work out to be around 35% cheaper than another health policy of Rs. 5 lakhs as per the following table:

• You can purchase a super top-up plan from a different insurer than your current one. The claims process is easier though, with a single insurer.
• Additionally, a super top-up plan:
  • Is available as both individual and family floater policies.
  • Is eligible for tax deduction under Section 80D.
  • Allows cashless treatment at insurer’s network of hospitals.
  • Requires no medical check-up till the age of 55yrs, for pre-acceptance.

Super top-up plan is therefore, the best way to cover all your medical expenses during the year, that too at a lower premium. Buying a health policy, however, should depend on the coverage provided keeping in view the inflation in costs of medical treatment. If you need to compare and understand the benefits of a variety of good super top-up plans, you may refer to these plans by visiting the health insurance page on our site.

Read more about Separate health insurance plans for parents or floater?

Read also An anatomy of an health insurance plan

Check out our video to understand what is a top-up and a super top-up?