Buying health insurance – Comparison of 5 plans

Protection is an important aspect of every financial plan. This happened primarily via insurance products including term, health, accident & disability, etc. The one aspect that needs to be touched upon is the Health Insurance.

Now, I thought investing in mutual funds was a huge problem for you and me. Turns out I was so wrong. Buying Health Insurance is a much bigger pain. I don’t know which planet did the creators of health insurance products come from but they have succeeded in scaring the hell out of us.

When the plans are presented to common janta like you and me, all I can feel is my head spinning.

Room rent capping, disease wise sub limits, waiting period for specific diseases and pre-existing diseases, co-payments, domiciliary hospitalisation, organ donor, emergency ambulance, renewals, no-claim bonus, refills, super top ups, top ups, vaccination, ….(stop for breathing…), how many things one needs to look at before deciding what makes sense?

I agree that there is a ton of useful material out there that already details what you should look for in buying health insurance. Even after going through those super helpful guides the evaluation of health insurance plans is simply no fun.

Anyways, after much dilly dallying, I decided to first take the bull by the horns in early 2017. I am now presenting the updated list.

What was I looking for when buying health insurance?

I already hold a family floater policy (covers 2 of us) with a sum insured of Rs. 5 lakhs from a PSU. The policy has been in force since 2007. But it has several limitations with respect to what you can do with it and how you can use it.

I am now looking for a health insurance policy that would give me similar cover without binding me with unnecessary terms and conditions of sub-limits, room rent capping, co-payment, etc.

One may not be able to escape all the jargon and the Terms & Conditions, but the fewer they can be, the better it is.

I had to look at various companies and their offerings. I got in touch with a few of them. The people I spoke to, I must admit, were good. I was more informed after my conversations.

I used all the chats and the literature I read to prepare a comparison of 5 of those plans. In the table below, you can see their comparison against some critical parameters.

Buying Health Insurance – Comparison of 5 plans

The parameters are applicable for Rs. 5 lakh floater policy for 2 people of age – 38 years. You can go for a higher cover too, but this in my opinion, is the minimum you should have.

*In Religare and Star, if you take a policy after 61 years of age, 20% co-payment is applicable.

**In Max, 20% co-payment has to be made by Zone 2 customers (basically those living in non metro cities). You get a 10% discount on premium for this.

***Restore is for Apollo, Refill is for Max, Auto Recharge is for Religare, Reload is for Royal Sundaram – functionally all are almost the same. Except for Apollo, the Restore option gets triggered only after the Sum Insured and the Bonus is exhausted.

#The insurance companies say that there is claim based loading of premium, that is, if you make a claim or develope a disease, the company may not increase premium for that reason. But the policy terms and conditions clearly specify that they could do risk based loading and the user has the choice to continue or not.

~In case of Star, the single standard room is available only for covers of Rs. 5 lakhs and above

In case of Royal Sundaram, 15% discount on premium is available for customers in Zone 2 (as defined by the company).

Note: The premium would change for change in sum insured, no. of people covered, age of the insured, other benefits sought, etc.

Here are some pointers to make sense of the table:

1. All the policies have practically no capping or sub limits on room rents or specific diseases. This removes the biggest hassle. I need not look at the hospital’s menu card every time and decide what I want to have or not. When it comes to medical attention, I want no compromises. None at all.

2. There is no co-payment required to be done ever. My claim would be fully reimbursed. Only in Max’s case, it you are not from a zone that they have specified, there could be a 20% co-payment.

3. One of the most important features of all the 3 policies is the Restore/Refill/Recharge. What it means is that if I exhaust my Sum Insured in any year in a claim, the insurance company will restore/refill/recharge the policy for the full Sum Insured again. But it cannot be claimed for the same illness by the same person again in the same year. It can only be used for a new illness or by the other insured person.

4. The No Claim Bonus is earned at the end of a year if you have not made any claims on the policy. It is very attractive in the case of Apollo. In case of Religare, they have an option of Super No Claim Bonus which can take your cover higher by 150% over 5 years. This comes at a slightly higher premium. Royal Sundaram in its Lifeline Supreme option offers 20% NCB every year (till 100% of Sum Insured).

5. Renewability is assured life-long by law. So, that is not the concern.

6. You can port your existing policy to any of these insurance plans and also carry forward any benefits that you have accrued so far. Porting can happen only before 45 days of the next premium due date.

7. The biggest difference is in the premium, with Star coming across as the most expensive and Religare the cheapest. However, if you are from Zone 2 as defined by Royal Sundaram you get a 15% discount on the premium which could make it close to Religare’s. .

8. As you can see I have not included coverage of network hospitals in the comparison. Most policies have a wide network of hospitals. In this case all the 3 claimed to have over 4000 hospitals, pan India, in their network. However, it would be great if you could find out which hospitals closer to your area are part of the company’s network. They are what you will likely use the most.

9. There are other parameters like organ donation, emergency ambulance, vaccination against animal bites, etc. but again I would not consider them critical inputs to make a selection for buying health insurance.

So, which policy should you go for?

Given all the features and differences, I tend to gravitate towards the Royal Sundaram Lifeline Supreme Option. It fulfils almost all the criteria I am looking for with a reasonable premium.

By the way, which of the above 5 policies works for you the most?

Do share your feedback and inputs including your experience with the insurance claims process.