The steps involved in purchasing health insurance now include an “add to cart” step, where few add-ons are clubbed with the base policy. This, after the base policies are themselves differentiated by various features. Close to 15-20 add-ons and different features are now available to compliment the base policy, either filling an essential gap in service or because of enthusiastic product innovation. The add-on or a feature for which one pays extra premium must be the exact right fit to the policyholder. This process can get complicated by similar-sounding add-ons and features. Here, we group four similar-sounding features or add-ons and delve into the minute differences between them.

Day-care provision and OPD Cover

Day-care procedures and outpatient department (OPD) services do not involve an overnight hospital admission. The former involves a medical procedure, but owing to advancement in healthcare has eliminated the need for in-patient admission. Out-patient care generally refers to consultations with a specialist or a general physician and does not involve a medical procedure.

While strictly not an add-on, day-care procedure implies an inclusion list that will spell out the procedures which are covered up to the sum insured (SI). Policyholders should ideally shop for policies whose inclusions are on a top-down level — department level such as ENT, Dermatological, Orthopaedic, Dialysis, etc, rather than specific bottom-up lists (specific surgeries such as cataracts, dislocation, etc).  One should not be left out on account of medical advances, which can change an in-patient procedure to a day-care setting. Chemotherapy and dialysis are special cases in day-care procedures and policyholders should read specific conditions for coverage. But day-care procedures are subject to the same pre-existing disease waiting clause found in in-patient covers, even for approved procedures.

OPD covers are more likely to be specific add-ons that provide a relative (percentage of sum assured) or an absolute limit (₹5,000, ₹10,000 and ₹20,000) to cover out-patient consultations, follow-up investigations and lab works. OPD covers may not be subject to PED conditions, but the initial waiting period may vary in policies ranging from day one of coverage to 90 days.

Top-up and Super top-up

The two are additional policies that are purchased over and above the base policy. If the medical expenses have gone past a (pre-defined) deductible limit in the base policy, these top-ups are triggered, acting as back-ups for insurance coverage. The deductible limit in top-up plans and their policy term should ideally be aligned to the base policy, where the deductible limit is equal to the base policy SI and are running in tandem. It may also be recommended that both the base and top-up are from the same company to ensure easier coordination in claims processing.

The two are triggered after the deductible limit; but it is corresponding to each individual claim in a top-up plan, and in the case of super top-up plan it will be for the aggregate of claims. For instance, consider two claims of ₹3 lakh and ₹2 lakh on a base SI of ₹3 lakh in one policy term. Assuming a deductible limit of ₹3 lakh, the first claim will be met by the base policy, while a top-up policy will not be triggered in the second claim (as deductible limit is not breached). A super top-up will be triggered in both cases and utilised in the second claim when the base SI has run out.

No-claim bonus and claim protector

No-claim bonus (NCB) is an almost common feature in health insurance, which allows SI to grow to 1.5-2 times base-year SI with increments of .25-.5 times every year when claim has not been made. Claim protector (or protection rider) is an add-on, which not only protects the NCB accumulated over the years, but also covers consumables and inflation risk. Claims up to a defined limit (generally ₹50,000 per year) can be made without disturbing the bonus SI generated until then. The claim will also cover the consumables as indicated by the regulator IRDAI in normal claim payments, including disposables, pharmacy, or surgical tools. Claim protector automatically increases the SI at the inflation (CPI inflation), which provides additional comfort as well. So, while NCB as a feature improves base SI, the effectiveness of the same is improved by the claim protector rider.

Ambulance assistance and personal accident rider

Accidental injuries are covered in the base SI for most policies with some sub-limits on doctor expenses, consultation, procedures or room rent. The ambulance cover can also be part of the base policy with a sub-limit of 1-2 per cent of SI or as an absolute limit of up to ₹10,000 per year. The personal accident rider addresses the same risk from a different vantage point. The rider provides a lump-sum payment, in the event of permanent disability or death resulting from accidents. The policyholder can opt for the rider that helps meet the significantly-large medical expenses involved in the medical care, but on ex-post basis, the event has occurred with a permanent impact on the policyholder and his/her finances.

With a large offering of features and add-ons available, the policyholder can carefully build a health insurance policy that meets their personalised risk profile.

Published on

August 27, 2022