Moneycontrol-SecureNow Health Insurance Ratings help you pick the best insurance policy, depending on your age and requirements.
However, the cheapest policy or the one with the lowest premium is not necessarily the best policy. A good health insurance policy should offer a host of benefits and cover as much of the costs incurred during hospitalisation while reducing personal expenses.
It should offer a short waiting period, features such as outpatient coverage, and incentives for not making claims, among other benefits.
And, it should be low-cost across the years.
There are three broad parameters that Moneycontrol-SecureNow Health Insurance Ratings assesses in determining the ratings: pricing, features and claims.
Pricing (25 points)
Low-cost insurance could be a mirage. Many policies are known to offer cheaper insurance coverage for those in their 30s but become prohibitively expensive by the time they turn 45. Insurers are allowed to revise prices annually after the initial three-year freeze and there’s no cap on premiums.
That’s why we look at premiums for policies with terms of 30 years, 45 years, 60 years, and 75 years, inclusive of applicable GST.
Policies in the cheapest quartile get the highest score of 25, while policies that are more expensive get a lower score.
Features (50 points)
There are six broad parameters assessed in this section.
Room rent and pre-existing illness: A regular health insurance policy pays for all hospitalisation expenses, including pre- and post-hospitalisation expenses.
However, insurers can limit the amount paid in two ways. The first is the waiting period on a pre-existing ailment (also known as pre-existing disease or PED) and the second is the sub-limit on room rent.
A longer waiting period for a pre-existing condition translates into higher personal expenses for the customer in case of hospitalisation during the initial years. This means if the cause of hospitalisation can be traced to a pre-existing ailment, the insurer will not pay the claim during the waiting period. This is often the biggest reason for discord in the settlement of claims.
As per the law, insurers cannot have a waiting period of more than four years, but market practices have evolved to offer a shorter waiting period.
The other clause that reduces premium outgo but increases out-of-pocket expenses on hospitalisation is the sub-limit on room rent. A sub-limit on room rent doesn’t cap the insurer’s expenses on the room alone but also associated costs such as the doctor’s fee, cost of surgery and nursing charges. A cap on the room rent also applies to these associated costs.
Since our endeavour is to find policies that limit the blows of these two caveats, policies with a shorter wait time and without a sub-limit on room rent score the highest. In the case of room rent, policies that cap room rent to a single private air-conditioned room get full marks. Together, these two parameters constitute 20 marks of the 50 for ‘coverage and features.’
Cap on disease-specific costs: Most health insurance comes with a sub-limit in the treatment of cataracts. A sub-limit means the insurer caps the total payout in the case of a cataract. However, with the 2020 health insurance regulations aimed at reducing exclusions, some insurers have widened coverage to include more diseases but added caps.
New rules bar insurers from excluding ailments such as mental health and genetic disorders. In addition, the regulations mandate insurers to cover modern treatments like robotic surgeries and stem cell therapies.
The fallout? Insurers have included them in their coverage, but have now put a cap. For a good health insurance policy, even if the insurer decides to cap advanced procedures, it’s important that there are no caps on illnesses. Policies that cap ailments other than cataracts get no marks.
Co-payment: What’s the point of a health insurance policy if it mandates that the policyholder bears a portion of hospital expenses? This feature called co-payment in an insurance policy requires the customer to pay a certain percentage of the claim. Standardised health insurance policies called Arogya Sanjeevani policies and many senior citizen policies have this clause. Insurance policies that have this feature get no marks in Moneycontrol-SecureNow Health Insurance Ratings.
Restrictive clauses increase out-of-pocket expenses and such policies are rated lower.
However, there are some features that enhance insurance coverage. Accordingly, we have looked at no-claim bonuses, restoration of benefits, outpatient cover and wellness rewards.
No-claim bonus: A no-claim bonus bumps up coverage when the holder doesn’t submit a claim in a year. Such policies score higher if the bump-up doubles insurance cover over a period of time with no claw-back (where the bonus is not taken away) in case a claim is made.
Policies that bump up cover by 50 percent along with no claw-back come second. Policies with a claw-back are rated lower on the list.
A no-claim bonus can meaningfully enhance health insurance coverage.
Outpatient care expenses: Treatment doesn’t always require hospitalisation. While health insurance policies are starting to cover outpatient care expenses, the coverage is not yet meaningful. As of now, this feature has little weightage in our ratings.
While there aren’t many plans that offer blanket outpatient treatment coverage within the sub-limit apportioned for such coverage, there are plans that offer such coverage with limits on the number of times it can be availed. Or they cap outpatient expenses or specialities that are not eligible.
Outpatient coverage is important and once insurers include more meaningful coverage without hiking the premium considerably, Moneycontrol-SecureNow Health Insurance Ratings will increase the weightage of this feature.
Wellness: Some insurance policies reward customers for being fit. They offer points to customers for walking a certain number of steps in a day. These reward points can be redeemed against the health insurance premium or can be used to enhance the sum insured. If these reward points translate into a monetary benefit, the policy gets a full score. Otherwise, it scores zero.
Restoring sum assured: Some policies restore the insurance cover if the coverage is exhausted after a claim is made. This restored cover is applicable for a subsequent claim within the policy year. Policies that come with this feature score high. Those that do not have this feature or restore the sum insured only to cover hospitalisation caused by accidents, score zero.
Claims (25 points)
For policyholders, it’s important that claims are settled swiftly and efficiently. Here, we look at three things:
Percentage of claims settled: The number of claims settled of all claims received. A settlement rate of more than 95 percent scores high.
Claim complaints: This measures the number of complaints per 10,000 claims. Policies with fewer than 15 complaints score high.
Turnaround time: Claims with a turnaround time of less than a month score high.