Major concerns in Health Insurance – Waiting Period and Exclusions

Mr. Sharma, as advised by his financial planner, thought of buying health insurance policy from a reputed insurance company and he was confused whether he is making a right decision in buying such policy.

Why Mr. Sharma is confused for buying health insurance policy?

He and his family are already covered by health insurance provided by the employer.

Mr. Sharma, being lucky, is also covered under corporate health insurance cover provided by his wife`s company.

Obviously, I will also not buy a separate health insurance policy if I am already covered under 2 policies. So, was Mr. Sharma`s financial planner wrong in suggesting him to buy a separate family floater health insurance policy?

Are you facing the same dilemma? I face this question on a daily basis from my clients.

The question is – Why should I buy a separate health insurance policy if I am already covered under corporate cover?

In the last few months, I have convinced approximately 30 new clients to go for it and out of those, 3 clients were denied the health cover by insurance company because of health issues. Would you like to know the reason?

Family floater was denied because wife had thyroid issues, a very common issue now days.

A 30 year old guy was denied health insurance because he has having OCD (Obsessive compulsive disorder). Would you believe it?

40 years old person taking supplements for hair growth was denied health insurance cover.

But believing his financial planner, Mr. Sharma bought the health insurance policy for 10 Lakhs.

Before taking such decision, he had discussed with his friends, colleagues and superiors in regard to the benefits of availing one health insurance policy. He is working in a steel unit as a supervisor and was compelled to work in most uncomfortable atmosphere. Within a week from the date of purchasing the health insurance policy, he suddenly was admitted into a hospital where he was informed that he had been suffering from lung disorder. It was a costly treatment and he was hopeful that his policy would definitely help him in meeting the cost of medical expenses. The total bill for a 15 days treatment was around 3 Lakhs.

However, he was informed that he would not be entitled to claim from this new policy since he had not completed the initial waiting period in health insurance policy as per the terms and conditions of the policy.  Though, he got 1 Lakh from his company as per his corporate policy, balance 2 Lakhs was paid from his pocket.

It makes extremely important for all to have a high value health insurance policy in addition to the corporate health cover provided by the employer. Purchase it at the earliest when you are young & healthy.

Like in any other policies, health insurance policy contains many clauses and conditions and one among such clauses is the “waiting period” and ‘exclusions’

The policyholder will not get coverage from day one of the policy and in order to make any claim over the policy, the policy holder needs to wait for some time known as “waiting period”.

Like any other investments it is the responsibility of the individual to carefully study the terms and conditions of health insurance policy before taking a decision to have one in his name.

What is Waiting Period in Health Insurance Policy?

Waiting period in health insurance policy is the time limit after which the claim over the policy is considered by the insurer. The terms and conditions in regard to the waiting period differ from one insurer to another insurer. During the waiting period, no insurer undertakes to consider any claims over the policy.

The clause has been provided in order to prevent any false claims by the insured. A policyholder who has been suffering from a major disease can avail one health insurance policy without disclosing the facts to the insurer. Once the policy is issued, he can get an admission into a hospital and start claiming the medical expenses from the insurer. Waiting period prevents the insured in making such false claims.

Different types of waiting period in health insurance plans

• Initial waiting period

The initial waiting period may be the first 30 to 90 days from the date of commencement of the policy and during such period the insured cannot make any claims through his policy in case he has been hospitalized. The insured has to wait till completion of the initial waiting period for getting the benefits from his policy. However, claims on account of accident are considered during this initial waiting period.

• Pre-existing disease waiting period

The policy holder should disclose the details of specific diseases he is having at the time of/ before purchasing the policy and such diseases are known as pre-existing diseases and the waiting period provided for such diseases is known as “Pre-existing disease waiting period”. It varies from one year to four years subject to the condition that the policy is covered continuously and the time limit for such waiting period depends upon the medical history of the insured and the insurer from whom the policy is purchased. Again, pre-existing disease waiting period differs from one company to another company.

• Disease-specific waiting period

A specific waiting period known as “disease-specific waiting period” is available for some specific diseases namely; tumor, ENT disorders, hernia, osteoporosis etc., the details of which have been mentioned in the policy. Certain procedures like Knee Replacement are also covered after the waiting period. The waiting period and the details of such diseases vary from one company to another company.

• Maternity benefits waiting period

Some insurance companies provide maternity benefits under the policy wherein the waiting period ranges from nine months to 36 months.

Corporate health insurance

In the case of corporate group insurance provided by your employer, normally such waiting period is not applicable and you are eligible to claim the hospital bill without any difficulty.

There are various factors which affect the waiting period in health insurance policy depending upon the types of policies namely; the group health insurance, the individual health insurance, family floater health insurance etc., Apart from the above, the age of the insured and his medical history also play crucial role for consideration of the benefits under the policy.

Exclusions in Health insurance

Surgeries

Surgeries such as cosmetic and dental surgery normally are not covered in a health insurance policy unless it is required due to accident.

Homeopathy/Ayurveda

Only allopathic treatments are covered in health insurance policies. Normally, homeopathic and Ayurveda treatments are not covered. Few policies cover it but within certain limits.

Hospital costs

There could be some restrictions due to room rent sub limits, doctor fee or procedure fee or ambulance costs etc. It is better to check these exclusions in the beginning. Policies from PSU general insurance companies pay only 1% of the sum assured as room rent and 2% as ICU charges per day. If you are in a big city such limits are not good for you.

Permanent exclusions

There are some permanent exclusion like injuries in war, HIV, intentional injuries like injuries due to suicide attempt, diseases since birth etc.

Health Insurance for returning NRIs

If you are an NRI, you will be having decent health insurance in the country of your residence. But, if your idea is to return to India after retirement, be careful. There is no guarantee that you can purchase a health insurance at the time of your return to India. Life style issues are very common and the chances of getting a new policy at higher ages are remote. The only option is to purchase a high value policy when you are young and healthy. Treatment taken outside India is not covered in these policies. Idea is to ensure decent cover for the post retirement days in India.

 What you should do?

Health Insurance companies are becoming strict day by day in issuing new policies. Insurance is something which you cannot purchase when you really need it. Purchase it at the earliest when you are eligible to purchase it. Also ensure that your parents are also having decent health cover beyond your corporate cover.