Do You Need A High-Value Health Insurance Plan?

By Adhil Shetty | March 27, 2017

Do You Need A High-Value Health Insurance Plan?

The Health Insurance industry is fast adapting to the needs of the demanding consumer by churning out new products to provide coverage to anyone and everyone. You can find basic health plans for comprehensive medical emergencies, fixed benefit plans like critical illness or hospital cash plans, disease-specific health plans, top-up and super top-up plans for enhanced coverage, etc.

The recent trend in the Health Insurance industry has also seen health insurers offering high-value Health Insurance plans. These are regular Health Insurance plans, but with sum assured levels going as high as Rs. 1 crore to Rs. 6 crores – well above the Rs. 2 lakh to 5 lakh cover that most people seek.

High-value Health Insurance plans are very good from a coverage point of view, but do you really need one? As with just about everything, high-value Health Insurance plans have their pros and cons as well. So let’s do a comparative analysis of the merits and demerits of such policies.

Here are some advantages of high-value Health Insurance plans.

They provide more comprehensive coverage

With the rapid development in the field of medical science, healthcare has advanced by leaps and bounds, but so has the expenditure associated with it. Today, certain medical procedures (such as the treatment of advanced cancers) can cost tens of lakhs of rupees.

A moderate-sized insurance cover may not be able to adequately cover such expenses. High-value health plans prove very beneficial on this front. With high sum assured levels, they ensure greater security to you and your family.

High-value health plans have comprehensive coverage features

Another advantage of high-value health plans is the coverage feature, which is quite comprehensive in nature. With low-value health policies, you may miss out on some coverage options, but high-value policies tend to include many more features along with the basic coverage features. You get coverage for AYUSH treatments, maternity expenses, domiciliary hospitalisation, OPD expenses, free health check-ups, daily hospital cash and much more.

Additional Reading: How To Choose A Comprehensive Health Insurance Plan

You can get your international treatments covered

If you frequently travel abroad with your family, this may be a good plan for you. Healthcare expenses abroad can be significantly higher than in India, especially when you consider the multiplier effect of currency exchange rates.

A high-value Health Insurance plan would certainly help if you have travelled abroad to seek treatment not available in India. Low-cover insurance plans also cover international treatments, but a high-value insurance plan may do a much better job of covering your expenses.

On the flipside, there are some drawbacks when it comes to purchasing a high-value health plan.

The premiums are much higher

This is a no-brainer. Since these plans promise a very high cover, the premiums would, obviously, be high. Paying such high premium is usually not possible for average, middle-class customers who are often unsure about purchasing Health Insurance plans to begin with.

These plans are specifically designed for High Net-Worth Individuals (HNI) who have a larger disposable income and can afford a higher premium.

Despite high costs, long waiting periods still apply

While it is true that high-value plans provide a comprehensive coverage option, they also come with common exclusions found in other Health Insurance plans. Even the waiting period for pre-existing illnesses isn’t any lower in these plans, as it ranges from two to four years.

Additionally, a pre-entrance health check-up is required, and in case an ailment is discovered it might be excluded from the plan’s coverage.

These plans are offered after strict underwriting

All Health Insurance plans undergo underwriting formalities, but when it comes to high-value plans, the underwriting is more stringent. There may also be a co-pay clause, sometimes as large as 20% in some cases, for senior citizens.

Do you need such high-value plans?

It all comes down to one thing – affordability. While the coverage provided by these plans cannot be contested, the premiums charged are equally relevant.

For example, insurers like Max Bupa, Religare, Cigna TTK, etc., provide covers that range anywhere between Rs.50 lakh and Rs.1.5 lakh. For a family of three, with the oldest person being 30 years old, the premium would be approximately Rs. 46,000 per year, which is certainly affordable.

However, unless you are a high net-worth individuals (HNI), affording a high-value Health Insurance plan would be quite difficult.

On the contrary, if you’re not an HNI and you still want a higher cover, you can always choose top-up and super top-up plans to enhance your Health Insurance cover at a lower premium outgo.

Additional Reading: Rising Medical Costs? Opt For A Top-Up Insurance Plan

In closing, while high-value Health Insurance plans are certainly attractive, it is important to understand the merits and demerits of these plans, and carefully ascertain your financial position, before you make a decision to purchase one.

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About Adhil Shetty

Adhil Shetty is the Founder and serves as the Chief Executive Officer of BankBazaar.com. Adhil has a Master’s degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelor’s degree in Engineering from the College of Engineering Guindy, Anna University. Adhil is an expert in Personal Finance (Car loan/Home loan and personal loan) and he majorly consults on investment and spends rationalization for the Indian loan borrowers. His guidance is number based with real time interest rate calculations and hence useful for consumer’s real time query.

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