Covernote. Pay as you go. But pay!

Options, choices, flexibility, freedom. Sweet words customers want to hear. More and more of these have been made available in insurance policies over the last few years.

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Health insurance penetration still low

Hospitalisation cover has come a long way from the one-size fits all days of the 1980s and 1990s. Not only coverage and scope, servicing and ease-of-use of the policy have made huge strides on the back of consumer demand, information technology use and a competitive environment.

Monitoring by the regulator has also contributed significantly to standardisation of coverage, terms and conditions, terminology, treatment protocols and introduction of service providers such as claim-settling agencies (Third-party Administrators-Health Services) and a system of ‘network hospitals’ where favourable rates are negotiated by insurers and cashless-claim settlement can be provided in that framework.

• Also read: Health insurance policy: Focus on essentials

Let us in this and the next few instalments of Covernote see a few interesting, new options in hospitalisation policies that were not available or pretty hard to come by in the past.

Instalment premiums are a very interesting new facility. Inspired by the financial situations created by the pandemic crossing paths with the gig economy, this feature resulted from a push given by the regulator.

Earlier, there was only annual premium and then came multi-year policies with a discount for paying up two or three years premium upfront with the promise of a price guarantee!

The market, especially a developing market like India with its massive demographics, begs segmentation. And so came instalment premium.

Companies offer monthly, quarterly and half-yearly premium payment for health policies now. It comes with its own terms and conditions. While you have a grace period, remember you will be without coverage until you actually pay up.

• Also read: Choose a health cover that protects your wealth

Making claims

That is, you cannot make a claim for any hospitalisation in the interim period. The grace period is typically seven days for monthly instalments and 15 days for quarterly and half-yearly instalments.

Should you fail to use the grace period, your policy will lapse and no claim can be preferred after that at all. It’s especially suited for young gig workers or families with stretched monthly budgets that cannot accommodate an annual bullet premium amount.

• Also read: Health insurance: why you must play it safe

As they say, with freedom comes responsibility and this responsibility towards yourself and your family’s financial security in the face of health-care expenses is grave.

(The writer is a business journalist specialising in insurance & corporate history)

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