One shortcoming of the standard health covers is it does not cover outpatient or day care expenses unless they are related to treatments for certain critical illnesses. That apart, since premiums for a Rs 3-lakh cover hover at around Rs 3,000-4,000 a year for an individual in the age group of 18-35 years, a regular health insurance policy does not help exhaust the Rs 15,000 deduction limit that section 80 D of the Income Tax Act permits.

To take advantage of the unutilised tax breaks, some health insurers - like Apollo Munich, ICICI Lombard and Max Bupa - have come out with plans with higher premiums that extend cover for outpatient, and in some cases maternity, expenses. "But we have seen prospective policyholders opting for such products for the benefits they offer and not merely from the tax-saving perspective," insists Shefali Chachhi, director, marketing, Max Bupa.

How do these work?

Like regular plans, all hospitalisation-related expenses are covered, including pre-existing illnesses, after the specified waiting period - generally up to two years, during which claims cannot be made - draws to a close. Unlike the standard mediclaim policies, these covers also have a provision to pay for planned medical expenses or those that do not necessitate 24-hour hospitalisation - for instance, dental treatment, pregnancy-related expenses, diagnostic tests and pharmacy bills. After producing the requisite bills as well as other proofs and the claim being approved, the insurance company will reimburse the amount spent by you, subject to the sub-limits built into the policy.

Choose your policy carefully

If you see value in such policy offerings, you need to make sure you choose the right one by going through the list of exclusions - that is, the expenses that are not covered - and sub-limits applicable to the ones that are admissible. For instance, Max Bupa offers coverage for maternity expenses only under its family floater plans - after a two-year waiting period - while Apollo Munich's Easy Health-Individual plan's premium variants offer a cover of Rs 15,000-40,000 after a waiting period of six years. Therefore, if maternity benefit offered is a key criterion while taking a call, you need to take this aspect into account. Likewise, if you are keen on claiming OPD expenses, then the companies' basic plans may not be apt for you, as the cover is provided only under their premium variants.

Also consider sub-limits

ICICI Lombard's Health Advantage Plus plan does not offer a separate cover for maternity expenses. "Our policies do not cover expenses related to maternity hospitalisation. However, any expenses incurred pertaining to ectopic pregnancy are covered under the policy. In addition, any expenses prior to hospitalisation like scans, regular doctor check-ups, tests - as prescribed by the doctor - can be claimed to the extent of OPD expenses limit," explains Sanjay Datta, head, health insurance, ICICI Lombard. Similarly, you need to take a look at sub-limits, too. The maximum limit on maternity benefits under Max Bupa's policies ranges from Rs 20,000 to Rs 1,00,000 - Rs 2 lakh and Rs 50 lakh being the corresponding overall covers - depending on the variant chosen.

Under ICICI Lombard's individual plan, an insured in the age group of 19-35 years will have to pay an annual premium of Rs 15,000 to obtain a cover of Rs 3 lakh under which the OPD sum insured will amount to Rs 8,800 per year.

Should you go for it?

Perhaps yes, if you are unwilling to let go of the opportunity to fully utilise the tax benefits under section 80 D. However, a word of caution here. It is a given that policies that offer covers like OPD and maternity benefits will be costlier than the regular policies, even considering that you obtain reimbursement to the extent of sub-limits. Instead of shelling out the additional amount, you could consider parking the same in your bank account.

"If you can afford higher premiums, you should rather go for a higher health cover. OPD expenses can be met out of the pocket," suggests financial planner Gaurav Mashruwala. A higher cover will enable you to avail of enhanced sub-limits. For instance, if hospital room costs are capped at, say 1%, of the total sum insured, a larger cover will ensure a room with better amenities. As for maternity benefits, many corporate group policies offer maternity covers, which means that if you or your spouse are covered under one, buying a stand-alone policy merely for the sake of claiming maternity expenses may not make great sense.

Remember, the primary purpose of buying a health policy should be to enable you to meet any unexpected illness or accident-related expenses without straining your finances.

Source : http://economictimes.indiatimes.com/