We are a 75 year old couple and have a mediclaim policy ₹4.5 lakh from a PSU insurer. Coverage has remained unchanged for the past 10 years and has continued for 30 years without any claims. There has been no illness or disease. My wife has asthma problems due to dust smoke. Should we transfer our policy or add a new policy?
– Name hidden on request
Most health insurers apply an upper limit for a no-claim bonus (NCB). In your case it is likely that the insured amount was basic ₹3 lakhs. The maximum that the NCB was allowed to accrue could have been 50%. That is why the total insured amount is capped ₹4.5 lakhs. However, at your age, this sum insured is completely inadequate. Consider increasing the sum insured to a minimum ₹10 lakhs. The rule of thumb is that health coverage remains equal to annual income.
There are three possible ways to increase your coverage. The easiest option may be to ask your existing insurer to increase the sum assured in the same policy. Insurers usually take these requests into account when renewing policies. Since you have no past claims history or pre-existing illness, the incumbent insurer should be willing. However, if the policy has limits such as room rent or illness limits, then it would also apply to the increased sum assured. So even though the sum assured would increase, the other conditions would remain the same. The other aspect is that these old plans are generally expensive. In some of these plans, the sum assured comes at a high price. You should compare the incremental cost of increasing coverage in this plan versus the other two options below.
Another option is to take out additional health insurance. With your clean health history, it should be possible for you to get a new plan. Then choose a deductible of ₹3-4 lakhs. Claims up to the deductible would be affordable under the current plan. Any claim in excess of the deductible would have to be paid under the supplementary plan, up to the sum insured. Top-up plans are generally cheap.
The third option requires some paperwork. You can transfer your existing subscription to a new insurer. This allows you to transfer all your expired wait times to the new plan. There would be no waiting period for pre-existing diseases or specific ailments. Given this context, the number of insurers willing to issue a policy would be limited.
The new insurer may require a declaration of good health from you and in some cases even ask for a medical examination before the policy is issued. Despite the process, this approach may still be most appropriate if the current plan has major limitations.
For example, many old plans have a limit ₹50,000 to ₹1 lakh for modern treatments. Given the increasing number of claims under modern treatment, such a limit may prove to be very restrictive in the future. Likewise, if the new plan is significantly cheaper, it may be worth it.
(Abhishek Bondia is Chief Officer and Director at SecureNow.in.)
