Faced with an illness, you often fall back on your income. And when that isn't sufficient, then medical compulsions force you to nibble at your capital.

And even that may be insufficient. That's why a Mediclaim policy has become de rigeur for Indians.

It covers the reimbursement of hospitalisation and unsupervised treatment at home in India for illness, disease or accidental injury. It is a safeguard against heavy medical expenditure.

Now, who can avail of this policy? Anybody between five and 80 years. It also covers children between three months and five years, if at least one of the parents is covered concurrently.

The cover is for expenses up to the sum insured. This could be the room and boarding expenses as provided by the hospital or the nursing home; nurse, surgeon, anesthetist, medical practitioner, consultants or specialists' charges; cost of anesthesia, blood, oxygen, operation theatre, surgical appliances, medicines, drugs, diagnostic materials, X-Ray, dialysis, chemotherapy, radiotherapy, pacemaker, artificial limbs and many more.

This does not mean that any establishment qualifies for reimbursement. The hospital or nursing home should be either registered with the local authorities or under the supervision of a registered medical practitioner.

Alternatively, it should have at least 15 (10 in class 'C' towns) in-patient beds, and own an operation theatre and employ fully qualified nursing staff and doctors in attendance round the clock.

If hospitalised, it has to be for a minimum of 24 hours. This limit does not apply to dialysis, chemotherapy, radiotherapy, eye surgery, dental surgery, kidney stone removal, tonsillectomy, and many more. It also covers domiciliary or home treatment for more than three days.

Take Care -- No cover

Scrutinise the literature for the domiciliary benefits. The contract mentions a host of specified diseases which Mediclaim does not cover.

But full cover is admissible for dialysis, chemotherapy, radiotherapy and the other above mentioned treatments, even if the insured is discharged on the same day.

If you have been suffering from a disease or any of its accompanying complications while taking the policy, it will not be covered.

Premium rates

The minimum sum insured is Rs 15,000 and in multiples of Rs 5,000 thereafter with a maximum of Rs 500,000. The premium depends on the age and the amount insured.

A family with dependent children or dependent parents is eligible for a 10 per cent discount on the total premia.

Besides, they are also eligible for a Rs 10,000 deduction u/s 80D. The ceiling is higher for a senior citizen at Rs. 15,000 and it offers no cover for children.

The amount insured under the policy will progressively increase by five per cent for each claim-free year of insurance. This is subject to the maximum accumulation of 10 claim-free years of insurance.

Medical checkup costs will be reimburesed at the end of a block of every four underwriting years, provided there are no claims reported during the block.

Third party administration service (TPA)

Till recently the policyholders had to first pay the hospital charges and then apply for the reimbursement.

Now the introduction of TPA has eliminated the inconvenience of raising large sums at short notice and also the uncertainty of non-settlement of the expenses at a later stage.

The insurer has identified a network of hospitals in major cities and also appointed administrators for the purpose. It will issue an identity card to all policyholders.

In the case of planned hospitalisation, the policyholder should get a pre-authorisation form filled up by the doctor recommending hospitalisation and submit it to an  administrator at least four days before he is admitted.

The administrator will send an authorisation letter indicating the name of the insured, the hospital where treatment is required, the nature of illness and the monetary limit up to which the cover is available. The hospital will then commence treatment.

What happens if you have a non-photo identity card? Make sure you carry some identification documents. Some network hospitals may charge a registration or admission fee which is not reimbursable under the policy.

Register with the hospital well in advance. In case of emergency hospitalisation, the network hospital will contact the administrator and request for authorisation.

A request for authorisation for cashless access may be declined if the disease is not covered by the insurer or the applicant does not have adequate insured amount left to cover the hospitalisation costs.

Whenever there is a dispute, approach the administrator for settlement after paying up directly. You can then send the filled claim form to the nearest administrator's office within seven days from the date of completion of treatment backed by relevant original documents.

If a policyholder is admitted to a non-network hospital, then the hospitalisation bills will be reimbursed after discharge depending on the terms, exclusions, conditions and limitations of the policy.

Pick your choice

The above procedures apply to companies under the General Insurance Corporation umbrella. That GIC was not very customer friendly is a known fact.

Capitalising on this, a range of players in the non-life insurance arena are launching better products pitched as more user friendly. Check them out thoroughly and choose one that fits your requirements best.

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