Mediclaim Policy Benefits Medicine, Restoration Benefit, and Pre/Post-Hospitalization Costs

Marketopedia / Personal Finance / Mediclaim Policy Benefits Medicine, Restoration Benefit, and Pre/Post-Hospitalization Costs
  1. Alternative Medicine or Ayush Treatments

Medical doctors typically don’t favour the term alternative treatments. They will inform you that only two types of medicine exist – those that work and those that do not. In contrast, insurance firms do not align with this opinion.

Insurance companies are catering to people’s need for allopathic treatments, as well as ‘alternative’ practices such as Ayurveda, Homeopathy, Unani and Siddha. Although it may seem like a great benefit, some key points should be taken into consideration.

To qualify for a reimbursement, you must be admitted to a government-authorised Ayush facility; your condition has to be diagnosed and treated properly. We have seen that insurance firms will commonly reject these claims if they are not supported adequately.

Wellness therapies often get confused with recognized treatments, as the distinction is so hard to ascertain. In addition, some facilities are not prepared for hospitalisation needs, and insurance companies rarely cover these practices. Even though wellness therapies may be valid, it could be challenging to persuade insurance companies to fund them.

Verdict: Slightly Gimmicky

  1. Restoration Benefit

The family floater plan was a great solution to these collective risks. People complained about the lack of protection though, which could be completely understood. 

Think of a family of four living together – if one individual is impacted by Covid-19, all are probably affected. Or, in an accident, the whole family may be involved with multiple hospitalizations required – and not enough coverage. The original use case for this kind of policy was super helpful and made perfect sense.

Insurance companies extended a restoration benefit, promising to fully restore the Cover if you ever had to make a claim. This was attractive to many as it meant that, for example, if you had a sum insured of Rs. 10 lakhs and spent Rs. 5 lakhs tending to your child, the insurance company could offer an extra protection of Rs. 10 lakhs. You could use this additional security if another family member is hospitalised again. The feature became rapidly popular, with companies across the board marketing it. Some insurers even began customising it for added appeal.

In case you have cancer and need surgery, this is definitely going to be expensive. The costs can become overwhelming when you add the chemotherapy sessions too. This takes a toll on both your well-being and your wallet. That is why insurers provide the restoration benefit for individual policyholders in order to give them a bit of extra security.

At a certain juncture, insurance companies recognised the added expenses that came with such generous initiatives. Even though they had to present this offer for competitive reasons, they also needed to manage certain threats. This is when they turned to creative language once more. The aim was to promote the renewal benefit everywhere and make it complicated for people to apply for it with extra specifications.

In the example we mentioned previously, your insurer may decide to reinstate your Cover if you make claims for different conditions. However, it is possible that they could then deny reimbursement for an additional sum if you require further treatment for the same health issue. This is based on what is outlined in their policy document, meaning you would not be eligible for the extra funds.

This renders the restoration benefits for individual policyholders almost useless.

Other insurance firms may use a different approach – they will tell you that your policy can be renewed but only once you have utilised all the benefits provided at the start. For example, if after having a plan with a cover of Rs. 10 lakhs, you claim Rs. 8 lakhs, then your provider will pay the amount but nothing else. 

Thus, in case of another hospitalisation where the bill amounts to Rs. 6 lakhs, then you might need to bear Rs. 4 lakhs of it by yourself as a restore benefit comes into play.

Now that the Cover has been used up, the insurer offers an additional Rs. 10 lakhs should you require hospitalisation again. Nevertheless, due to the minimal chances of this happening, it is clear that the restoration benefit is restricted in scope.

It is essential to carefully read the small print. 

What does the insurance company guarantee?

Are they promising to reinstate the Cover without any strings attached, or are they attempting to deceive you? Read all the details carefully. 

The verdict is in – This isn’t a gimmick, but it’s important to take caution before purchasing.

  1. Pre and Post-Hospitalization Costs

It’s a rare occasion to visit the hospital without any reason. To identify the issue, doctors may order a number of tests – such as a blood test and checkup for minor cases or MRI scans, heart screenings and ultrasounds for more complex matters.

Once you’ve been discharged, you may still face hefty expenses. Meds can be costly, and extra visits to the doctor may be necessary.  If left unchecked, these costs can easily skyrocket into the thousands and wreak havoc on your finances. Fortunately, insurance often covers it – though they might try to make it seem like only certain plans do so.

Most of the policies offer coverage for pre- and post-hospitalization expenses. The difference lies in the level of protection provided. 

Some plans will cover all costs incurred 15 days before admission to the hospital, and 30 days after discharge, whereas more comprehensive plans will reimburse any expenses over longer periods – such as two months preceding hospitalisation and six months following it.

That’s the only difference.

Conclusion: Not a gimmick. However, it’s not even worth the hype.