Declare Existing Ailments while taking Health Insurance

Mr.Ramesh Arvindan asked me "Sir, I want to buy a Health Insurance. I have high Blood Pressure (BP) problem which is however under control with medications and diet. Do I have to declare the same while taking the Policy"?

SRIKANTH SHANKAR MATRUBAI advises :
Mr.Ramesh Arvindan,
It is in your best interest to declare all the health related problems which you are having now and also the ones which you had previously while taking a Health Insurance Policy. This will avoid any future problem when there is a claim.
Suppose you take the Health Insurance without declaring the related health related issues and you get the Health Insurance policy without any Medical tests, especially if you are in lower age group now;  in future, if and when you get hospitilised, it is imperative that you disclose all the past medical issues you have to go  to the Doctor for proper diagnosis and prompt treatment. Now, the Doctor will mention all this in the Discharge Summary. The Health Insurance Company will now get to know that you had avoided the disclosure of material facts while taking the policy and thus will have all the right to reject your claim.
Thus, for a Tension free life, it is in your best interests to disclose all the medical related issues while taking the Health Insurance policy.
Yes, the Health Insurance may reject giving you a policy or increase the Premium, but at least you can be sure that your claim will be settled. Just to save few hundred rupees, it is not wise to avoid disclosing any medical issues.
It will then become a classic case of PENNY WISE POUND FOOLISH or in Indian language, PAISA WISE RUPEE FOOLISH.
Do ensure that your existing disease is filled in the Insurance Proposal Form.
Also, please note all Insurance companies do cover existing ailments after waiting period (though this varies from one insurer to another).
And, yes, some companies do also cover existing diseases depending on case to case.
Most importantly you should also note that it is in your interest to renew your Policy every year to reap the continuity benefits wherein cover for pre-existing diseases are provided.
Note, that if you contact any medical complication after taking the Health Insurance policy, it is not necessary to inform the Company. But for fresh Insurance Policy, it is in your BEST interest to disclose all the facts.
Ultimately, it is in the best interest of the policy holder to follow all the procedures and stick to rules given in the insurance document and not give the Insurance company a chance to reject your claim. Since then, the Regulator, IRDA would step in to protect your rights if the Insurer has rejected your claim wrongly.
Regards,
Srikanth Shankar Matrubai

What to do with Reliance Health Insurance??

One Reader Mr.S wrote  "I am regularly paying annual premium in Reliance Health + Wealth  plan for the last four years. The fund value at present is equal to the premium paid. The lock-in period of 3 years is over. I am getting income tax benefit with this plan. Please advice me which is better-- to pay further premiums or withdraw partially and invest in MFs? My family did not have any hospital benefit claims till date from this policy."

SRIKANTH SHANKAR MATRUBAI REPLIED  :

This policy is a combo of usual mediclaim policy & ULIP. This Policy combines health insurance with investment and pay back an amount at the end of the insurance term. The returns of course are dependent on market performance.

Being a ULIP the charges are pretty high.

The Fund Value would depend on the performance of the investments made by the fund. please remember that the fund charges here in this fund are different and hence, a combination of simple Mediclaim policy and Mutual Funds would be a definite winning combination

Just investing for sake of Income Tax benefit is a wrong idea.

And moreover, you will not get very little profit out of it, you have already completed locking period of three years, so  better you come out of this and seriously consider investing for long term in MUTUAL FUNDS, you will get much better profit out of your investment.

It is always advisable to go for a Pure Health Insurance Cover and a Term Plan.

For returns, mutual funds are the BEST alternative.

WHAT TO DO NOW??

1. Ensure you have a cost effective Term Insurance Plan.

2. Surrender this ULIP, and invest into good MFs for the purpose of long term investments.

The same effect of mediclaim & saving can be achieved by purchasing a cheaper mediclaim policy as well as investing the surplus amount as per our comfort level in Eq. or Debt funds or anywhere else. So this policy should be avoided by Short Term and Medium Term Investors.

Only very long term investors who are salaried people can look at this policy and that too in Moderation. They can also have a serious look at ICICI HEALTH SAVER which is more or less similar.

My choice for Health Insurance would be a toss up between Max Bupa Heartbeat and Apollo Munich Optima Restore.

For Term Plan, the choice would between Kotak Preferred Term Plan and Birla Protector Plus.

For mutual fund investments, Visit http://goodfundsadvisor.blogspot.com