Insurers are tapping into health insurance policies market targeted at High Net-worth Individuals

Pradeep, a HNI aged 65 recently underwent a simple hernia surgery and it cost him around Rs. 3.9 lakh at a reputed hospital in Delhi. Since he was covered by HNI health insurance, 90% of the costs were reimbursed. Normally it would have been a claim settlement of 100% but considering his age and because he had taken the policy only two years ago, 90% claim was settled.

Like Pradeep, many High Net-worth Individuals (HNIs) are understanding the importance of health insurance policies.

It is worth mentioning that health insurance policies are complex for HNIs as they are slightly different and specialised and a very important part of a financial plan.

But it is vital too as hospitalisation expenses have increased and are expected to be on the rise, especially in the specialised areas.

According to results of a cross-national survey on health conducted by National Sample Survey Office (NSSO) in 2014, the cost of treatment has risen at a double digit pace of growth outpacing average inflation.

So, while taking insurance it is important to carefully read the fine print and check if it suits what you are looking for in case you get hospitalised.

Here’s how a HNI can avail it.

Only for HNIs

There have been cases where HNIs have requested for cover against accidental damages caused by pets and even a specific case where an antique chandelier fell and got damaged.

Today HNIs are no longer expected to buy regular insurance from companies as a bouquet of specialised products is now being made available for the market.

Insurers have also begun to have separate categories of products only for meeting the needs of HNI clients, HNIs can avail the best medical treatment from top medical experts and these kinds of policies do not require any pre-policy medical test up to the age of 55 years for people with no medical history.

Many insurance companies also offer international cashless treatment of specified critical illnesses and vaccination for animal bites. Several HNIs prefer their own private deluxe room for which not just room rates vary but also fees of the doctor changes. And all of this is covered under HNI health policy.

Policy Matters

Over the past couple of years, there is a trend where many health and general insurance companies are introducing plans specifically for HNIs. Naturally the premiums are higher and the cover can also go upto Rs 1 crore.

Based on the rules and regulations, and pre-existing disease clauses, the full claim could be settled. Again, in the case of a few insurers because most claims are settled, an annual premium increase can also be seen.

What is important to check whether their policies are portable to become individual health cover with the same features and get this in writing from the health insurance companies. Therefore, ideally it should be a feature of the policy and therefore part of fine print in the policy bond.

Also, it is always recommended that an individual also take health insurance cover in addition to the cover he or she receives from his company.

For instance, Suresh, aged 40, CEO of Zelma Ltd, had a company group insurance cover of Rs 1 crore which was not portable. Despite advised to take a personal health insurance separate from the company, he felt he could wait since he was in good health and was young. Also since he had a high cover from his company, he decided that he would consider taking health insurance after he turns 50.

Suddenly at the age of 42, he was diagnosed with cancer and required urgent surgery. The cost of the surgery and all medication and treatment was of course borne by the company through the group insurance claim. But he is now uninsurable and therefore cannot get any health insurance if not in employment and once he retires.

Sound Advise

As financial advisors, we advise all our HNIs to take additional health insurance, over and above what the company has provided, as this becomes a ‘valuable investment’, almost like a systematic investment plan (SIP) by paying the annual premiums, so that the individual has the benefit of a sound health insurance policy post retirement and through old age.

For this to happen, it is imperative to start early.

And during the tenure of work, all claims should be made from the company policy and the benefits of no claim bonuses will accrue to the personal policy.

Most importantly, with retirement age at 58 years, the possibility that the individual has some pre-existing disease is normally very high and also many a times the person in uninsurable due to ill health or disease. And post retirement, with age, if any claims need to be settled, this will easily be done if a personal health insurance policy is taken during work life and when in good health. So insure right and stay content.

(The author of the article is Mimi Partha Sarathy, MD, Sinhashi Consultants)