A health insurance policy for the cost-conscious buyer

When it comes to health insurance, PSU insurers may not offer the friendliest products, but they certainly score on claims settlement and affordability. Here, we review an affordable policy from a PSU insurer with a good claim settlement record.

United India is a large public sector general insurance company, ranking fifth by premium collected. It has improved its claims record by a huge margin the last two years and currently its claim settlement ratio by number stands at 97.5%, claim settlement ratio by value at 83.8% and claim settlement efficiency ratio at 98.7%. This is better than the industry averages of 84.6%, 77.7% and 93.5% respectively.

These numbers are based on public disclosures for the nine months upto December 2021. Please read this article to understand the claim settlement metrics.

Policy features

United India Family Medicare is part of Prime Health Insurance, our recommendation list for health policies. It has the following basic features:

Entry and inclusions

The policy is available for 18-to-65-year-old adults. Children from 91 days to 18 years old can also be added to the policy. Once children attain majority, they can apply for a separate policy that allows continuation of policy benefits. The policy allows mid- term inclusion of newly-married spouse and new-born children; you don’t have to wait for the next renewal to add members to the policy.

Coverage

Sum insured options vary from Rs 3 lakh to Rs 25 lakh. The maximum sum insured of Rs 25 lakh is lower than what most of the other policies offer, but we think Rs 25 lakh is large enough to cover most medical procedures at today’s prices. One can use a super top-up plan to enhance the sum insured beyond Rs 10 lakh at a lower cost. Read this article on how much health insurance you need to understand what amount of cover works well for you.

Pre and post hospitalisation

Apart from actual hospitalisation, the policy covers pre-hospitalisation and post-hospitalisation expenses of up to 30 days and 60 days, respectively. Day care treatments – that is, procedures that used to take more than 24 hours hospitalisation in the past, but are now completed in less than a day due to advancements in technology – are covered as well.

Why buy

We like this policy on the following counts.

• Favourable room rent coverage: For sum insured of Rs 5 lakh and above, the policy covers a standard AC room or room rent at 1% of sum insured, whichever is higher. There are no limits on ICU coverage for sum insured of Rs 5 lakh and above. For sum insured of below Rs 5 lakh, room rent coverage is capped at 1% of sum insured and ICU rent is capped at 2% of sum insured. Even though this is restricting, we feel a basic policy should be at least of Rs 5 lakh in any case. For those opting a coverage of Rs 5 lakh and above, room rent and ICU coverage are good.
• Good claim settlement history: United India Insurance has among the best claim settlement ratios in the industry currently, having significantly improved on this over the past couple of years. 
• Restore benefits: Restore benefits enable the insurer to automatically refill your sum insured once exhausted. This can be used for future claims except for the same disease for the same person. While this policy does not provide restore benefits as part of its basic features, restore benefits are available as an affordable add-on.
• Affordable: This policy has a more affordable premium than peers. It also provides a no-claim benefit, where an additional discount of 5% on premium will be applicable for every claim-free year, subject to a maximum of 15%. In addition, an online discount of 10% for both new purchase and renewal is available if purchased directly from the company website. (Note: The renewal discount is applicable only if the first purchase and all subsequent renewals were done directly from the company website)

How premiums compare

United India Family Medicare has zone-based premiums, where selected major cities are classified as zone I and rest of India as zone II. The premium for zone I is slightly higher than that for zone II. For all the comparisons here, we will be looking into zone I premiums. To view the full list of premium, please see the premium chart of zone I and zone II here.

For an individual aged 36 to 40, for a sum insured of Rs 10 lakh, the policy premium cited by the insurer is Rs 10,874. This compares to Rs 16,701 for HDFC Optima Restore, Rs 11,047 for ICICI Lombard Complete Health Insurance Plan Health Shield, and Rs 13,895 for Star Comprehensive Insurance. This suggests that this plan has very affordable premiums. 

For a family of four, with two adults aged between 36 to 40 and two children, for a sum insured of Rs 10 lakh, the premium will be Rs 23,746. This again compares favourably to Rs 33,271 for HDFC Optima Restore, Rs 24,614 for ICICI Lombard Complete Health Insurance Plan Health Shield and Rs 27,754 for Star Comprehensive Insurance.

Optional add-ons

This policy comes with a set of add-ons that you can opt for an additional premium. Not all of these are useful or affordable. Here’s a rundown of the more important ones and whether you should go for them.

Restore benefits

The insurer will restore the sum insured once it is exhausted in a policy year. This restoration will only apply for a different disease from the one for which a claim is made. In case of family floater policy, in the event of the full cover being used for a policyholder, other members can still enjoy the same cover post restoration. We think this is an essential feature and recommend anyone buying this policy to opt for this.

This add-on is available at a very affordable rate. For a family of four with the oldest member aged less than 40, this add-on will cost Rs 30 per year. The maximum premium of Rs 354 for this is applicable if the oldest member is aged above 60. See this document, page 5 for premium details of this add-on.

Maternity and new-born baby cover

This covers maternity related expenses. The major conditions applicable are:

• The 2 years waiting period should be complete after opting for this add on. For example, even if one were renewing United India Family Medicare policy for 5 years, if this particular add-on was opted only from the 6th year, this coverage will be applicable from 8th year onwards and not earlier.
• The cover is not available for more than two children 
• In case of normal delivery, maximum payout for maternity will be 10% of sum insured subject to a maximum of Rs 40,000
• In case of caesarean section, maximum payout for maternity will be 10% of sum insured subject to a maximum Rs 60,000

This add-on is very expensive. Its premium for a sum insured of Rs 5 lakh and Rs 10 lakh are Rs 20,060 and 25,016 respectively. Considering the two-year waiting period stipulated as well as the cap on payments, this is not worth the additional premium. Even without going into the many conditions applicable (policy wordings, page 11), one can safely skip this add-on and build a fund towards maternity. See premium details on this document, page 5.

Daily cash allowance on hospitalisation

The policy will pay a fixed sum for every continuous completed day for which the insured is hospitalised, subject to the following:

• For sum insured upto Rs 5 lakh, allowance is Rs 500/day upto 10 days per policy period
• For sum insured above Rs 5 lakh and upto Rs 15 lakh, allowance is Rs 1000/day upto 10 days per policy period
• For sum insured above Rs 15 lakh, allowance is Rs 2000/day upto 10 days per policy period
• This add-on is not applicable for day care procedures.

For an individual with age upto 50, this add-on will cost Rs 354 and 708 respectively for sum insured of Rs 5 lakh and Rs 10 lakh. For a family floater policy with age of the oldest member upto 50, this addon will cost Rs 472 and 944 respectively for sum insured of Rs 5 lakh and Rs 10 lakh. 

The premiums for this add-on are in the affordable range. Hospitalisations usually carry associated costs which aren’t covered by the claim. This add-on may help bridge the gap. But the limit on the number of days of allowance reduces its usefulness. One may consider this add-on if there are older people included in the policy or there is a history of hospitalisations. See premium details for this add-on in this document, page 5.

Policy minuses

• Long waiting period: This policy has a pre-existing disease waiting period of 4 years. This is on the higher side – median waiting periods for health policies stand at 3 years. There are policies with lower waiting periods like ICICI Lombard Complete Health Insurance Plan Health Shield – 2 years and Star Health Young Star Insurance – 1 year.
• Sub-limits on selected treatments: The policy has sub limits on certain advanced treatments, limiting your ability to file a full claim. These include uterine artery embolization, balloon sinuplasty, and robotic surgeries. See page 10 of the policy wordings for more details. There are policies like ICICI Lombard Complete Health Insurance Plan Health Shield without this limitation.
• Permanent exclusions: A number of conditions and treatments are permanently excluded from this policy. These include treatment related to obesity, treatments necessitated due to participation in hazardous or adventure sports, refractive error correction of eyesight, treatment of sterility, infertility, congenital external diseases etc. Please see the policy wordings, page 14 for full list of exclusions. However, these exclusions are pretty much the norm.

Final take

United India Family Medicare is an affordable policy with essential features. The insurer’s high claims settlement ratios offer confidence that your claims will be largely paid, even if they are subject to irritants like treatment sub-limits. 

The long waiting period is a deterrent for older people to consider this policy, but not for youngsters. The no claim discount, instead of no claim bonus makes this policy more affordable to youngsters who are less likely to make a claim. 

Do make the purchase from the company website to get an additional discount. Make sure to go for at least Rs 5 lakh cover for the best features, with restore benefits as an add-on.