General Insurance: Gaurav Garg

Last Updated: Mon, Sep 10, 2012 05:28 hrs

What is the difference between a basic health policy and a comprehensive cover?
A basic health insurance cover would include coverage for hospitalisation and surgical treatments up to a certain limit. It is also possible that it might carry a co-payment clause. Benefits might not include critical illness coverage. Whereas, a comprehensive health policy offers coverage against hospitalisation, surgical treatments and critical illnesses. There is a possibility that all the benefits might not be covered entirely by a single comprehensive coverage. It is, therefore, advisable to choose between various insurance plans or opt for riders to make your health insurance cover complete.

I am planning to buy a second-hand car. How should I go about the car insurance? Is insurance offered on second hand vehicles? Will the premium be higher, since it is a second hand car?
Yes, your second-hand car can be insured. There can be two scenarios in which you can obtain insurance for your car. The first scenario is where the car insurance is sold by the earlier owner along with the car to the new buyer. In that case the insurance has to be transferred in your name by visiting the issuing office of the insurance company.

The second scenario is if you prefer to obtain fresh insurance for your car. The insurance company will conduct an inspection of the vehicle prior to the inception of the risk in case of second-hand vehicles. The premium rate remains the same for second-hand vehicles.

I was going through some insurance policy brochures where I came across a few critical illness riders and products. Could you help me understand the difference between mediclaim and critical illness riders? Which is more useful?
A mediclaim or a reimbursement hospitalisation plan offers coverage against hospitalisation and surgical benefits. The benefits are payable on actual hospitalisation and for surgical expenses. Hospitalisation benefits include room rent, ICU, organ donor expenses and pre- and post-hospitalisation benefits. It might also include coverage against day care procedures and ancillary benefits like accidental dental, non-allopathic and vaccination The coverage amount generally ranges from Rs 50,000 to Rs 10 lakh.

A critical illness policy or rider offers lump sum amount coverage against critical illnesses. This means that on diagnosis of a critical illness, a lump sum benefit amount will be payable to the insured. Actual hospitalisation or surgery is not the criterion for claiming the critical illness benefit. The payment structure is flexible, so that the insured can use the lump sum benefit amount as and when required for his medical treatment. The coverage amount generally ranges from Rs 2-50 lakh.

A critical illness benefit includes coverage against illnesses like cancer, heart attack, stroke, kidney failure, coma, blindness, paralysis, multiple sclerosis, major burns and so on. Treatment of the above critical illnesses can be expensive and even the richest need to borrow or break other investments to meet the cost of quality treatment. As the plans are different in nature, it is ideal to choose a reimbursement-based hospitalisation plan with a critical illness rider or plan as it makes the health coverage complete and comprehensive in nature for the customer.

The writer is MD and CEO of Tata AIG General Insurance

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